American Airlines - US Airways Merger Moves Forward, But What Will That Mean?

american airlinesThe merger between American Airlines and US Airways has moved a step closer to reality with the bankruptcy court approval of the deal, but questions about the new combined airlines impact on U.S. air travel remain unresolved.

Even before the merger had won approval by the boards of the two respective companies, the Business Travel Coalition (BTC) had been sounding the alarm on what the deal could mean for the industry.

“To be clear, there is benefit in a financially viable air transportation system,” the BTC said at the time. “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 was referring to the Delta-Northwest and United-Continental mergers of 2008 and 2010, respectively. Combined with the American – US Air merger, these deals would reduce the major network carriers from six to three since 2008. The BTC has called for an antitrust and industry analysis into the deal, arguing that many of the projected benefits from the previous two mergers have not come to pass, casting doubt on many of the projections regarding this deal.

"There is a unique opportunity and need to conduct a thorough forensic postmortem evaluation of the supportive analyses, projections and promises made regarding the then-proposed Delta-Northwest and Continental-United mergers consummated in 2008 and 2010 respectively," the BTC said in a letter that was also signed by corporate travel buyers, travel management companies and travel associations from twenty-four U.S. states and five countries.  

Advocacy groups like the Consumer Travel Alliance (CTA) have added their own criticism, such as this six point rebuttal of the projected benefits of the latest merger.

It could still be a few months before final approval of the merger, and Travel Agent will be following the latest updates as this story develops.