The Daily Parker

Politics, Weather, Photography, and the Dog

Saw that one coming

As expected, the Justice Department and several states' attorneys general have challenged the American-USAirways merger:

The Justice Department says the deal would result in the creation of the world’s largest airline and that a combination of the two companies would reduce competition for commercial air travel in local markets and would result in passengers paying higher airfares and receiving less service.

On Tuesday, Attorney General Eric Holder said the transaction between US Airways and American would result in “higher airfares, higher fees and fewer choices.”

The attorneys general were from Arizona, Florida, the District of Columbia, Pennsylvania, Tennessee, Texas and Virginia.

The challenge won't succeed, but the AGs had to make it anyway. (Note that Arizona is headquarters of USAirways and Texas is headquarters of American.) The problem is, if American doesn't merge with USAirways, then it's toast—and USAirways will get a hunk of its assets anyway.

I may not have conducted the same analysis as the AG, but I concluded long ago that for me personally the merger works out pretty well. I admit, that may not be true for people who live in smaller aviation markets.

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