Airline mergers have already led to higher fares

NEW YORK — Federal officials are trying to put a stop to rising airfares and fees by blocking the latest airline merger — but for fliers, it is already too late.

The past decade has seen the largest transformation of the airline industry in a generation. Prior to 2005, there were nine major US airlines; today, just five.

The merger of American Airlines and US Airways would bring that number down to four. But Tuesday, the Department of Justice moved to block the deal, saying it would cost consumers hundreds of millions of dollars a year in higher fares and fees.


But even before this, the cost of flying had gone up for consumers as the industry consolidated. The average cost of a round-trip domestic ticket — including baggage and reservation change fees — rose to $378.62 last year, up from $351.48 in 2008, when adjusted for inflation.

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The American-US Airways merger would create the world’s biggest airline and help propel American out of bankruptcy protection. For smaller US Airways, the deal represents a chance to be a big player in global aviation and to better compete with the larger airlines that now dominate the market.

The airline industry has been searching for stability ever since the government stopped regulating routes and prices in 1978.

Companies that once had profitable monopolies suddenly faced start-ups that undercut their fares. Since deregulation, 195 airlines — small and large — have filed for bankruptcy.

The latest consolidations started in 2005, when America West bought US Airways out of bankruptcy. Then Delta and Northwest merged in 2008, followed by United and Continental, and Southwest and AirTran. All of those easily won the blessing of antitrust regulators.


Consolidation has made the airlines more stable, provided job security for thousands of employees, and rewarded investors. Business travelers have benefited from more flight options and easier connections. But families looking to go on vacation face higher fares and fewer airlines to choose from.

‘‘It’s too late. It’s already a very consolidated industry,’’ said Savanthi Syth, an airline analyst with Raymond James. ‘‘I don’t know if you want to stop an industry from being profitable.’’

In seeking to stop the American-US Airways deal, the government contends that airlines already follow each other’s moves in setting prices and adding new fees.

They even bully each other out of offering sales.

For instance, on April 18, United Airlines increased its fee for changing a reservation from $150 to $200. Like lemmings, American, Delta Air Lines and US Airways all matched the higher fee within two weeks. Even JetBlue Airways — which has largely resisted fees — increased its change fee by 50 percent.


In the past, passengers might have balked at such fees and boycotted a particular airline. Today, they have no choice but to pay because of fewer options