WASHINGTON, March 19, 2013 /PRNewswire-USNewswire/ -- At a Senate hearing on the proposed merger of American Airlines and US Airways to be held today, Consumers Union, the advocacy arm of Consumer Reports, will raise concerns about the deal's potential impact on consumers.
William J. McGee, travel and aviation consultant for Consumers Union, has noted, "With each mega-merger in the airline industry, we've been told competition will be enhanced and consumers will be better served, and each time this has not happened."
Consumers Union is concerned that the proposed merger – which would be the fifth among major network airlines since 2001 -- could mean fewer flights and fewer choices for consumers, plus higher fares and lower quality of service. The nonprofit organization has concerns that more consolidation could make it even harder for low-cost airlines to compete effectively, and push the biggest airlines further into 'too-big-to-fail' territory.
"There is no substitute for competition to keep an airline from raising fares and reducing service. A merger of this magnitude can dramatically change the structure of the market and fundamentally alter profit-making incentives, in ways that take those incentives further away from keeping fares low and improving service. The Justice Department needs to take a hard look at this deal," McGee said.
Today's hearing by the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights will start at 10 am ET. Consumers Union's McGee will be part of a panel of witnesses that includes the CEOs of American and US Airways, as well as a member of the American Antitrust Institute.
Consumers Union is the public policy and advocacy division of Consumer Reports. Consumers Union works for health reform, food and product safety, financial reform, and other consumer issues in Washington, D.C., the states, and in the marketplace. Consumer Reports is the world's largest independent product-testing organization. Using its more than 50 labs, auto test center, and survey research center, the nonprofit rates thousands of products and services annually. Founded in 1936, Consumer Reports has over 8 million subscribers to its magazine, website, and other publications. Visit www.consumersunion.org and www.consumerreports.org.
SOURCE Consumers Union