Market Overview

Boyd Group's Michael Boyd On American Airlines/US Airways Merger Block

Boyd Group's Michael Boyd On American Airlines/US Airways Merger Block

Michael Boyd, chairman at the Boyd Group , describes himself as a man who dislikes mergers.

In the case of the American Airlines and US Airways (NYSE: LCC) merger, however, he was all for it.

Boyd appeared on CNBC's Squawk Box on Wednesday morning to go over why he thinks the Department of Justice's blockage of the merger is a mistake.

"Both airlines are healthy, but they could be a lot healthier put together. I'm a knee-jerk opponent of mergers. I wish they were never done, but I also like Studebakers and they are not coming back either," said Boyd.

"The reality of this whole thing is not so much competition, because airlines are going to ratchet down their capacity they have. The issue is what we look at when we work with communities: 'How much access do you have to the rest of the world?' and there are four dozen small communities [that] will get American Airlines branded service out of this deal. That gives them access to the rest of the world a whole lot better than they have today…Will fares go up? Hey, bank on it, they're going to go up regardless."

Boyd claims that access is more important than lower prices, because creating more airline access creates jobs.

"Getting a low fare to go ride Dumbo doesn't bring in a job, but getting enough service to get Mr. Jong here from to Taipei, [China] does," said Boyd.

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According to Boyd, many regional airports don't exist anymore, and simply lease airplanes to bigger airlines, making the issue of national and global access a concern when it comes to more rural or secluded areas.

He compared today's average airport and flight experience to entering a minimum security prison.

"That's not going to change with this merger, and we could get into service issues where airlines really need to work on it, but the reality here is places like Hilton Head [Island, SC] will now have better access," said Boyd.


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