Source Newsroom: Indiana University
INDIANAPOLIS -- Customers are sure to be the losers if the proposed merger of US Airways and American Airlines goes through, says Max Huffman, an expert on antitrust and consumer law at the Indiana University Robert H. McKinney School of Law in Indianapolis.
"As is the case in any industry, a reduction in competition will produce a reduction in service and an increase in price," Huffman said. "If you spend 30 seconds with an economist, she will demonstrate that to you graphically: the fewer competitors, the steeper the demand curve facing each individual airline and the greater the opportunity to cut service and raise price without losing customers.
"If you prefer facts to theory," he added, "ask yourself whether, when you are driving down the highway in need of a fill-up, you would prefer to take the exit with one gas station or the exit with several gas stations."
Huffman said the wave of airline mergers in the past decade may not have raised the price of tickets, but overall costs have increased because of the nearly industry-wide adoption of fees for bag checking, ticket changes and even snacks on domestic flights.
Huffman is an associate professor of law and Dean's Fellow at the McKinney School. Before joining the faculty in 2008, he was an attorney in private practice in Washington, D.C., and served with the Antitrust Division of the U.S. Justice Department and as a special assistant U.S. attorney. He was a member of the trial team when the Justice Department sued American Airlines for predatory conduct in 1999.