US Airways filed (10-Sep-2013) its answer to the US Department of Justice's (DoJ) amended antitrust complaint against the company's proposed merger with AMR Corporation. The carrier stated: "Conservative estimates place the net benefits to consumers at more than USD500 million annually. Simply put, from the perspective of consumers, the new American will be much greater than the sum of its parts. This merger will be procompetitive and lawful. Plaintiffs’ request for this Court to enjoin the merger should be summarily denied." The carrier also identified the DoJ's complaint as having disregarded the importance of LCCs in the US domestic market, and the evolution of the US airline industry through consolidation. US Airways added: "The Complaint makes broad, unsupported claims about past industry coordination and cobbles together out-of-context statements in an effort to suggest by anecdote what the plaintiffs cannot support with analysis. This skewed and incomplete focus ignores the current realities of the airline industry. Detailed evidence will show that this merger is about growth and improved competition—a bigger network, new flight options, more jobs, and millions of additional customers each year who will choose the more competitive new American." [more - original PR]
US Airways files answer to DoJ's amended antitrust complaint
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DOT rejects the notion that such larger market share can possibly be in the interest of consumers. Yet it appears to overlook the benefit American might bring in exchange for incremental market share gains. Nor is it clear if this combination is more anti-competitive than some JVs where two airlines, each with a small- or medium-sized position, combine and become multiples larger. Qantas' 53% market share was earned through quality and smart loyalty programme development while competitors lagged.
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Part 1 of CAPA's analysis of Vueling examined its capacity growth and profitability trends since its acquisition by IAG in 2013. Vueling's operating margin and return on invested capital are on a downward trend, hence the new initiative to reverse these trends.
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