Congress on American Airlines Merger: Regulation Could Hurt Small Cities

If its merger with US Airways is approved, American Airlines could be forced to give up some of its slots at Washington, D.C.’s Reagan National Airport in order to avoid having a monopoly on the market. Unfortunately, that would likely hurt small and medium-sized cities, according to Congress, more than 100 members of which have reportedly signed a letter asking the U.S. Departments of Transportation and Justice to allow American and US Airways to keep all their slots at Reagan, Reuters reported yesterday.

Led by Reps. Mike Michaud (D-Maine) and John Duncan (R-Tenn.), the bipartisan group of legislators argues that if they were allowed to take ownership of more slots at Reagan, American’s competitors would likely replace routes to smaller cities — for instance, Tallahassee, Fla.; Augusta, Ga.; Charleston, W.V.; and Portland, Maine — with service to bigger, more profitable hubs.

“Other airlines lack the necessary connectivity out of Reagan National and would be more likely to transfer any divested slots to larger cities and more lucrative routes,” reads lawmakers’ letter.

AMR Corp., the parent company of American Airlines, announced its merger with US Airways Group in February. If approved by the Justice Department’s Antitrust Division, the deal — worth approximately $11 billion — will create the world’s largest airline.

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