Joe Nocera for The New York Times: Merge Is What Airlines Do

August 16th, 2013

The New York Times
by Joe Nocera
August 16, 2013

Hey, wait a minute. Wasn’t airline deregulation supposed to bring lower prices and increased competition?

So how is it that 35 years after the law was passed that deregulated the airline industry, we stand today with two megacarriers, United and Delta, while a third proposed megamerger — of American and US Airways — was all but done before the Justice Department sued to block it earlier this week? In the last few years especially, ticket prices have skyrocketed and consumer choice has diminished. As for what it’s like to fly these days, well, the less said the better.

The answer, in part, is that deregulation worked all too well at first, and then it didn’t work well at all. The natural tendency of companies to seek monopoly power took over, and nobody tried to stop it until now, when it is really too late.

Read More