American Airlines, US Airways Merger Would Probably Lead To Higher Fares And Fees
An American Airlines aircraft at Dallas-Fort Worth International Airport Wednesday, June 29, 2011, in Grapevine, Texas.
See those planes in the sky? They're not the only things climbing higher.
A proposed merger between American Airlines and US Airways probably would result in costlier airfares and airline fees, according to experts.
US Airways has struck deals with labor unions at American Airlines, which filed for bankruptcy in November, in order to effect a merger between the two carriers, according to the Associated Press. US Airways still is working to win the support of American Airlines' board, lenders, and executives.
If US Airways and American Airlines end up merging, just four airlines -- the new American Airlines, United, Delta and Southwest -- would control nearly 90 percent of the domestic airline market, according to a JPMorgan Chase research note cited by the Las Vegas Sun. With so few companies controlling such a huge share of the market, the likeliest outcome would be higher fares and fees, according to analysts.
Airfares are likely to rise because of "simple supply and demand, coupled with rising fuel prices," according to MSNBC. Since low-cost carriers are not likely to replace the flights that would be cut after a merger between American and US Airways, there are likely to fewer flights on offer, and the ones that are left will cost more.