The necessity for airline consolidation can be summed up in one, inescapable reality: the industry is not now, nor has it been, sufficiently profitable to attract investment capital.
Everyone touts WN as the darling of the industry. Well, WN is the least ugly of an ugly lot. If you bought WN's stock 9 years ago, you would have paid just about what the price is today - zip capital appreciation. With a diddly 2 cents a share dividend, who's going to want to invest in a company like that? Do you want that stock in your 401k? Even WN is talking about reducing capacity this year.
The airline industry has several choices, of which consolidation is, IMO, the least offensive: a) bankruptcy for some; b) liquidation for some others; c) re-regulation (don't forget the railroads!); or, d) consolidation via mergers.
The only thing keeping airline stock prices from the deep six right now is investor hope that consolidation will occur and improve margins sufficiently to make the industry a worthwhile investment.
I predict it will be a game of musical chairs. DL-NW will go through, taking one seat off the floor. If CO-UA goes through, that'll take another seat away. The unlucky legacies will be those who don't have a seat when the music stops.
As for mergers being good for customers, I can only say this: some changes may occur that do not elevate the customer experience. But, if consolidation eventually leads to more rational (higher) pricing, the customer experience will improve because capital will return to the industry.