A day after the Justice Department filed a lawsuit to block the merger of American Airlines and US Airways, regulators and industry officials continued to wrestle with a central question: What is the best way to protect consumers?
To the Justice Department, a merger between American and US Airways would increase the fares and fees that have been steadily rising.
But to the airlines, the merger would lower costs and provide more flexibility for many travelers. What is more, some industry analysts said that a hobbled American, which is still trying to emerge from bankruptcy protection, would struggle to compete against the two giants, United Airlines and Delta Air Lines.
“What we are saying today is simply that they got this one wrong,” Richard Parker, a lawyer for US Airways, told reporters on Wednesday.
The Justice Department’s action comes after a decade of rapid consolidation in the airline industry, including the mergers of Delta and Northwest in 2008 and United and Continental in 2010. But antitrust officials said on Tuesday that despite the cost savings for the carriers from consolidation, domestic airfares, on average, had increased much faster than inflation over the last several years, prompting the department to revise its thinking about what was best for the consumer….