US Airways, American Merger Probably Means Higher Prices

The federal government will let slide a merger between U.S. Airways and American Airlines.

It feared going to trial would cost jobs in cities dependent on airports, Bloomberg Businessweek says. The merger will create the world’s largest carrier, and as with many cases when competition is reduced, higher prices could be the result.

But a few good things may come out of it. To get regulators off their back, for instance, American and US Airways will have to sell access to dozens of landing slots or gates at major airports, including Ronald Reagan National, La Guardia, Chicago O’Hare International, Los Angeles International, Boston Logan International, Dallas Love Field and Miami International.

“Regulators will get to say which airlines gain the access lost by the merged giant, and so far it has been made very clear that legacy rivals like Delta and United aren’t welcome,” Businessweek says. That could mean new routes or more flights from Southwest, JetBlue, and others. When that has happened in the past, it actually reduced fares for those flights.

“When Southwest Airlines acquired 36 slots at Newark Liberty International Airport as a condition of the United-Continental merger, it added six nonstop flights from Newark with connections to 60 other cities,” The New York Times says. “Fares dropped by 10 percent on the nonstop routes and passenger traffic rose by 36 percent.”

The merger could close by mid-December, andthe new American Airlines will operate 6,700 flights per day, the Times says. Will you be flying American? Comment below or on our Facebook page.

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's '205 Ways to Save Money' as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

The fast, free way to stay on top of your money.

If you’re not using online money management, it’s time to start.

Click here to find out more.

Money Talks News has teamed with PowerWallet for a free, confidential way to track your expenses, set budgets and goals, get bill reminders and earn free customized coupons.

Take a minute right now and check out PowerWallet. It's the simple way to get a handle on your money.

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.