An American Airlines Merger Could Mean Higher Fares for Travelers
(NEW YORK) — As American Airlines emerges from Chapter 11 bankruptcy, the carrier will be looking at potential mergers with other airlines, according to its chief executive.
In a letter to employees on Tuesday, American Airlines CEO Tom Horton said, “We are approaching the point where we have greater clarity on our revenue outlook and cost structure and can begin to accelerate the plan for the new American. And it is at this juncture that it now makes sense to carefully evaluate a range of strategic options, including potential mergers, which could make the new American even stronger.”
A merger with US Airways has already been thrown in the mix, but now other airlines, like JetBlue, are being reported as potential partners.
What will this mean for travelers?
“The most likely outcome is going to be higher fares. And that’s most concerning for consumers who have seen prices on airfare go up consistently over the last several years,” says ABC News Travel and Lifestyle Editor Genevieve Shaw Brown.
“Whenever a merger takes place that means there’s less competition among airlines, therefore less incentive for airlines to lower their prices,” she explains.
AMR Corp., American Airlines’ parent company, filed for Chapter 11 bankruptcy on Nov. 29, 2011 “in order to achieve a cost and debt structure that is competitive in the airline industry.”
Copyright 2012 ABC News Radio