Microeconomics

Over the last few years, it is evident that the airline industry in the U.S. has been experiencing long standing as well as novel challenges (The American Antitrust Institute, 2012). These includes the increase in the price of fuel, slowing demand for air travel and pressures to expand globally. Consolidation among various airlines across the country is the most common remedy that most of the airline firms are applying.

In April 2012, the U.S. Airways made an announcement to move and take over the American Airlines. American airline is the fourth largest airline in the United States while U.S. Airways is the fifth (Plane Buzz, 2013). This merger, therefore, will make the U.S. Airways- American the largest in the United States with a combined share of more than 21% (The American Antitrust Institute, 2012).

The merger is worth 11 billion U.S. dollars and will turn America into the largest...
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