Merger Mania

October 21 2010 by Chris McGinnis

Plane 200.jpgAirline mergers have been in the news a lot lately. Over the last year, for example, we've witnessed a relatively smooth blending of Delta and Northwest. It was a long time coming, and it's got a long way to go, but United and Continental recently sealed the deal on their merger, as well.

Even low fare carriers are getting in on the act. Southwest recently announced it would absorb AirTran for $1.4 billion. Last year, Denver-based Frontier and Milwaukee-based Midwest Airlines joined forces under the Frontier brand (which makes me happy because we'll keep seeing Frontier's classic animal photos on airplane tails!)

What does this merger mania mean to business travelers? Well, first off, don't expect fares to decrease any time soon. We've watched prices increase over the last year as demand for air travel returned. As we head into the future with fewer players, it's less likely we'll see large scale fare wars.

I think we'll continue to see higher fares on routes monopolized by legacy carriers. But we'll also continue to see reasonable fares in markets where low fare carriers like Southwest, JetBlue, Virgin America or Frontier fly.

So in the end, I think we'll continue to see fares remain similar to where they are right now. They may increase slightly, but I do not foresee any significant decreases.

But while fares may remain stubbornly high, the good news is that we'll see a more stable and mildly profitable airline industry. With profits, airlines will be able to buy new jets or refurbish older ones. They'll be able to take better care of their employees, who in turn will take better care of airline customers.

So, I'm pretty focused on the positives here. What do you think about airline consolidation? Good thing or bad? Please leave your comments below.

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