Business travel groups raise concerns over US airline mergers

Business travel groups raise concerns over US airline mergers

Business travel groups have written to the US government raising concerns over growing airline consolidation following the planned American Airlines merger with US Airways.

The Business Travel Coalition is not calling for the deal to be blocked but wants potential anti-competitive issues to be investigated in the wake of other mergers in the US which will cut the number of network carriers from six to three.

The letter, signed by corporate travel buyers, travel management companies and travel associations from 24 US states and five countries, outlines concerns over growing concentration in the US airline industry.

“There is a unique opportunity and need to conduct a thorough forensic postmortem evaluation of the supportive analyses, projections and promises made regarding the then proposed Delta-Northwest and Continental-United mergers consummated in 2008 and 2010 respectively,” the BTC says.

Chairman Kevin Mitchell said: “A merger-approval decision needs to be informed by understandings gained from such an analysis regarding potential co-ordinated effects among competitors, monopsony power, pricing opacity and the lessening influence of low-cost carriers as marketplace discipliners.

“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.”

The letter has gone to US attorney general Eric Holder and transportation secretary Ray LaHood.


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