Thursday, August 15, 2013


Rhetorical query:  first time the US has sued itself?

More interesting query:  first time the antitrust division has seen connecting routes as competitive with non-stop service for purposes of finding an overlap in a merger matter?

My 2c:  the overlaps are not what is driving this complaint.  In fact, with regard to market definition, the complaint is schizophrenic:  on the one hand, US Airways' connecting flights are seen as competitive with other carriers' non-stop flights (logical in its own right, as there is a discount level at which I will start flying one-stop on my regular DC-Indy route); but on the other hand, Southwest and JetBlue are said to serve a different customer base than the "legacy carrier" (also logical in its own right).  Taken together, the arguments are difficult to reconcile.

Rather, what is driving this complaint is the second claim:  that National Airport will become even more of a fortress hub than it is.  With 70% of slots at a slot-constrained airport, the new American will have a stranglehold on travel to the nation's capitol.  Note that Virginia's attorney general Ken Cuccinelli, more nutso right-winger than bleeding heart, added his name to this complaint.

I can also envision that slots at National would be a huge sticking point in the negotiations leading up to this complaint.  No doubt US Airways is salivating over American's slots and the Justice Department want an agreement to divest those slots to JetBlue.

I will say I am looking forward to using this tidbit in the spring semester antitrust class:  an invitation to collude that was not accepted.  (See p. 17, para. 45.)  Echoes of "you raise your goddamn fares twenty percent and I'll raise mine the next morning!"

As is too frequently the case, my own contributions to the popular press conversation on this topic lack the depth I'd like them to have.  Glad at least to see that I appear to see this similarly to Diana Moss, who wrote the excellent AAI White Paper a year ago.

1 comment:

  1. By the way, I was looking for a running connection. It appears that Mark Levy, the Texas AAG who signed the complaint for that state, may have competed in an Austin, Texas triathlon in 2011. At least the Mark Levy who did so is about the right age . . .