After other airline mergers, why does the federal government want to block the marriage of US Airways and American Airlines? The University of Maryland’s Michael Ball says this merger could be just too much of a competition suppressor and rate hiker.
Ball, associate dean for faculty and research and dean’s chair in Management Science for Maryland’s Robert H. Smith School of Business, put it this way:
“The American-US Airways merger may just be a ‘bridge too far’ that noticeably dampens competition. To be sure, both are not among the healthiest airlines, and a merger would certainly benefit the combined patient.
“However, the Justice Department is right to be concerned about the negative impact on passengers. The combined airline would have very strong competitive positions at certain airports and a near monopoly at Reagan National. There is perhaps a strategy the DOJ could pursue that requires the combined airline to reduce its position at some airports, but this might just be too complicated to work out in a reasonable time frame.”http://www.youtube.com/watch?v=INbCaF9rvlQ