Airlines and Antitrust

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Since the presidency of Theodore Roosevelt, antitrust efforts have played a major role in fostering corporate competition and preventing monopolies. Using a base of law set out by the Sherman Act, Clayton Act and Federal Trade Commission Act, government agencies work to protect consumers from collusive behavior in a range of industries.

The merger of AMR Corporation, the parent company of American Airlines, and US Airways group formed what would ultimately become the largest airline in the United States. The partnership was the result of American Airlines' desire to merge with another airline in the wake of their filing for Chapter 11 Bankruptcy. The merger itself was highly controversial, and many parties voiced concerns for its potential to decrease competition among airlines and increase prices for passengers. The most high profile opposition was an antitrust suit filed [PDF] by the United States Department of Justice and attorney generals from Texas, Arizona, Tennessee, Pennsylvania, Florida, Virginia and the District of Columbia. AMR and American initially expressed their intention to fight the suit before the parties reached a settlement on November 12, 2013. The merger was completed upon approval from the Department of Justice. The joining of AMR and American Airlines will likely be the last large-scale merger of American carriers, as nearly 80 percent of the American air travel market is now controlled by four airlines. The antitrust suit filed in opposition of the merger was the largest to date in one of the nation's most heavily regulated industries.

 

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