In August, the Justice Department’s antitrust division filed a lawsuit to block the merger of American Airlines and US Airways, which would create the world’s largest airline and concentrate 80 percent of the domestic air-travel business in the hands of four companies.
This week, the department dropped its opposition after the companies agreed to give up some space at a few airports – hardly sufficient to ensure the vigorous competition in the airline industry needed to keep fares down.
In agreeing to the merger, the department seems to have forgotten the crucial arguments it made in its suit. It said that competition would decline significantly on more than 1,000 routes where the two companies currently compete head-to-head. And it said that the new combined American Airlines would control 69 percent of the limited takeoff and landing slots at Ronald Reagan National Airport near Washington, giving it a near-monopoly there.
Read more at The New York Times.