New Jack City: Will USAirways Land American? Consolidation Heats Up

airplane_xlgIt only stands to reason.

The practice of airlines buying each other out makes for less competition and seat availability. Hence higher fares. Especially on routes on which they once competed for passengers.

And there have been plenty of buyouts in recent times.

* AMERICA WEST bought USAIRWAYS a while back but kept the latter better known name.

*UNITED acquired CONTINENTAL.

* DELTA snapped up NORTHWEST.

* SOUTHWEST purchased AIRTRAN and will soon merge it into its Southwest brand.

Now rumors are,uh, flying that high that USAirways will acquire American Airlines which is currently flying under Chapter 11 bankruptcy protection.

This latest combination would make for the world’s largest carrier and USAIRWAYS would retain the American moniker since it’s a legacy brand and better known around the globe.

The deal could go down within the next few days.

Add to these mergers the continuing practice of ‘Code Sharing’ and the airlines come out the clear winners.

Example: a code shared Lufthansa flight from Newark to Frankfurt could carry both its LH flight number as well as a United designated number.

airplane-movie-image-leslie-nielsen-01The reason?

It eliminates the cost of the carriers flying separate competing aircraft on the same route. It therefore reduces seat availability within the city pair and drives up the ticket price.

Profits of the now COMBINED flight are then shared between the two airlines.

Think I’m kidding? I’ve seen flights with up to four different carrier codes on them.

Your itinerary on the above example would state in small type: ‘United Airlines flight # 1234 is operated by Lufthansa German Airlines.’

So are these mergers good for the traveling public? The airlines would have you think so. But we all know that less competition almost always results in higher prices.
 
And the airline industry is a great example of that.

This entry was posted in Jack Poessiger. Bookmark the permalink.

One Response to New Jack City: Will USAirways Land American? Consolidation Heats Up

  1. jon says:

    Fasten your seatbelts it’s going to be a rough flight. Or in the words of the pilot: Have you ever seen a grown man naked

Comments are closed.