Service cuts may follow merger of airlines
The airline industry took a decisive step toward greater concentration on Thursday with the announcement that American Airlines and US Airways had agreed to merge, forming the nation’s biggest airline. The merged airline, to be called American, leaves just three major carriers — Delta Air Lines and United Airlines too — able to offer extensive domestic and international service, a sharp contraction over the last decade. […] A decade ago, the Justice Department “would not have stomached mergers the size of Delta-Northwest, United-Continental, or American-US Airways,” said Paul Stephen Dempsey, a professor of global governance in air and space law at McGill University. “Now, having approved the gargantuan Delta and United acquisitions, it cannot equitably deny American the same.” “Apparently, Washington believes that this is the optimum path to industry health, and that concentration and collusion is preferable to regulated competition,” he said.