Removing a player like TWA, which often sells tickets below cost just to get desperately needed cash, will certainly help stabilize the industry. You have an industry that consumers and the government are convinced is out there pillaging the consumer, but that shareholders are convinced will never return any value,'' he says. If shareholders see no reason to cheer, neither do most consumers. Fewer players might better control capacity, and thus the availability of discounted fares. I'm very concerned about what would happen during a labor stoppage on an airline that big,'' says Ed Perkins, consumer advocate for the American Society of Travel Agents.
Consolidation also threatens to keep smaller rivals from competing effectively.
There are still plenty of hurdles to overcome before that threat becomes reality. And the Justice Dept., facing growing political opposition to airline consolidation, must sign off on United's and American's acquisitions. But even if it takes months of analysis to satisfy Congress, many experts expect the deals to pass muster with antitrust watchdogs. That should create a stronger competitor for United, which has a hub at Washington's Dulles International Airport. Previously, DC Air, owned by entrepreneur Robert L. Johnson, was dependent on United for planes and crews, ensuring United's domination of the region's airports.