Tuesday, June 30, 2009

The Economic Impact of Regulation

According to the business news website StreetInsider, airline stocks have been adversely impacted by the recent filing from the Department of Justice on the pending application for Continental Airlines to join the Star Alliance with full antitrust immunity.  This comes after all major U.S. carriers save Southwest Airlines experienced double-digit falls last month in their stock value.  It will be interesting (and perhaps disconcerting) to examine the numbers once the Department of Transportation issues its final order on Star's application.  Undoubtedly the decision will signal investors as to the likelihood of American Airlines receiving final approve and immunity for its pending hook-up with British Airways and Iberia as part of the oneworld alliance.  A final decision from the DOT on that application is expected by the end of October.


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