The Middle Seat: Mergers Benefit Airlines; Shame About the Fliers
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.</br></br>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.</br></br>"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.</br></br>But for travelers, big-airline couplings historically have meant headaches. Airline employees endure change and disappointment -- which could make them act grumpier toward customers. Some communities could see reduced service if mergers allow the combined airlines to close hub operations -- would a merged Delta and Northwest still need hubs in Cincinnati and Memphis, for example? Higher ticket prices are likely; airlines merge in part so that they will have more pricing power.</br></br>But the biggest peril for consumers is poorer service -- late flights, lost baggage, confusion at airports, ticketing troubles and changes in frequent-flier program rules.