Principles in Practice: The Blog of the Objective Standard

Tuesday, December 19, 2006

Airlines Should Be Free to Merge

Posted by ARI Media at 9:25 PM

Irvine, CA—In response to a proposed merger between United and Continental, as well as reports that US Airways is considering a merger with Delta, politicians criticized the companies and called on the Justice Department to block any consolidation in the airline industry.

House Representative James Oberstar, for example, says the government should not allow any airline mergers because they would only benefit stockholders and airline executives. Senator Frank Lautenberg, echoing the anti-merger sentiment in Congress, opposes any merger that the government deems not "good for the flying public."

"But politicians have no right to interfere with the mergers of airline companies—or any other companies," said Dr. Yaron Brook, president of the Ayn Rand Institute.

"Mergers are a legitimate business strategy used to cut costs, improve efficiency, gain customers, grow sales, and increase profits. All companies, including airlines, should be free to decide whether to merge or break up; if customers do not like the prices or practices of the merged company, they are free to take their money elsewhere."

Labels: Business and Economics, Individual Rights and Law