Stop the Presses:  Washington Discovers Mergers Reduce Competition, Increase Prices

Stop the Presses: Washington Discovers Mergers Reduce Competition, Increase Prices

In 1985 the United States was home to 24 airlines.  Today there are 7.  The Justice Departments under Presidents Reagan, Bush, Clinton, Bush II and Obama welcomed all mergers. Then in August 2013 the antitrust division of the Justice Department suddenly discovered why there is an antitrust division.

According to the New York Times, “But antitrust officials said on Tuesday that despite the cost savings for the carriers from consolidation, domestic airfares, on average, had increased much faster than inflation over the last several years, prompting the department to revise its thinking about what was best for the consumer…And the fares varied greatly, often depending on the level of competition.”

“Justice Dept. Alters View of Mergers By Airlines.” New York Times. August 15, 2013

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David Morris
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David Morris

David Morris is co-founder of the Institute for Local Self-Reliance and currently ILSR's distinguished fellow. His five non-fiction books range from an analysis of Chilean development to the future of electric power to the transformation of cities and neighborhoods.  For 14 years he was a regular columnist for the Saint Paul Pioneer Press. His essays on public policy have appeared in the New York TimesWall Street Journal, Washington PostSalonAlternetCommon Dreams, and the Huffington Post.