May 08, 2007
"Airlines are America. America is airlines. Of course, you can say that about other industries, too."
Posted by Gordon Smith

Senator Herb Kohl (D-WI), new chairman of the Judiciary Committee’s Antitrust Subcommittee, obviously is livid about the possible acquisition of Midwest Airlines, based in Milwaukee, and AirTran, based in Orlando. Thom Lambert reprints Senator Kohl's rant it all its glory. There's just one teensy weensy problem: this deal has nothing to do with antitrust. Cue Thom:

Sen. Kohl's comments sound like the sort of thing I hear from my non-lawyer friends when I tell them I teach antitrust law. The remarks demonstrate almost no understanding of antitrust’s role and purpose and instead treat antitrust as a just another tool for protectionism.

Sen. Kohl never says a word about the only real point of competition between Midwest and AirTran — i.e., the routes served by both airlines. That's probably because the airlines compete on so few routes. Comparing the Midwest route map (click on "Midwest Airlines Route Map") with the AirTran route map (run your cursor over the cities to see the routes from each) reveals minimal competition between these two airlines. Almost all Midwest flights originate or terminate in Milwaukee or Kansas City. AirTran, which has dozens of routes from Atlanta and Orlando, appears to offer only six flights from Milwaukee and four from Kansas City. Midwest flies one Atlanta route and two Orlando routes. Because the two airlines serve different areas (and the areas where there’s significant overlap are subject to intense competition from other airlines), a combined AirTran/Midwest would not have the power to reduce output and raise price above competitive levels. That is all antitrust cares about.

Well done.

UPDATE: Speaking of antitrust, Peter Lattman offers some nice background on the potential deal between Alcoa and Alcan.

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