Southwest Destiny?

SOUTHWEST DESTINY?

Amid talk of mergers by the majors and government focus on competition, the low-fare carrier grows unchecked

By Darryl Jenkins, Director, The Aviation Institute, George Washington University

October 2000

A study released by George Washington University Aviation Institute director Darryl Jenkins looks at potential airline mergers and concludes that one player, Southwest, is being overlooked in the process. Here’s an edited transcript of the report.

In May of 2000, United Airlines and US Airways announced plans to merge, triggering extensive public and regulatory comment about the future of the industry — much of it revolving around fears of less competition, higher prices, and reduced service. The most commonly voiced concern is that the merger and subsequent consolidation will result in three airlines dominating.
This paper examines the airline industry from an economic perspective: the current competitive state of affairs, the likely consequences of industry consolidation, and the potential future of U.S. commercial aviation, whether or not the merger takes place.