Merger Will Result In Coveted Slots In Major Cities Given To Low-Cost Airlines

NEW YORK (CBSNewYork) — The government has given the go-ahead for the merger between American Airlines and US Airways.

It will create the world’s biggest airline.

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Attorney General Eric Holder proclaimed that Tuesday’s agreement between the airline giants has “the potential to shift the landscape of the airline industry.”

Once the two airlines finalize their merger in mid-December, they’ll be forced to give up 34 coveted slots at LaGuardia Airport, CBS 2’s Jessica Schneider reported. Those slots will go to low-cost airlines known for slashing fares for consumers.

“These other competitors coming in and being forced to react to the marketplace, which results in a lower price point for consumers in order for them to compete,” aviation attorney Brian Alexander said.

Something to effect of “this has the possibility to really bring airfares to low levels.”

The two airlines will also give up space in Washington D.C., Boston, Chicago, Dallas, Los Angeles and Miami.

The concessions come as a result of a government lawsuit against the two airlines, when US Air announced its $1.1 billion acquisition of American in August.

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While the government said it’s a win for consumers, people flying out of LaGuardia on Tuesday told Schneider they’re not so sure.

“It is scary because so many of them are merging that you kind of want to keep the competition going,” passenger Karen Ivey said.

“As long as they’re allowing other companies to come in, let them grow, let them be as big as they want, as long as they allow other companies to come up after them,” Kenton Stubbs added.

Government officials said it has worked in the past.

When Southwest Airlines acquired 34 slots at Newark Liberty International after the United-Continental merger, fares on non-stop routes dropped 10 percent and passenger traffic went up by 36 percent.

“If competition is able to prevail, ultimately it will be better for the consumers,” Alexander said.

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