Eskimo ERJ175s flown by SkyWest.

[Dan Roman]

It's also a whole new industry. In the past there where more airlines. Now there are just a handfull of airlines left and they are all full and profitable. The argument supporting anyone merging because it would enhance the marketplace no longer exists. And no ones survival is dependent on a merger like USAir/AWA.

 

[igneousy2]

Nope...United/US Air never made it to court...Justice department threatened to file suit..the merger was dropped before a case was filed or a judge ever ruling. Speculation was that United already wanted out but needed Justice to file suit to trigger a contingency so they could back out of the deal. And obviously AA/US was allowed so clearly UA/US was not the last word.


From ABC NEWS...
C H I C A G O, July 27 ? United Airlines and US Airways Group called off their $4.3 billion deal today after the Justice Department said it would sue to block the acquisition.

 

[igneousy2]

Although it has not happened recently, I think it is likely that the Justice Department would attempt to block a UA/DL tie-up for example. I don't think it's clear what the reaction would be to a UA/JB or a DL/AS.

It is not enough for the DOJ to show that the combined airline would own a particular percentage of a market, they must further prove that this increase in market share, would give them a substantial amount of pricing power that they would not have had otherwise. XM & Sirrius were allowed to merge because although the combined company would own 100% of the satellite radio market, competition from other forms of radio and entertainment in general would not give the company any substantial increase in pricing power.

This is why there is always so much talk about the overlap in the routes involving the slotted airports (DCA, LGA) where the barriers to entry for competitors are high. The barriers to entry for competition to come into an airport like SEA is fairly minimal. If Delta-Alaskan Airways tried to jack the prices in SEA upon merger, it could be argued that price increases would be kept in check by United having the potential to up-gauge there Seattle flights for example.

Again, I'm not arguing that a merger would happen, I'm just saying that DOJ blocking the next airline merger is not as black & white as some are claiming.

 

[Guppiedriver]

Alaskan Airways?