Airline Competition:

Issues Raised by Consolidation Proposals

GAO-01-402T: Published: Feb 7, 2001. Publicly Released: Feb 7, 2001.

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In May 2000, United Airlines proposed to acquire US Airways and divest part of those assets to create a new airline to be called DC Air. More recently, American Airlines has proposed buying Trans World Airlines (TWA), along with certain assets from United. These proposals have raised questions about how such consolidation in the airline industry could affect competition in general and consumers in particular. Congress, the Department of Justice, and the Department of Transportation need to answer several questions in evaluating the proposed mergers. The proposals by American, TWA, United, US Airways, and DC Air constitute the most significant recent changes that have occured in the airline industry, and the outcome of these decisions could have both positive and negative effects for consumers for years to come. This testimony summarized a December GAO report (GAO-01-212).

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