EDITORIAL: Settling for peanuts

Source: The Philadelphia InquirerNov.迷你倉 15--Now that the federal government has abruptly abandoned its short-lived crusade against airline consolidation, the competition among U.S. carriers appears as sure to keep shrinking as the distance between your knees and the next seat -- with equally scant prospects for passenger comfort.Five months ago, when the Justice Department filed suit to block the proposed merger of US Airways and American Airlines, the government's lawyers seemed eager to make the case that it would significantly harm competition. Unfortunately, they didn't.This week, just before the scheduled start of a trial, the government settled for what looks like a small bag of peanuts. Under their proposed agreement with the Justice Department and six state attorneys general, including Pennsylvania's, the airlines agreed to sell off some of their share of the limited takeoff and landing slots at two airports, New York's LaGuardia and Washington's Reagan National -- protecting some competition and routes for members of Congress at least. As the world's new largest airline, the carriers have also agreed to relinquish two gates in each of five cities; maintain service levels at their hubs, including Philadelphia, for three years; and continue daily flights to certain cities, including several in Pennsylvania, for five years.US Airways CEOmini storageDoug Parker, who will head the new American Airlines, said it plans to maintain hubs in Philadelphia -- where it will control more than three-quarters of the market -- and other cities "forever," not just for three years. Under this lackluster settlement, such executive assurances will have to do.Granted, Justice had a tough case given that the government allowed the earlier megamergers of United-Continental and Delta-Northwest. But it did have a case that this merger would further reduce incentives to improve airline service and refrain from raising fares on many routes.The oligopoly of United, Delta, and the new American will face competition on some routes from domestic discounter Southwest and a few smaller carriers. The Justice Department argues that the settlement will help such low-cost airlines establish a greater presence in more markets. But most experts expect the 25 percent reduction in legacy competitors to have a more significant -- and negative -- impact on prices and service.The government's adventure in passenger protection was welcome given the prospects for diminishing competition, deteriorating service, and rising fares in the airline industry. Sadly, it never got off the ground.Copyright: ___ (c)2013 The Philadelphia Inquirer Visit The Philadelphia Inquirer at .philly.com Distributed by MCT Information Services儲存