RSS   Newsletter   Contact   Advertise with us

US Airways-AMR merger block may be positive for airports

Staff writer ▼ | August 23, 2013
The move to block the proposed merger between US Airways and American Airlines (AMR) could have a slight positive impact on U.S airports. If this move signals the end of the consolidation trend, airports will generally benefit as more carriers require more services.
US Airways AMR
US Airways AMRThe move to block the proposed merger between US Airways and American Airlines (AMR) could have a slight positive impact on U.S airports. If this move signals the end of the consolidation trend, airports will generally benefit as more carriers require more services.


The U.S. Department of Justice (DOJ) and six state attorneys general blocked the proposed merger this week.

Smaller regional airports may fare the best if the trend toward consolidation is at an end, according to Fitch Ratings. They are more vulnerable to airline service cutbacks after a merger of large carriers. However, such airports with a significant exposure to AMR, such as Northwest Arkansas Regional Airport (42% in 2012), will remain susceptible to reductions in AMR's route network if it embarks on a strategy to emerge from bankruptcy through a down-scaling of its operations.

Larger international gateway airports may also benefit. If US Airways and AMR remain separate carriers, both may separately need to enhance international services to contend with United and Delta. AMR is better placed to pursue this course given its larger presence at more favorable international gateway airports such as JFK, San Francisco and Los Angeles.

DOJ's complaint focuses on Reagan National Airport, claiming that US Airways' increase in the proportion of required takeoff and landing slots from the 55% it currently holds to 69% post-merger would seriously undermine airline competition at the airport.

Fitch Ratings estimates that US Airways underuses slots at the airport compared with other carriers in terms of enplanements per slot, with the airline accounting for 42% of the airport's 2012 emplaned passengers with its 55% holding of slots.


 

MORE INSIDE POST