6 Ways Airline Mergers Will Affect Travelers

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Airline Mergers

What is going on in the airline industry today with $115 a barrel oil is survival of the the fitest at its economic extreme. Said differently, he who can lose money longest wins. US Based Carrier Mergers won't work unless both parties have a tremendous amount of cash to burn through while they sort through the enormous complexities of putting two ( or more ) airlines together, and if cash is needed to "buy" labor peace during the process, the positives of any merger will be cancelled.

The most viable long term solutions to the problems of US based carriers are:

1/ For Uncle Sam to shore up and drive up the value of the dollar, and thus drive down the value of a barrel of oil for us.

2/ For Uncle Sam to permit more cross border investment between airlines as exists in all other industries which would increase capital effiecincy and drive less destructive mergers.

3/ For Uncle Sam to start investing and upgrading the Air Traffic Control System with state of the art GPS technology versus the current vacuum tube technology.

( This needs to be done for Global Warning concerns alone.)

Tom McCabe of NY @ May 03, 2008 17:04:06 PM

DELTA NORTHWEST MERGER

THIS MERGER IS BEING DONE FOR CEO'S AND HIGH MANAGEMENT TO STEAL A LOT OF MONEY FROM THEIR EMPLOYEE'S AND OTHER STOCK HOLDERS NW CAN AND SHOULD SURVIVE BY ITSELF NOT LIKE DELTA NW OWNS MINNESOTA TAXPAYERS THE LOYALLY TO STAY THE COURSE FOR MINNESOTA HAS TWICE BAILED OUT NWA THE WILL BE LOTS OF LOST JOBS BECAUSE DELTA BEING NONUNION WITH THE OLD NWA REGRIME IN CHARGE FOOL US ONCE SHAME ON YOU FOOL US TWICE SHAME ON US. TO BAD WE HAVE A CLOWN IN OFFICE MAYBE HE'LL WAKE UP JUST ONCE AND DENY THIS MERGER .

STEVE WINKELMAN 084516 of MN @ May 01, 2008 13:29:59 PM

I don't believe for a minute that airlines caused the fares to reduce like they have.

Airline deregulation is what did away with airline fares, When I was a kid some 30 years ago. Mom would pay per person $800 or more to fly from Houston to Denver. Now tickets can be purchased for just $198.00 a 75% reduction, and a incredible raise in inflation and overall operational expenses. Fares need to be fair to the airlines for services rendered, and NOT Penalize them for things beyond the control like weather and ATC.

Even in the 90's early 90's the fares, were still higher than they are now. Airlines, have no support over what the gas prices are, yet they do not get paid til' I fly.

Any other industry in the country being sports, entertainment, or many other things, do not lose the money If I don't go. They get paid because I bought a ticket. Period. Airlines, have to overbook flts because people don't fly, and airlines have to gamble to decide if all seats will sell.

Do not mention my name in this response, I work for an airline

Keep it secret please of TX @ Apr 16, 2008 01:06:22 AM

Wrong about cuts

I think most of the analysts are not noticing that Delta generates it's best margins at the CVG airport. Flying in and out of there is about the most expensive in the US.

Second, Delta is a non union workforce, and I don't see major union facilities like Detroit and Minneapolis winning out in the long run - those will be down scaled since they both suffer from weather and labor issues.

Third, in spite of the press, this merger is not what Detroit needs now, it will bring less traffic to the airport, not more. The automobile business climate has been shifting away from Michigan and further south - follow the path of the Asian automakers down I-75. Perhaps the only good news is more low cost carriers into DTW to replace the losses from DL/NWA. Not good on the jobs front though...

Airlines follow suit - and will focus more routes and departures to service those major business clients, particularly on international business.

All in all it will take three years or so to see the impact.

While I realize the situation the carriers find themselves in, it is partially their problem for lowering fares to the point that virtually no one can make money.

Perhaps it's time to regulate the industry if they can't play together well.

frustrated flyer of MI @ Apr 15, 2008 11:12:11 AM

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Rick Newman

Rick Newman

The global economy is mysterious, even scary. Chief Business Correspondent Rick Newman connects the dots. In addition to his writing for U.S. News, Rick is the co-author of two books: Firefight: Inside the Battle to Save the Pentagon on 9/11, and Bury Us Upside Down: The Misty Pilots and the Secret Battle for the Ho Chi Minh Trail.

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