Said Kirby: "To say Southwest is 'not competitive' calls into question the validity of the entire report."
-- The report said four airlines would dominate the market. Post-merger American would have a 20% share, followed by Southwest with 18%, United with 17% and Delta with 16%.
-- It said the airline industry would be even more concentrated in a few key hubs, noting: "Hubs were designed to be open access facilities at which multiple, competing airlines provided service," but the system is becoming one with "a few mammoth, closed systems that are virtually impermeable to competition."
-- The report said a merger could harm "behind-the-hub" communities, which in mergers have can see reduced frequencies, smaller equipment or less service, noting that: "Scores of airports are expected to lose scheduled service in the immediate years ahead as well as attendant local and regional economic benefits that flow from connectivity to the world's important business (because) merged carriers have adjusted capacities on overlap routes where they are dominant."Kirby said a merger would be "an unequivocal positive for small cities." US Airways currently serves 31 cities, including Fayetteville, N.C., and Roanoke, Va., which are not served by American. Some would get service they don't have currently to American hubs such as Chicago and Dallas. Additionally, US Airways has no service to 56 Midwest cities, and some would get new service to US Airways hubs. >To follow the writer on Twitter, go to http://twitter.com/tedreednc. >To contact the writer of this article, click here: Ted Reed
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts