HAROLD FURCHTGOTT-ROTH

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Airline Mergers and Competition

By HAROLD FURCHTGOTT-ROTH | April 30, 2008

Although America has dozens of regional and local airlines, only seven have a nationwide presence. Delta and Northwest have announced a merger, and United is actively courting another airline, recently rumored to be US Airways. If these proposed mergers were approved, would it lead to a substantial lessening of competition in commercial aviation? The answer almost certainly is: "No." Even with five nationwide carriers, the opportunities to raise airfares would be illusory. The mergers are not motivated by the idea of raising prices, but of reducing cost structures.