Is the AMR-US Air Deal Bad for Consumers?

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Aug. 13 (Bloomberg) -- American Airlines’ merger with US Airways should be blocked, the U.S. said in an antitrust suit that upends American’s plans to exit bankruptcy through a deal that would create the world’s biggest airline. George Ferguson has more on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Full-service airlines left.

I think now the justice department has to figure out exactly how many they need to keep the u.s. market competitive.

The reasoning they gave is it could violate trust laws, this threaten to lead to higher prices for consumers.

Is that fair?

Would it have led to higher prices?

They do not have fat profit margins.

The big network carriers, the ones that are flying business travelers, they get paid for the network and for their frequency in and out of markets.

They have been slimming capacity and that has broadband to this point where they are getting profitable profitable.

The profit margins we saw were starting to get back to what they were realizing in 2007 before the recession.

Even they are getting profit margins, the they got six years ago, airfares can't be too expensive right here.

Part of the american merger is trying to rationalize these networks and creating more profitable airline.

We do not see a high risk for airfare.

If you want cheap airfare, you go to low-cost carriers.

This was meant to be the deal that was going to bring american out of bankruptcy.

What does american do now?

American has a great brand name.

Maybe it has been so lead with some of the service but still, it is a very historical brand name they have a great network.

American can do fine on their own.

The challenge is what u.s. air would do.

Shares are down almost 10%. did they need american more?

They do.

They were a smaller carrier before they engaged in this merger transaction.

Their hubs are not as profitable.

American has miami, new york.

Usair, you're looking at things like charlotte and philadelphia.

They are not as profitable.

You can see airline stocks

This text has been automatically generated. It may not be 100% accurate.


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