Today, the merger between American Airlines and US Airways became official. Once the merger is completed, the newly formed airline will control approximately 20% of the market according to an article on August 7, 2012 in the Los Angeles Times. There has been a lot of controversy about the merger, with some opponents calling the union between the two airlines a monopoly that would reduce competition and raise fares. We know that a monopoly, according to our textbook, is defined as the “only seller in the market.” One thing we know for certain, is that even after the merger, the newly-formed American Airlines Group Inc., is not the only seller in the market. However, if we take a closer look we may see that American Airlines Group, fits the characteristics of a monopoly if we look at market power. Market power exists when a seller can control the market, specifically when it comes to price and quantity demanded. In more specific markets, where American Airlines dominates, like Reagan National Airport, we can see how American Airline has market power and could potentially have market power. In anticipation of this, one article describes the details of a settlement where American Airlines will have to give up some of their market power and share some of its flight slots with Southwest and JetBlue. All in all, American Airlines with give up 52 flight slots at Reagan National effectively lowering its market share from 70% to 56%. 56% is still a pretty big chunk of the market in the Washington, D.C. airport but if we examine airports nationally, we can see that each airport has its own market power. We find Delta in Salt Lake City or Continental in Houston, TX as huge market powers of their respective airports. I think this variance across the nation helps to alleviate the possible repercussions of any monopoly and its effect on price within the industry.