Why did the Obama administration change its mind on the American Airlines-US Airways merger?

FLYERS in the United States are often frustrated by the dearth of options on certain routes, and the high price of tickets that are the result of limited competition. After several high-profile mergers in recent years, more than 80% of the domestic air market is controlled by four companies. That has led some travellers to ask how the government could possibly have allowed this to happen.

The answer is the same one that explains so many beguiling aspects of American governance: the combination of money, lobbying, influence, and the political revolving door that often makes it so easy for powerful companies to get their way.

A new investigation by ProPublica delves deeply into the complex web of meetings, donations, and hirings that surrounded the tie-up between American Airlines and US Airways. Three years ago, the administration of Barack Obama filed a lawsuit against the merger, alleging that it would raise prices and fees, cut service, and worsen amenities. Three months later, it reversed course, settling with the airlines and allowing the merger to move…Continue reading

This post was originally published in the Economist.

Advertisements
Why did the Obama administration change its mind on the American Airlines-US Airways merger?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s