US trade body calls for DOT merger enquiry
Guest Writers are not employed, compensated or governed by TD, opinions and statements are from the specific writer directly
Business Travel Coalition in the US has called on the Department of Transportation (DOT) to look into airline mergers after US Airways announced it plans to combine with American Airlines.
BTC believes the merger would lead to high prices, a less ‘mid-size community service’ and difficult consumer-facing airline policies, although not allowing the merger would likely see US and AA squeezed out of the market.
“The ability of suppliers to ignore their very best customers’ needs points decidedly to a failed market. As such, a critical determination is how much more consolidation is workable with respect to an objective of restoring and maintaining a functioning competition in the marketplace for commercial air transportation services,” said Kevin Mitchell, chairman of BTC.
US Airways showed its relationship with workers last week when it secured a labour agreement with major unions. While no bid has been made for American, the deal means that US Airways has received approval of a key group as it paves the way for the merger. A spokesperson for American said that the union support for US Airways doesn’t “in any way alter” AMR Corp’s restructuring process. The airline has pledged to cut up to 13,000 jobs as it recovers from its bankruptcy protection filing.
