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Will American Airline and US Airways merge going to cause monopoly in major city'airfare - Essay Example

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In order to achieve the set organizational goals and objectives, business enterprises have to strategize and compete fairly with the aim of capturing significant market shares while offering affordable…
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Will American Airline and US Airways merge going to cause monopoly in major city'airfare

Download file to see previous pages... Once the two airlines merge, they will operate as a single entity within the airline industry. Combining these firms’ business is seemingly detrimental to major city airfare. In this respect, there are diverse and dynamic arguments with regard to monopolization of major city airfare. The American Airlines-US Airways merger, however, is less likely to cause airfare monopoly in major cities.
In their domestic and international operations, both American Airline and US Airways operate alongside other major airlines such as Delta and United Airlines. Monopoly over airfare would have to outperform other major airline in terms of air ticket prices. In this respect, the American Airlines-US Airways merger has limited chances of controlling airfare due to high competition in the industry. Although the merger could make American Airlines the biggest airline globally (Rosenbloom, 2014), the airline will still have to face stiff competition from other major airlines both locally and internationally.
Without necessarily accounting for all major airlines, American Airlines will have to face Delta, United, and Southwest airlines as far as the domestic airline industry is concerned. Due to the competition factor, the firm, even after the merger, cannot base its primary operational strategy on airfare control. Airfare in major cities remains influenced by demand and supply factors, aspects that the merger would have to address before realizing monopolized airfares. Airfare-based monopoly will be difficult to realize in a highly competitive industry.
Debates on the American Airlines-US Airways merge contend that air ticket prices could increase following the move (Rosenbloom, 2014). Critical to note, however, is that customers are rational as far price and utility are concerned. With or without the merger, consumer tastes, preferences, and decisions will still be critical to account for. This merger ...Download file to see next pagesRead More
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