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American Airlines and US Airways plan merger

The Department of Justice is talking with American Airlines and US Airways about possibly lifting its anti-trust action.

American Airlines and US Airways could announce a merger as early as next week, according to the Wall Street Journal and several Dallas-area news outlets.   

If the two combine, it would create the world’s largest airline, joining United, Delta and Southwest as the nation’s remaining major carriers. 

“One reason airlines merge, like companies in any industry, is to control a little more market power,” says Seth Kaplan of Airline Weekly. 

Since American and US Airways only compete directly on a handful of routes, Kaplan says it’s possible airfares overall could remain steady.

But will any of the airlines’ current hub cities go away, as Memphis did in the Northwest/Delta merger?

“We’re talking about cutbacks in the range of maybe 3-5 percent,” says FareCompare.com CEO Rick Seaney.  “I don’t think there [are] any cities that they both wouldn’t like to have in their portfolio.”   

The combined carrier would likely keep the American Airlines brand, sport its sharp new livery, and keep its headquarters in Ft. Worth.  

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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