Travel groups express concerns over American Airlines merger
Tuesday, March 19, 2013
Choosing serviced apartments or corporate housing over corporate suites at chain hotels is a great way for executives to save money, but selecting a cost-effective business-class airline may not be so simple. The impending merger of US Airways and American Airlines has some travel advocacy groups worried. Fearing potentially harmful consolidation of the U.S. commercial aviation sector, the Business Travel Coalition (BTC) has written to the U.S. government to voice its concerns regarding the proposed alliance of the two carriers, reports Travel Weekly.
The need for oversight
Members of the BTC do not oppose the merger of the two airlines, but instead called for renewed focus on regulatory oversight to address the potential effects the deal could have on the competitiveness of the aviation market in the U.S. Should the merger be approved, it will reduce the number of major carriers in the U.S. from six to three. Members of the BTC who expressed their worries in the letter include travel management professionals, corporate travel buyers and business travel associations from 24 states and five countries.
In the letter, the BTC urged the U.S. government to learn from the lessons of the past when evaluating the potential effect the merger could have on the current business travel landscape in the U.S.
"A merger-approval decision needs to be informed by understandings gained from such an analysis regarding potential coordinated effects among competitors, monopsony power, pricing opacity and the lessening influence of low-cost carriers as marketplace discipliners," said Kevin Mitchell, chairman of the BTC, as quoted by the news source. "Were it determined that the proposed American-US Airways merger should be approved, structural remedies ought to be considered such as a minimum set of national consumer protections that ensures a private right of action in federal court and enables enforcement at the state level by state attorneys general."
Consumer concerns
Business travel advocates are not the only ones who are concerned about the proposed merger of the two carriers. According to Aviation Pros, officials from the Consumers Union will gather at a Senate hearing today to address how the deal will affect consumer air passengers across the country.
Fewer flights, rising airfares and a lower quality of service are among the chief concerns that the Consumers Union will be voicing at the hearing. In addition, the consolidation of the commercial aviation sector in the U.S. could potentially make it more difficult for low-cost carriers to compete, and may adversely affect the corporate accountability of "too large to fail" airlines.
The chief executive officers of both US Airways and American Airlines are expected to be in attendance at the hearing, as well as officials from the American Antitrust Institute.