In airline mergers it is often the routes or slots not the hardware that are the most valuable assets being acquired. And having those routes forecloses the possibility of a new entrant coming in. Our competition policy (or lack thereof) has cost consumers a huge amount of money. To the tune of about $16,000 per year per family. About 10 times the last year's tariffs!
30 years ago we had: American, United, Delta, Northwest, Continental, US Airways, TWA, Southwest, and America West.
Now 4 airlines control 80% of the domestic market.
Airlines make a lot more money now than they did 30 years ago. Each year there is a massive transfer from consumers due to the increase in concentration.
Rinse and repeat over multiple industries and the cost is $16,000 a year for the average family.
I'd much rather our regulators err on the side of saying nyet to these mergers and other forms of anti-competitive behavior than err on the side of waving them through, as we have been for over 30 years now.
Capitalism only works to the extent society is able to set and enforce rules against anti-competitive behavior. Every incumbent has very powerful incentives and often the means to insulate itself against competition. Laissez faire leads to a very inefficient outcome.
