The merger of American Airlines and U.S. Airways to form the world's largest air carrier threatens the credit quality of U.S. airports, Moody's Investors Service said on Tuesday, as the combined airline may eliminate routes or push up ticket prices. American Airlines parent AMR Corp, which filed for bankruptcy in November 2011, said last Thursday that it will merge with US Airways Group.The three major hubs for the airlines - Texas Dallas-Fort Worth International, Miami International, and Charlotte Douglas International Airport - could suffer from the merged company combining its operations, according to the Moody's special comment."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."
US Airways Group, Inc. operates and owns passenger and freight airline carrier. Shares of LCC fell by 0.07% or $-0.01/share to $14.49. In the past year, the shares have traded as low as $6.78 and as high as $15.64. On average, 6865640 shares of LCC exchange hands on a given day and today's volume is recorded at 1489045.
Source
