tom911
Jan 15, 08, 2:27 am
Some corporate mergers have little effect on customers. But when big airlines merge, it changes life for travelers, leading to higher ticket prices, poorer service and maybe even a switch in the credit card you carry.
For the fractured airline industry, where nine big airlines fight coast-to-coast, removing large competitors and bulking up flight schedules could be a way to better survive high oil prices and recession instead of the bankruptcies and turmoil of past downturns. That's why Delta Air Lines Inc. may be considering formal merger talks with either UAL Corp.'s United Airlines or Northwest Airlines Corp., and why analysts think multiple major marriages could lie ahead.
"By default or design, I think it's going to happen. If it doesn't, they'll be back in the tank again," said Gordon Bethune, the former head of Continental Airlines who has been advising some big airline investors on merger prospects.
http://online.wsj.com/article/SB120036196748790123.html?mod=googlenews_wsj
Further down in the article there's commentary about how consumers and employees are likely to be impacted, and Randy Peterson has some comments. One line that stood out for me:
"Airline mergers help stockholders and the company, but not consumers," said Paul Hudson, executive director of the Aviation Consumer Action Project, a nonprofit group.
For the fractured airline industry, where nine big airlines fight coast-to-coast, removing large competitors and bulking up flight schedules could be a way to better survive high oil prices and recession instead of the bankruptcies and turmoil of past downturns. That's why Delta Air Lines Inc. may be considering formal merger talks with either UAL Corp.'s United Airlines or Northwest Airlines Corp., and why analysts think multiple major marriages could lie ahead.
"By default or design, I think it's going to happen. If it doesn't, they'll be back in the tank again," said Gordon Bethune, the former head of Continental Airlines who has been advising some big airline investors on merger prospects.
http://online.wsj.com/article/SB120036196748790123.html?mod=googlenews_wsj
Further down in the article there's commentary about how consumers and employees are likely to be impacted, and Randy Peterson has some comments. One line that stood out for me:
"Airline mergers help stockholders and the company, but not consumers," said Paul Hudson, executive director of the Aviation Consumer Action Project, a nonprofit group.