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Joined: Wed Mar 29, 2000 3:28 pm

Airline Mergers Now?

Sat Sep 15, 2001 12:30 pm

With the government possibly willing to help airlines financially do u think that they ll look at mergers with different eyes now? or the antitrust thing is too much?
about the airline-s saying if you really wanna help us let us merge?

I think this is a real strong possiblity.
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RE: Airline Mergers Now?

Sat Sep 15, 2001 12:49 pm


If that would happen Delta finally could buy Continental Airlines. Maybe we could see a merger in the smallest carrires like Vanguard, National, Midwest Express, and so on.

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RE: Airline Mergers Now?

Sat Sep 15, 2001 2:30 pm

I doubt very seriously the Feds would allow the airlines to merge as part of a bailout. Atty General Ashcroft, a free-market conservative, correctly ruled UA-US an anticonsumer nightmare that violated antitrust law. If anything, the Feds might require that the major carriers *not* merge for several years as a condition to bailout.

The one exception to that, I think, might be US Airways. Although they're still cash-flush and far from bankruptcy, the events of Sept. 11 will hasten their demise. Even Steve Wolf can't overcome OSatan Bin Laden.

The Feds just might devise a breakup plan for US Airways that would ensure that five big carriers remained. Deregulation's major failing has been that the airlines consolidated into six high-cost carriers which gouge medium and small-size cities. A bailout would be an opportunity for the Feds to ensure that US's weakness did not turn into a buyout by one carrier.

The Congresspeople and Senators who represent those cities will *not* allow the Cartel-Mafia Six to merge to three anytime soon. These carriers' service and pricing behavior will have to improve a lot, for a long time, before they would be trusted with the market power of merging to three.

Need a new airline paint scheme? Better call Saul! (Bass that is)
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RE: Airline Mergers Now?

Sat Sep 15, 2001 2:45 pm

No offense to anyone, but Delta buying Continental would suck. Continental should buy Delta, if anything. Besides, seeing an MD90 in CO colors would be nice, even though they would probably rid themselves of the -90's.  Smile
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RE: Airline Mergers Now?

Sat Sep 15, 2001 4:24 pm

Maybe among some of the smaller airlines, but I doubt the government would allow any of the Big Six to merger with another member of the family. An airline like America West, Alaska, or ATA could be merged into another carrier if their fortunes spiral downward. There's no telling what the long-term effects to the industry as a whole; I think there will be an airline or two that goes under in the next 6-8 months, Midway went ahead and threw in the towel rather than to face an uphill struggle with a giant rock around their neck in the face of uncertain next few months for the industry. All of the airlines will struggle for the next month or so, but I really think by Thanksgiving the traffic will be heavy as it's always is that time of the year. Some of the airlines already in financial trouble may well go under in the wake of the nationwide shutdown for about two days (half of Tues., all of Wed., and half of Thurs.), and some of the bigger airlines may be facing rough times ahead and could be venturing down the road to Ch. 11.

RE: Airline Mergers Now?

Sat Sep 15, 2001 4:50 pm

The main reason airlines merge is to acquire additional staff, aircraft and routes - because their own are at capacity. No airline for the next few years is going to be short of those commodities - in fact you can expect thousands of layoffs and hundreds of aircraft to be parked up in the desert. American has already said that it's cutting 20% of their services - you can bet that they are going to try and cut themselves loose from TWA if humanly possible.

Look at the situation during and after the Gulf War - it took years, not weeks, for traffic to get back to the levels it was at previously.

Domestic air travel just got a whole lot more expensive, inconvenient and scary for people; plus we're going into what will probably be the worst recession/depression since the 1930s - and the projections I'm seeing in terms of reduction of passenger numbers on US routes are anywhere from 25% to 67%.

Mergers? Don't make me laugh!