Let Fly Real Competition

by Don Boudreaux on February 9, 2008

in Antitrust, Regulation

My friend (and co-blogger at Market Correction) Andy Morriss sent this superb letter yesterday to the Financial Times:

Sirs, 

Something very large is missing from your story on the
possible Delta-Northwest and United-Continental airline mergers (“Delta
and Northwest near deal,” Feb. 7): any mention of non-US carriers.  Because
the United States does not allow foreign carriers to own U.S. airlines, well-run
airlines like Air France-KLM, British Airways, Singapore Airlines, Virgin, or Emirates,
the most logical merger partners for the money-losing U.S. legacy carriers, are
prohibited from joining the game.  What the U.S. aviation industry
desperately needs is a dose of competition from competently run airlines, not
another round of “consolidation” of poorly managed ones. Merging
four failures into two solves nothing; what’s needed is competent
management that can figure out how to make money in one of the world’s
biggest markets for air travel.

Andrew P. Morriss
H. Ross & Helen Workman Professor of Law and Business
University of Illinois

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