Research On The Antitrust Issues Of Horizontal Mergers In Airline Industry

In recent years,mergers and acquisions took place in China's airlines industry such as the China Eastern Airlines' merger with Shanghai Airlines in 2009,which became the new China Eastern Airlines,in 2010 Air China's acquisition of Shenzhen Airlines,etc.These business conducts may harm competition therefore antitrust law is needed to analyze their impact on competition.Despite China's antitrust law has came into effect for so many years,there are no public review processes according to the antitrust law in terms of many mergers and acquisitions declared in airlines industry due to lack of guidelines,experience and administrative intervention.The lack of scientific and rational process of the analysis render the public has doubts of whether the antitrust agencies reported the results on the basis of legal analysis.Therefore,economic theories and methods are necessarily used and antitrust law system of the European countries and United States are reffered to research antitrust core issues of mergers and acquisitions in airline industry.It starts with the antitrust economic theories which are the foundation and wind direction of the antitrust practice.The evolution and development of economic theories to research the source of antitrust are researched.Second,since the United States and the European Union have relatively perfect legal system in antitrust legislation,the legal system in horizontal mergers and acquisitions of the United States and the European Union especially the Horizontal Merger Guidelines are researched.The evolution,substantial standared and experience in law enforcement in a merger case are emphatically analyzed.Core issues of antitrust in airlines industry such as the relevant market definition,assessment of the impact of competition and remedy are emphatically researched.Based on the method “Small but Significant Non-transitory Increase in Price”,Critical Loss Analysis is applied to accomplish an empirical analysis.The relevant geographic market is defined empirically in the case of US Airways' merger with American Airlines.The case of China Eastern Airlines' merger with Shanghai airlines in 2009 is analyzed as the research object using structure analysis method.The analysis results show that 80 overlapping routes are involved in the merger and 21 of them may harm the competition,which needs a certain amount of compensation measures to reduce its impact.