Re: Re-regulate Again (John Kurtzke)

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I'm not John, but....

The classic argument would be the mergers reduced competition drastically
in too many markets. I can see this argument in the cases of Republic &
Northwest (upper Midwest) and Piedmont & US Air (eastern Rustbelt). I don't
know how much Delta and Western overlapped before their merger, though.

Clay asked whether the US government let major airlines such as AA, UA, and
US fail. I think it might -- but local and state governments might try to
keep those airlines flying.

For example, Pennsylvania, Pittsburgh, and Philadelphia all have a lot to
lose if US goes under. Not that the Commonwealth of Pennsylvania is flush
with cash, but can the state afford to let US go under? Similarly, Chicago
and the state of Illinois would get incredibly nervous if both AA and UA
were close to shutting down; suddenly ORD is close to a ghost town. DFW
without AA? SFO without UA? DEN without UA? There would huge economic
impacts to the O&D traffic to each of the mega-hubs, and consequently to
the local economies. jetBlue, Southwest, Frontier and AirTran couldn't
expand quickly enough to fill the voids, no matter how much they might want
to.

Nick

At 11:03 AM 3/21/2003 -0500, Allan9 wrote:
>John,
>Why would you say the mergers should not have been approved?
>Al
>
>>From: John Kurtzke [mailto:kurtzke@xxxxxx]
>>Sent: Thursday, March 20, 2003 2:25 PM
>>Subject: Re: Re-regulate Again
>>
>>Department of Justice allowed some mergers to go forward which should
>>have been stopped. (Republic-Northwest, Delta-Western, US Air-Piedmont,
>>to name a few.)
>>
>>john kurtzke
>>
>>kurtzke@xxxxxx

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