The Justice Department is
suing to block the merger of American Airlines and US Airways, arguing the deal would “substantially lessen competition” and result in higher airfares for customers.
Part of the complaint focuses on Washington D.C.’s Reagan National Airport, where the combined airline would control 69% of landing and takeoff slots.
According to the DOJ, that’s nearly six times more than its nearest competitor, and the deal “would also effectively foreclose entry or expansion by other airlines” at the airport.
That’s because a carrier looking to start or expand flights to DC would have to buy slots from the airline that owns them, and “the merger would only increase US Airways’ incentives to hoard its slots.”
As it stands, US Airways has no nonstop competition on 55 of the 71 routes it flies from DC. The merger would bring that number up to 59.
To show the benefit consumers get from more airline competition, the DOJ produced these two simple charts, showing how the entry of JetBlue into routes from Reagan National pushed US Airways to lower its fares.
But Because JetBlue got its slots through an agreement with American Airlines (trading for spots at New York’s JFK), however, the new, mega-airline could terminate JetBlue’s presence at the airport. You can imagine how fares would then go right back up.
Here are the DOJ charts, “walk-up” prices refers to last minute fares:
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