Onetime CEO Stephen Wolf and then Parker sought to overcome US Airways' historic disadvantages by pursuing mergers with airlines that have better hubs. Wolf's plan for a merger with United (UAL) fell through. The Justice Department opposed that one too, although the merger's failure resulted primarily from United's loss of interest in the high price Wolf had initially secured.
Apparently, DOJ wants US Airways to continue in the never-never land that Wolf often described as being neither a global airline with a vast international route system nor a low-cost airline.
In the case of American, European regulators for years denied it the ability to pal up with its European partner British Airways. Those regulators let Delta (DAL) and United form trans-Atlantic joint ventures with European partners, immunized against anti-trust violations. They would not let AMR do the same thing. AMR was not approved until 2010, long after Delta and United.
Joint ventures can add hundreds of millions of dollars in annual revenue, but it takes years to make them work, because partner airlines start out less as partners and more as turf-protectors.It is, of course, too early to say whether the DOJ will win this battle. When the airlines take this case into court, as they have said they will do, the department will have to defend itself against the reality that it enabled two other very similar airline mergers, which have made the airline industry healthier, and now won't allow this one. One thing pleased me. I saw that five states joined with the Justice Department in the ruling, but North Carolina did not. Perhaps Governor Pat McCrory, the former mayor of Charlotte, saw the reality that Charlotte Douglas International Airport as well as US Airways employees and Charlotte passengers would benefit from the merger. North Carolina has become a very silly state over the past several months, with state legislators who have consistently embarrassed many of its residents. Finally our state did something right. It stayed away from this ridiculous lawsuit. Follow @tedreednc -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed
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