UMD Expert: American-US Airways Merger May Be 'A Bridge Too Far'

University of Maryland airline industry expert Michael Ball comments on factors behind the Justice Department and a group of states moving to block the merger of US Airways

and American Airlines

because they say the deal would reduce competition and increase fares. Ball, associate dean for faculty and research and Dean's Chair in Management Science for UMD's Robert H. Smith School of Business, is available at mball@rhsmith.umd.edu to follow up on this commentary: "Given the poor health of the airline industry, the various mergers over the past few years have generally benefited both the airlines and their customers. However, recently it has become clear that the major U.S. carriers have been adjusting their historical strategies of seeking to maximize their customer base to strategies that generally restrict their service offerings in order to maximize profits. "Such strategies, which have led to a gradual increase in fares, are helped by the reduction in the competitive landscape brought about by the mergers. "In fact, the American-US Airways merger may just be a 'bridge too far' that noticeably dampens competition. To be sure, both are not among the healthiest airlines, and a merger would certainly benefit the combined patient. However, the Justice Department is right to be concerned about the negative impact on passengers. The combined airline would have very strong competitive positions at certain airports and a near monopoly at Reagan National. There is perhaps a strategy the DOJ could pursue that requires the combined airline to reduce its position at some airports, but this might just be too complicated to work out in a reasonable time frame." Ball also serves as the Smith's Director of Research and is co-director of NEXTOR, the National Center of Excellence for Aviation Operations Research. About the University of Maryland's Robert H. Smith School of Business The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, MS in business, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.