US Airways & American: Necessary lawsuit
We've been editorializing for the past year against the merger of US Airways and American Airlines. It's good to see the Justice Department finally catch up to reality.
Justice, and attorneys general of six states, including Pennsylvania, filed an antitrust lawsuit against the $11 billion deal on Tuesday. The merger, which would create the world's largest airline, would decrease competition and raise fares, the lawsuit alleges.
It also would kill jobs secured through taxpayer subsidies invariably billed as “investments in (insert the name of your city here).”
Sure to be on the chopping block is US Airways' flight operations center in Pittsburgh, built with millions of dollars in public assistance. Some fear a heavy maintenance facility at Pittsburgh International Airport, which US Airways abandoned as a hub years ago, also could be shuttered.
But the real nub of the rub was stated quite succinctly last winter by Forbes.com columnist Peter Cohan, who said “the pro-merger chest-pounding can't hide the fact that combining two losing companies does not make a winner.” Or as Stanford University business scholar Jeffrey Pfeffer put it, such mergers “just increase market concentration, raise prices and make customers worse off.” All combining one troubled airline with another gets you “is a larger catastrophe,” he said then.
The flying public — and taxpayers who've underwritten so much of the airline industry's follies and been shafted — deserve better.
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