Largest airline in the world? Not so fast
“This is sort of like the marriage in which the minister says, ‘Speak now or forever hold your peace,'” explains CBS travel editor Peter Greenberg. “Well, the Justice Department just spoke.”
It was back in February that American Airlines, which is coming out of bankruptcy, announced plans to merge with US Airways, and create the largest airline in the world.
But Tuesday, the Justice Department filed suit to stop the merger.
CBS transportation correspondent Sharyl Attkisson says the reason is the possibility of huge fare increases – like a one-stop round-trip flight from New York to Houston.
“The American Airlines fare comes up as $1,467. On its merger partner, U.S. Airways, it costs just $575,” says Attkisson. “If the two airlines become one, the lower fare would disappear.”
Reaction from passengers at Reagan National, where 69 percent of the flights would be run by the same company if the merger goes through, was mixed.
It ranged from “Anything to help the customers save money,” to “I think the government should stay out of most of these types of things.”
So what is likely to happen? Greenberg says, “This is an opportunity now for both American (Airlines) and US (Airways) to go back to the Justice Department and the Department of Transportation and say, ‘Ok, what do we have to do to make this work? What kind of horse-trading goes on routes, slots, gates, even cities?'”
But Seattle-based travel analyst Steve Danishek says the horse-trading probably won’t involve the things that affect passengers – like the charges for baggage, and for six inches of legroom – and it’s not likely to affect airfares, which he says are going up not because of mergers, but also because of all the federal taxes and fees. He says what most passengers probably don’t know is that on international flights especially, taxes and fees can be more than the actual airfare.
Given that this merger is similar to the other three mergers the government has already approved, even with the lawsuit, the merger is probably a done deal.
At least you can still use those overhead air nozzles for free. I think.