Mergers and acquisitions by individual carriers since 1985 have changed the face of the airline industry. 1985 Southwest Airlines Muse Airlines 1986 Delta Airlines Western Airlines 1986 Northwest Airlines Republic Airlines 1987 American Airlines Air Cal 1987 TWA Ozark Air Lines 1989 US Air Piedmont Airlines
ican’s routes. “US Airways has been very aggressive in pricing indirect flights that compete with American,” he says. In fact, The Washington Post reports that the government uncovered emails and other evidence suggesting that those low fares will be ditched once the merger is complete. Service to Reagan National Airport in Washington, D.C., is another point of contention. If the merger goes through, American would control 70 percent of the flights at Reagan, an airport that is used by those
took place,” Clougherty says. “And the Great Recession has heightened concerns over employment.” Early projections say up to 7,000 jobs could vanish in Phoenix and 700 more would be lost in Pittsburgh, for example. But Chicago, where American has more than 9,000 employees, may escape major job losses, a Chicago Tribune analysis concluded. American is now the number 2 carrier flying from O’Hare, with roughly 27 percent of the market. For the most part, airline consolidation has taken place over the
1991 American Airlines Eastern Airlines (Latin American Routes) 1991 American Airlines TWA (Heathrow Routes) 1991 Delta Air Lines Pan Am (Shuttle and Atlantic Routes)
2001 American Airlines TWA 2005 US Airways America West Airlines 2009 Delta Air Lines Northwest 2010 United Airlines Continental Airlines 2011 Southwest AirTran Airways 2013 American Airlines US Airways Proposed Source: A4A - an airline industry association
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in the House and Senate, the Washington bureaucracy, and tourists. “It’s a politically sensitive airport,” says Clougherty. “There’s no doubt that if the government reaches a settlement to allow the merger, Reagan National would be part of it. American would be forced to sell off a lot of its slots at Reagan to preserve competition.” The third sticking point is jobs. Clougherty says the District of Columbia as well as seven states including Texas, Arizona, Michigan, and Pennsylvania have joined forces with the Obama administration to oppose the merger. “The states are concerned about employment, which could shrink. A lot of jobs were lost in Minneapolis when the Delta-Northwest merger
last decade with federal consent, allowing big carriers to grow. “The Department of Justice has allowed a number of mergers in the last five or six years, including the United-Continental merger,” says Clougherty. “I think maybe they would like to have that one back.” Now the government is saying “no” to the American-US Airways deal, which could signal an end to the recent string of airline consolidations, Clougherty says. “This merger, if successful, will surely be the last airline merger for some time.” • Doug McInnis Sources include The Dallas Morning News, CNNMoney, The New York Times, the Pittsburgh Post-Gazette, and the Charlotte Observer.
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Mergers Take Flight
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