Did the Justice Department do enough to protect American Airline consumers?
International Business Times - 12/04/2014
Airline industry advocates often point to a January PwC study that used U.S. Department of Transportation data to show that overall U.S. domestic fares had risen only 2 percent since 2004, concluding that airline mergers actually help keep fares low. But Northeastern University economist John Kwoka says that most careful economic studies of mergers examine pricing on affected routes before and after the merger.
“If you look at all routes, there are tens of thousands of them, and there may be no hugely measurable effects,” he said. “Major mergers are usually responsible for price increases around 8 or 9 percent.” Indeed, the PwC study found that in some markets, prices rose as much as 19 percent, despite the presence of low-cost carriers.