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United's New Plan Could Cost D.C.
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In threatening to sue to prevent a United-US Airways deal in 2001, then-Attorney General John D. Ashcroft said the deal would have harmed consumers, who "would have little choice but to pay higher fares and accept lower quality."
Outside experts and industry executives said the airlines should be able to overcome those objections by arguing that the economic environment has deteriorated so much that airlines have no choice but to combine operations. In recent weeks, at least four airlines have sought bankruptcy protection.
"Times have changed. They are going in with one strike against them, not three," said C. Evan Stewart, an antitrust lawyer in New York.
As they proposed in 2001, United and US Airways would essentially have to give up a large chunk of flights at National, or even Dulles, if they seek a deal this year. Low-cost carriers would eagerly bid for slots and gates at National now held by the two airlines and would not raise objections on anticompetitive grounds, said Darryl Jenkins, a consultant who is working with Delta on its proposed deal.
The business case for a US Airways-United combination hasn't excited analysts as much as the erstwhile Continental-United combination, a carrier that would have leapfrogged Delta-Northwest in size. US Airways doesn't have the international route network of Continental, for example.
But US Airways and United will probably have an easier time reducing costs by eliminating hubs and cutting flights on overlapping routes, analysts said. Their fleets are also similar, and both carriers are members of the same international frequent-flier alliance, making it easier to integrate.
However, those cost savings may be short-lived, according to Kenneth Button, a professor of public policy at George Mason University. He said that labor problems -- both carriers have them -- and economic issues, ranging from low-cost competition to high oil prices, will probably gnaw away at any benefits.
"This is a short-term treatment of a problem without actually curing it," he said.
