Comment on “American Airlines and US Airways Sense Prevails” (by Li Bozhen(Cap) )

It’s a really interesting topic and article. American Airlines and US Airways planned to create the biggest airline company in the world. Cap thinks that it’s not a good idea, but I think the merger is a good move for the two companies.

In Cap’s blog, he argues that the merger will make the merged company too big to operate. I agree that the potential biggest airline company will be much harder to operate than a small airline company, but with an experienced management team it’s possible to make the merged company efficient. More importantly, two companies that are merged bring together personnel, funds and equipment, which will be easy for the potential biggest airline company to expand its markets and create new routes.

Cap also argues that the only way that the merged company can create barrier to entry is the lower price. I disagree with this idea. The merged company will be the biggest airline company in the world. With all the funds, personnel and planes, the merged company will be able to provide better services and more routes. The merged company has potential monopoly power in the market. Thus, I think that the barrier to entry the merged company creates is its company size and its equipment. The merged company can provide customers with good-quality services and unique airline routes that small new airline companies can’t provide.

In conclusion, it’s a good idea for American Airlines and US Airways to be one merged company. With more funds and equipment, the merged company will be able to eliminate its competitors and provide good-quality services.