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

j

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