So much for more competition because of the AA/US merger


I said it during the Senate Aviation Subcommittee hearings on Capitol Hill and now the “new” American Airlines (AA) is proving me correct. The AA/US merger what’s-down-is-up and what’s-up-is-down claim that cutting the number of network airlines from four to three would improve competition is now clearly seen as cynical bald-face misdirection. AA’s new line-up service from LaGuardia makes that clear as a bell.

The newly announced airline schedules eliminate competition for AA flights to major Delta and United airline hubs once served via LaGuardia (LGA) and Washington-Reagan (DCA). Let’s take a roll-call.

Atlanta (Delta hub) from LGA — eliminated
Cleveland (United hub) from LGA — eliminated
Minneapolis (Delta hub) from LGA — eliminated
Detroit (Delta hub) from DCA — eliminated
Minneapolis (Delta hub) from DCA — eliminated

Instead of competing head-to-head with Delta and United, AA is doing the opposite. To hell with competition is the message from the new AA. The three airlines are, just as oligopolists have for decades, dividing up the market. Consumers are getting screwed.

Let’s take a look at the new communities they will be serving from LGA.

Charlottesville, Va.
Little Rock, Ark.
Roanoke, Va.
Dayton, Ohio
Louisville, Ky.
Wilmington, N.C.
Greensboro, N.C.
Norfolk, Va.
Knoxville, Tenn.
Richmond, Va.

It is a line-up that shouts, “Fly where others don’t fly, or can’t fly because of slot restrictions.” Consumers should get ready for sky-high prices, just like those faced by Delta passengers in Cincinnati.

“We are excited about moving forward as the new American Airlines, which will fly more customers to more places than ever before,” Andrew Nocella, senior vice president and chief marketing officer – American Airlines, said in a statement.

“Washington Reagan and LaGuardia will continue to be a key part of the new American’s network. In an effort to minimize any impact that our DOJ-required slot divestitures would have on small- and medium-size communities, we felt it was important to make this announcement now. We know how important this service is to the people and the communities affected, and we hope that our competitors who acquire our slots and gates will maintain service to the impacted cities. While these divestitures were necessary, we remain excited about offering new service between LaGuardia and these key communities.”

AA’s message to the other airlines that will be picking up slots at LGA — “You can fight Delta and United, we’re getting out of the competition business.”

Other than their blather that fewer airlines means more competition, the US Airways executives that took over American Airlines were crystal clear about how they saw the future. Time after time, they noted that fewer airlines would allow them to rationalize the industry and allow airlines to make more money.

Let’s hope that the slot divestitures and gate/facility sales mandated by the settlement start to show more competitive strength. Of course, such competition is years away, while airfare increases and service cutbacks are here today.

  • Keith

    Actually, there will be competition on the Knoxville-LGA route; Delta currently flies this route.

  • dcta

    I’m not arguing with you – but just being a little bit “Devil’s Advocate” – there are now alternatives to some of the very high priced airports Delta and United fly and from which AA/US pulled out of – it’s almost like what Southwest has done – let’s go to some “secondary” airports that provide alternative to the DL and UA …… we’ll offer fares that are a little lower but the cost (in time and money) in travel to the airport will decrease……..