DCA-ROCguy From United States of America, joined Apr 2000, 4488 posts, RR: 33
Reply 1, posted (13 years 9 months 4 weeks 18 hours ago) and read 2601 times:
Past history suggests that if the megamergers take place, small low-fare operations like Spirit and Vanguard will be even more vulnerable. The Big Six already operate effectively as an oligarchy, parceling out territory to each other and refusing to compete with low fares, and helping each other bleed travelers and businesses.
If the Big Six become the big three, that will only mean deeper pockets with which to predatory-price low-fare carriers out of existence. They wouldn't do it to all of them right away or the Attorney General and Congress would come down on them like a ton of bricks. But over, say, three to five years, a Big Three would gradually destroy all smaller low-fare operations. I believe that history--eg the late '80s--strongly supports this conclusion.
As for bigger low-fare operations--WN, AT, JB, they might take longer to dispatch. But I firmly believe that US Airways would be more aggressive against Southwest in the Northeast, for example, if they had United's bank account to draw from.
The majors already have an unjust gouge-pricing oligopoly power in most US markets (WN after all only flies to 58 cities and all those have to be able to support 737's). They have demonstrated conclusively that they care nothing for the businessman or leisure traveler and only seek to bleed the maximum cash from a few, which is a slothful and unjust "margin" philosophy.
Spirit, in my view, would be dead with in five years, along with Vanguard, were US/UA and the other sure-to-follow megamergers to go through.
Wjcandee From United States of America, joined Jun 2000, 5103 posts, RR: 18
Reply 3, posted (13 years 9 months 3 weeks 5 days 17 hours ago) and read 2521 times:
Not to be rude, but HUH?!
United's labor experience over the summer showed the other bad side of oligopolies. The larger the target, the more vulnerable it is to an attack by organized labor. So....as United's costs go UP and UP ("United...Rising"), taking AA, now, and the rest of the financially-solvent carriers with them, the low-cost carriers like Spirit, ATA, Midway, etc. will all have an *increasing* or at least stable *cost* advantage. Indeed, JetBlue and Spirit have recently caused TWA to drop Florida destinations like PBI entirely, and cut back dramatically their Florida service. Also, the more consolidation that takes place, the more credence to allegations of predatory (i.e. below-cost) pricing in an effort to put a smaller carrier out of business.