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Professional Convention Management Association

Spotlights

March 25 2013

Do Airline Antitrust Laws Need a Review?

By David McMillin, Staff Writer

americanairlines_newsAs lawmakers review the merger proposal for US Airways and American Airlines, a group of corporate travel buyers, travel management companies and travel associations are voicing some concerns.

Last week, the Business Travel Coalition submitted a letter to U.S. Attorney General Eric Holder and Transportation Secretary Ray LaHood asking the officials for an in-depth review of antitrust laws in the airline industry.

While the members of the BTC indicate that they are not currently calling to block the merger, it’s clear that members of the coalition are worried about the potential for another concentration of power in the industry. In late February, Kevin Mitchell, Chairman, BTC, outlined his perspective in Congressional testimony.

“From a consumer standpoint - individual traveler or corporate travel department - there are few benefits to offset the negative impacts of this proposed merger that include reduced competition, higher fares and fees and diminished service to small and mid-size communities,” Mitchell said in a February 26 hearing before the U.S. House Committee on the Judiciary, Subcommittee on Regulatory Reform, Commercial and Antitrust Law.

Mitchell and the BTC are asking lawmakers to conduct thorough reviews of the recent Continental-United and Delta-Northwest mergers in order to understand the true impact.

“The proposed American-US Airways transaction presents a unique opportunity for the Department of Justice to analyze evidence on previous airline mergers,” Mitchell added.

SEE ALSO: US Airways and American Merge

As many travelers know all too well, the airline industry has moved to a model that includes additional fees for everything from checked baggage to preferred seating. Mitchell and the BTC have also called attention to this practice and how another merger may mean more obstacles for convenient price comparison.

“As airlines have grown larger and more powerful relative to consumers through consolidation, carriers have increasingly been able to refuse to provide consumers with so-called ancillary services and associated fees information,” Mitchell said.

If approved, the new American would be the largest airline in the United States.

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