2008 Woodie Awards
Airline mergers could add to travelers' confusion
By: THE ASSOCIATED PRESS
Issue date: 4/16/08 Section: Nation
PHOENIX - Getting hitched may be the right move for Delta and Northwest. But for beleaguered air travelers, it could usher in an era of fewer flights, more confusion at the airport and even more crowded planes.
The merger could kick off a wave of airline consolidation. And while the effects would not be immediate because the combinations could take months to get regulatory approval, industry observers say get ready anyway for fewer carriers in the sky.
"It's not an industry that works," said Mark Cooper, director of research for the Consumer Federation of America, who lobbied Congress against a bid by US Airways for Delta last year.
"We're now getting to the point where there are so few carriers left, and they still can't make money," he said.
Mergers, combined with a recent spate of airline bankruptcies, mean passengers in many cities can expect fewer flights to choose from, and they'll be packed even fuller than they are now.
Greater demand for remaining seats translates into higher ticket prices.
"There's no doubt in my mind fares are going to go up," said Rick Seaney, chief executive of FareCompare.com, which tracks changes in airline ticket prices. "Consumers are deluding themselves if they think that's not the case."
Peter Schiff, president of brokerage firm Euro Pacific Capital, said the changes could put air travel out of reach for Americans of modest means.
"Although many Americans have come to regard affordable air travel as a birthright, from a global perspective it remains the province of the wealthy," Schiff said.
That could mean more headaches for travelers already reeling from a string of cancellations due to stepped-up scrutiny of safety regulations by the Federal Aviation Administration.
The merger announcement by Northwest Airlines Corp. and Delta Air Lines Inc., which would create the world's largest airline, has already ignited talks among other airlines as they seek to bulk up to combat rising fuel prices in a slowing economy.
Continental Airlines Inc. executives told employees yesterday that the airline wants to remain independent - but warned "the landscape is changing" and said it would consider its "strategic alternatives."
The executives did not say what they might consider, but Continental has held talks with United Airlines in the past.
The merger could kick off a wave of airline consolidation. And while the effects would not be immediate because the combinations could take months to get regulatory approval, industry observers say get ready anyway for fewer carriers in the sky.
"It's not an industry that works," said Mark Cooper, director of research for the Consumer Federation of America, who lobbied Congress against a bid by US Airways for Delta last year.
"We're now getting to the point where there are so few carriers left, and they still can't make money," he said.
Mergers, combined with a recent spate of airline bankruptcies, mean passengers in many cities can expect fewer flights to choose from, and they'll be packed even fuller than they are now.
Greater demand for remaining seats translates into higher ticket prices.
"There's no doubt in my mind fares are going to go up," said Rick Seaney, chief executive of FareCompare.com, which tracks changes in airline ticket prices. "Consumers are deluding themselves if they think that's not the case."
Peter Schiff, president of brokerage firm Euro Pacific Capital, said the changes could put air travel out of reach for Americans of modest means.
"Although many Americans have come to regard affordable air travel as a birthright, from a global perspective it remains the province of the wealthy," Schiff said.
That could mean more headaches for travelers already reeling from a string of cancellations due to stepped-up scrutiny of safety regulations by the Federal Aviation Administration.
The merger announcement by Northwest Airlines Corp. and Delta Air Lines Inc., which would create the world's largest airline, has already ignited talks among other airlines as they seek to bulk up to combat rising fuel prices in a slowing economy.
Continental Airlines Inc. executives told employees yesterday that the airline wants to remain independent - but warned "the landscape is changing" and said it would consider its "strategic alternatives."
The executives did not say what they might consider, but Continental has held talks with United Airlines in the past.
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