An expected merger agreement this week between AMR Corp.'s American Airlines and US Airways Group Inc. could end the latest chapter on airline consolidation that has helped to stabilize an industry troubled for decades, the Wall Street Journal reported today. The $10 billion-plus deal would follow three other industry megamergers since 2008, a period of consolidation that has produced a healthier industry with the prospects of sustainable profitability and investment-grade credit ratings. Travelers would have fewer airline choices—an AMR-US Airways merger would leave four airlines controlling about 83 percent of domestic seats—but also potentially reap the benefits from greater reliability and higher investment in the airlines. Competition remains intense as discount carriers account for roughly 37 percent of domestic passenger air trips, keeping a lid on price increases. On an inflation-adjusted basis, domestic fares are about 15 percent lower than they were in 2000, according to government data.
