US files lawsuit against airline merger
The Boston Globe - 08/14/2013
“The government has understood in the past that the airline industry may have been too competitive, resulting in a bankruptcy by almost every single major carrier, and so the government permitted some mergers,” said Harlan Platt, a finance professor at Northeastern University who specializes in airlines and corporate governance. “But eventually you get to the straw that breaks the camel’s back, and this merger was probably being viewed in the Justice Department as that straw.”
But some analysts said the lawsuit oversimplifies the state of the industry. It largely ignores Southwest, which carries more domestic passengers than any other US airline and has made it harder for competitors to raise prices. The mergers have also made the surviving airlines more efficient and profitable, allowing carriers to make improvements to their service.
“It’s probably better for the industry overall and potentially for the consumer in the long run to have three or four very strong, very healthy competitors,” said Peter Belobaba, an aviation researcher at MIT.