An $11 billion proposal from American Airlines parent AMR Corporation and US Airways Group Inc. to merge the airlines - the third and fifth largest U.S. carriers respectively - is likely forthcoming by Friday, February 15, the day that non-disclosure agreements expire between the two firms, the Business Travel Coalition (BTC) says in an analysis of the deal.
The transaction would create the countrys and worlds largest carrier by passenger traffic and would require various approvals from the U.S. Departments of Justice (DOJ) and Transportation (DOT) as well the European Community, BTC says. "If governmental analyses do not force a regulatory tarmac delay, then decisions could be expected in some four to six months."
"From a consumer standpoint - individual traveler or corporate travel department - there are few benefits to offset the negative impacts of this proposed merger that include reduced competition, higher fares and fees and diminished service to small and mid-size communities, " BTC says.
"To be clear, there is benefit in a financially viable air transportation system. However, previous mergers have already enabled seat capacity cuts, higher fares and billions of dollars in fees for ancillary services resulting in a financially strengthening industry. As such, consumer harms from this merger are indeed exacerbated, as there are no substantial countervailing consumer benefits, " BTC argues.
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