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Airlines mergers paves way for more LCCs, help keep fares low

The recent merger of American Airlines and US Airways has come as a good omen for low cost carriers as well as the aviation industry, a recent study has concluded. Media reports said that the airline industry in the United States has witnessed several mergers in the past decade and as a result paved way for four major airlines and their regional subsidiaries controlling more than 80 percent of all domestic air traffic in the country.

A new study by PWC has concluded that the merger mania which had overtaken several leading carriers in fact had a positive effect on the overall health of the nation’s aviation industry and is partly responsible for keeping the consumers happy with more cheap flights than previously. Citing the latest example of the merger of American Airlines and US Airways, the study said that the merger not only helped in creating the world’s largest carrier but also allowed airlines to permanently drop unprofitable or redundant routes. This also helped the airlines to pump in more investment in more fuel-efficient aircrafts.

The study also pointed out that the elimination of unprofitable or redundant routes by the airlines have also helped the low-cost carriers gain entry into the domestic market in a big way and pose strong competition to the large carriers forcing them to offer cheap airfares constantly. The study said that though the mergers might have some negative impacts on small markets but ultimately succeeded in creating more opportunities for the low-cost carriers.

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