Airports to suffer from AA-US Air merger

Victoria
By Victoria February 20, 2013 10:25

Airports to suffer from AA-US Air merger

Credit rating agency Moody’s Investors Service has warned that the merger of American Airlines and US Airways will harm the credit quality of US airports – specifically the airlines three hub airports of Texas Dallas-Fort Worth International, Miami International, and Charlotte Douglas International Airport – that could lead to route cancellations and increased ticket prices.
“The key risks for those airports are that the combined carrier may reduce service on overlapping routes or reduce service to markets connected by these hubs,” the rating agency said. “Such capacity reductions give airlines a greater ability to raise fares, which in turn can result in lower passenger volumes.”
Airports’ revenues “are highly dependent on passenger volumes.” In the past five years, the number of airlines has been cut in half, Moody’s added, leaving airports exposed “to an increasingly concentrated pool of airline counterparties.”
Smaller airports that were dominated by the two separate carriers, such as California’s Fresno-Yosemite Valley Airport, face greater risk from the fewer airplane landing fees, terminal concessions, and parking fares as the number of passengers passing through could shrink from the consolidation, it said.
“When coupled with difficult economic conditions, airline mergers exacerbate the negative pressure already being exerted on U.S. airports,” Moody’s said.

Victoria
By Victoria February 20, 2013 10:25
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