Washington, D.C. — American Airlines and US Airways announced today a $11 billion deal to merge that if approved would create the world’s largest airline and leave four national carriers controlling around 70 percent of U.S. travel. Experts from the New America Foundation’s Markets, Enterprise, and Resiliency Initiative (MERI) are available today to give reporters context for the proposed merger and its implications, which could include higher fares and less service in parts of the country.
Last year MERI published a report, Hard Landing, examining how the U.S. air transport system has broken down across much of the country. The report — co-written by Phillip Longman and Lina Khan — details how airlines have slashed service in major cities like St. Louis, Memphis, Cincinnati, and Pittsburgh, disrupting business activity and threatening economic vitality. The research shows the trend will worsen as airlines choose to consolidate capacity and abandon heartland cities for major domestic and international routes. MERI also published an article on the subject, "Terminal Sickness," in the Washington Monthly.
MERI released the following statement in response to today's news:
“The proposed merger between American Airlines and US Airways is bad news. Previous big mergers resulted in higher fares and less service, and unfairly affected some regions of the nation more than others. It is troubling that an essential national service is now governed only by a handful of airline executives, who see themselves as accountable only to shareholders.
This tight consolidation is a result of the ill-conceived Airline Deregulation Act of 1978, which overturned decades of national experience regulating other vital network industries like railroads. We call on the Obama Administration to block this merger today, as a first step. We also call on Congress to fix this failed policy, which chokes off economic growth and treats America's cities and citizens in grossly unequal fashions."
Read the full report, Hard Landing: The Breakdown of America’s Air Transport System and the Role of Deregulation.