Airlines Win Permission to Merge

“(Reuters) - US Airways Group Inc and American Airlines will give low-cost competitors more access to a half dozen key U.S. airports, including New York and Washington, D.C., in exchange for permission to merge and create the world’s largest airline.”

That’s good news for Doug Parker , the man behind the merger, soon to become the CEO of the largest business in his field. And it may be inspiring news for other businessmen: Parker, with airline workers at his side , fought the government legally and politically  and, at least for the most part, won. But I quoted that sentence for a reason: one word in it makes it less than triumphal for the cause of business rights.

When the Department of Justice first announced that it would try to use antitrust law to stop Parker’s merger from going through, DOJ antitrust chief Bill Baer said he really did want to stop the merger—he wasn’t just after a settlement where the airlines would give up some resources and DOJ would withdraw its objections. But what Baer got was a settlement. That's a victory for Parker. And it reminds us that sometimes, when you stand up to the government, you win.

Still, it’s an incomplete victory because of one word in that sentence I quoted: permission. Parker’s nascent airline must surrender certain assets, Reuters says, “in exchange for permission to merge and create the world’s largest airline.” Even if in this case DOJ caved because of legal arguments or political pressure, merging is still seen as something for which one has to get permission—even buy permission. So the settlement does not fully vindicate the individual’s right to do business for his own sake. To do that would require defeating the idea that it is up to the government to give or deny permission for mergers. So long as mergers are regarded as a matter of permission, the principle that the government is entitled to manage the economy will still threaten everyone’s right to work for his own benefit.

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