Originally Posted by
jsloan
While I'm not particularly in favor of the idea of a AA+UA merger, I don't think it would create that much of a stranglehold on the US market -- you'd still have DL, AS, and WN, and you'd probably see one or two new entrants try to move in. And I don't think that the fact that most foreign airlines have little domestic competition is really a particularly big problem for the US3 -- except for China, no other country has a domestic market that even approaches the US market. SQ doesn't have a position of market leadership because it lacks competition in the domestic Singapore market.
He's not wrong that, by comparison, the U.S. airline industry is materially less concentrated than others on an objective basis (e.g., HHI as a metric), and by no means is that a recent phenomenon.
I'm not a fan of further airline mega-mergers, either, but even with wave after wave of post-deregulation airline consolidation, airfares over the long term have continuously declined in inflation-adjusted terms. Kirby admits this in his letter. To be sure, there are routinely year-over-year spikes, mostly driven by exogenous factors (war, pandemic, fuel costs, etc.) but the long term trend continues to point downward. Perhaps one final round of mergers would be "the one," but it's hard to say.