Airline Competition

The Federal government sued to block the American Airlines-US Airways merger on the grounds that it would restrict competition and drive up fares on hundreds of routes around the country.

US Attorney General Eric Holder's office, the two airlines, and debtors in the AMR bankruptcy proceeding are discussing "concessions" the government perceives as needed to preserve at least meager competition in cities where either airline, or both together, offer significant service.

SMAAC hopes Mr. Holder has this straight.  From a competitive viewpoint, what is significant service at the busiest airports, Atlanta, Denver, Detroit, Houston, or MSP where Delta, Southwest/AirTran or United dominate?

Delta Airlines (and its partners and contract operators) fly nearly 4 times at MSP for each flight by all of its "competitors" put together.  American, US Airways, and United operate over half of the non-Delta flights.  It is dificult to visualize how a route concession by the newly merged American/US Airways airline would increase or even stabilize competition here.  Is Alaska, Frontier, Sun Country able to take-over routes or slots?  Is more more Delta service going to add competition?  Not by a long shot!

It is fairly obvious that the major airlines cooperate to some extent already on my-hub-to-your-hub routes.  Check fares and flights to Dallas-Fort Worth.  Spirit and Frontier each go once daily to DFW, Southwest and United twice, and AA and Delta six or seven.  Spirit has by far the lowest fare and fees and the fewest passengers.  All the other flights are priced within 5% of the average fare by cabin (class).


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