The DOJ fails the traveling public

Earlier today news broke that the DOJ had reached a settlement with US Airways and American Airlines in regards to their merger, clearing the way for their merger.    The airlines agreed to give up slots at DC Reagan (DCA) and LaGuardia (LGA) airports.  They also agreed to give up "other facilities" at a handful of other airports and agreed not to discontinue service at smaller airports.

But, this does no good to the public.  As we've seen in the past, freeing up slots doesn't benefit the customers.  Last year Delta and US Airways finalized their slot-swap between LaGuardia and DC Reagan.   In the end, Delta became stronger at LaGuardia and US Airways became stronger at Reagan and prices went up.   While a few slots were given to new entrants, that didn't change the pricing landscape at all.  Secondary communites are the ones that are often hit the hardest.    As an example, with last year's swap, Bangor, Maine was one of the airports that was drastically impacted.   Delta became the exclusive carrier on this route as US AIrways exited it.  Become the sole carrier and having a newly found monopoly, Delta raised the rates on this route substantially.    But, somehow the attorneys at the DOJ don't understand the deeper impact of consolidation.

Furthermore, we've all seen the last few airline mergers have not benefitted the customers.  If anything, the airline industry continues to become more and more unfriendly to the consumer as consolidation proceeds.   CEO's don't get any more unfriendly than Doug Parker, we've seen this from the policies he's instituted at the helm of US Airways as well as in the emails subpoenaed by the DOJ for this case.

In the end, it is sad that DOJ did not stand up for the people and caved to a few token concessions that provide the illusion of divestiture, but in reality, it does nothing.

To all the small communities who think they are safe, you're not.  To the hubs that think you're safe, you likely are not either.  Just look at the aftermath of the last two mergers, there is far more damager than progress from a consumer perspective.

Comments

#1
Thom November 12, 2013 at 06:57 pm

Give it another decade... it will all be Delta and Southwest

I'll challenge the assertion that the slot divestitures haven't helped customers. There aren't enough slots (and never will be) that everyone everywhere will benefit but by pushing the slots towards new entrants there is some value being realized by some travelers. Also remember that those airports were slot-controlled back before the consolidation push and plenty of passengers paid higher fares then, too.

I'm not saying that it is all good news for travelers, but I do think that the passenger experience is improving on the whole and that the overall costs to passengers are going up but in line with other costs to some extent.

Where we're really feeling the pinch is in the loyalty programs and that's not something which I think is tied to the mergers.