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American, US Airways merger would cut competition, GAO says

June 20, 2013|By Hugo Martin
  • A merger between US Airways and American Airlines would cut competition on 12 non-stop routes and on 1,665 other routes with at least one stop, the U.S. Government Accountability Office said.
A merger between US Airways and American Airlines would cut competition… (Jim Watson / AFP/Getty Images )

The proposed merger of American Airlines and US Airways would cut competition on more routes than previously thought, impacting more than 53 million fliers, according to a new federal study.

Proponents of the merger have said in the past that the two airlines overlap on only 12 non-stop routes.

But in the first detailed study of the merger's impacts, the U.S. Government Accountability Office said competition would be cut on 1,665 other routes with at least one stop.

By comparison, the GAO study said the merger of United with Continental in 2010 eliminated a key competitor in 1,135 routes.

The newly merged airline would create the nation's largest air carrier, with a fleet of 1,215 planes, more than 101,000 employees and annual operating revenue of nearly $40 billion.

At Los Angeles International Airport, the new airline would control 23% of the market, the report said.

The impact of the merger on fares might be dampened, however, by the presence of a low-cost airline operating in nearly 500 of the 1,665 routes that are losing a competitor, the study said.

The study does not recommend or oppose the merger but was offered to lawmakers who met Wednesday to study the effects of mergers on the airline industry.

Before the merger can be completed, it must win approval of the U.S. Department of Justice and shareholders of the two airlines.

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