Airline Merger-o-Rama

Hey, it’s the 1980s all over again. Or so they tell us, we don’t remember most of the 80s. Anyway, airlines are talking about merging and you want to know, “Is this good for me?” David Grossman of USA Today is so excited about the potential pairings that he’s drawn up a chart matching airlines with potential mates…and for 10 minutes we thought it was actually the NFC playoff picture. San Francisco is still alive? Really? They play Delta next week? An example:

    American
    Continental: No
    Delta: No
    Northwest: Yes
    United: No
    US Airways: Yes

So, is it good for you or not? More inside.

There is no answer. Mergers can cause breaks in customer service, small markets can see loss of service as the new, bigger carriers concentrate on more profitable routes, and fewer, bigger airlines could mean less competition and higher prices. Of course, not everyone agrees with that last part. From USA Today:

    “Rolfe Shellenberger, an airline marketing expert and corporate travel cost-control consultant, says such an analysis ignores today’s market realities.
    “If there’s a vacuum left in any market by the super-big carriers reducing capacity, somebody will come in and fill it,” he says. “Everybody forgets that airline assets, unlike factories, are portable.”

    Clifford Winston, an economist and scholar at the Brookings Institution in Washington, D.C., adds to Shellenberger’s argument. Consolidation may even deliver lower fares in some markets, he says. As a carrier withdraws or cuts back in a market as a result of a merger, he says, other carriers will fill the void.
    “Who you get coming in may be better than what you had before,” Winston says.”

Call us cynical, but we’ll believe it when we see it.—MEGHANN MARCO

Airline mergers: D

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vu all over again? [USA Today]
Would air mergers help or hurt fliers? [USA Today]

Comments

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  1. winnabago says:

    I don’t know about mergers and whatnot, but that’s one cool tilt-shift photo.

  2. JT says:

    Didn’t we see this behavior shot down ( :D ) by Leonardo DeCaprio when he rebutted Alec Baldwin’s push in congress (Via the Funny Doctor in MASH, his corrupt buddy chairing the committee) to monopolize trans atlantic flight?

  3. Solo says:

    “Consolidation may even deliver lower fares in some markets, he says”

    …may even deliver…

    Sure, given an infinite universe, after an infinite amount of time, all that may be possible.

    Fewer competitors, bigger airlines, fewer flights, fewer routes, more full planes: better for consumers?

    Whatever.

  4. acambras says:

    Yeah, I call bullshit on both of those guys. My parents live in decent-size cities, but it’s damn near impossible to get decent airfare to their local airports. I end up flying into New Orleans, renting a car, and driving 2 hours to see Mom, & 3 to see Dad.

    Has ANYONE out there experienced a general decline in fares in smaller markets? I’m curious.

  5. The_Truth says:

    Of course someone will come in and fill the void, duh! With all the consolations of the airlines into just a few big ones, and then them focusing on the better markets, then into the void will come one of the .. other … big airlines.. thats focussing on these profitable markets.

    Force em to compete dammit, the only one who actually seems to be doing this rather than bitching about everything is South West.

  6. cindel says:

    Don’t Care; will still fly Jetblue.

  7. acambras says:

    I would definitely fly JetBlue more often if they flew to more places.

  8. Chairman-Meow says:

    JetBlue Rocks. They go out of their way to treat you like a human being. Hmmm, treat your customers well, and they’ll return every time ? Such a concept !

    I’m constantly amused that the Dinosaur airlines still cannot figure this out.

  9. acambras says:

    The boyfriend and I fly into Mexico City a couple of times a year to see his family. We flew to New Orleans on JetBlue to see my family at Thanksgiving — we were so impressed that within 15 minutes of returning home, we checked JetBlue’s website to see if they fly to Mexico City. Alas, they don’t, but there is a place on their website where you can request a destination (I guess if enough people ask, they’ll try to make it happen).

  10. Grrrrrrr, now with two buns made of bacon. says:

    “Look…we’re up so high, everything at the airport looks like a plastic toy!”

    I don’t buy Winston’s reasoning. It seems more like everyone is cutting back flights and filling plans, while at the same time the prices keep going up. If anything, I think flying has gotten much worse in the last couple of years.

  11. FLConsumer says:

    I still think that it’s a scam that airfare in Europe (on their private carriers, not counting their gov’t subsidized ones) is cheaper than the USA (even with VAT included) and that it’s often cheaper to fly to/from Europe to the USA than to fly within the USA.

  12. Has there EVER been a merger that was good for consumers? I mean, I’m thinking hard, but every time companies have merged that I’m aware of, they screw up their records, downsize the dedicated employees, outsource customer service and *then* raise the prices!