As you’ve no doubt seen by now, the Department of Justice (DOJ) announced it plans to oppose the merger between American and US Airways. Once viewed as a certainly, the merger has been relegated back to “maybe” status. Reactions from key players in the airline industry have tended to follow four basic threads:
Surprise: No matter what side they’re on, just about everyone was taken by surprise. A typical reaction: “If they allowed Delta-Northwest and Continental-United, how can they possibly disapprove of this one?”
Approval: Consumer advocates were virtually unanimous in opposing the merger, which they claim would lead to higher fares and fees. They’re delighted to see DOJ step into the deal.
Disapproval: Industry financial analysts generally favor increased consolidation, not least because it allows the airlines to increase fares and fees.
Skepticism: Legal folks think that DOJ’s suit will probably not prevail. The Department has been significantly unsuccessful in prior antitrust actions against big airlines, so why should it start winning now?
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