Originally Posted by ContinentalFan
I just don't know if the common wisdom is right on pending consolidation in the airline industry. I have heard a lot of analysts claim it--it's kind of an unchallenged doctrine at this point. However, the arguments in favor of consolidation don't seem to hold up to a critical examination.
I agree. Consoliation amongst "legacy" carriers really don't solve the root of the problem for most of them--high costs. Even if there is a transient decrease in capacity after mergers (thus increasing yield somewhat), LCCs (new or old) would still have lower costs and thus pricing power. Does that really help the airline industry? I don't know, but that's definitely not the "no brainer" solution most analysts seem to think, IMHO.
LAX