AAI Issues White Paper: “Delivering the Benefits? Efficiencies and Airline Mergers”

The AAI’s most recent White Paper, “Delivering the Benefits? Efficiencies and Airline Mergers” was released today. The recent settlement in US Airways-American eliminated the opportunity for the merging carriers’ efficiencies “claims” to be explored in a hearing. But the paper makes the case that efficiencies claims should be viewed skeptically. Evidence from past airline mergers indicates higher than expected integration costs, evidence of post-merger “disconnectivity,” and possible merger-induced inefficiencies. These factors potentially contribute to reducing estimated benefits, and even creating costs for consumers in the wake of airline mergers.