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Posts: 515
Joined: Sat Aug 17, 2002 3:07 pm

Consolidation Of US Airlines

Sat Sep 07, 2002 2:00 pm

Do members think that a prolonged war with Iraq will lead to the collapse / consolidation of some US airlines. In any consolidation who would be expected to merge with who and what will be the effect on existing global alliances.
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Consolidation Of US Airlines

Sun Sep 08, 2002 4:25 am

The U.S. airline industry had already started to consolidate before 9/11/01. The failed breakup of US Airways (to UAL and AA and DC Air) was what triggered it. American responded to the original UAL/U merger by acquiring TWA, which was already in serious trouble. TWA had even been targeted by AirTran before that, but the costs were a little steep for AirTran. These events triggered rumors of NW or DL taking over CO, or AS, or AWA, and merger mania seemed to be in the air. But when the DoJ voice objections to the UAL/U/AA agreement, everything came to a standstill. The economy was turning sour, and then came 9/11, which really was something that anyone could have predicted. With the bankruptcy filing of US Airways, that really has begun to first signs of a shakeup in the industry. Add to this the fact that the only airlines to really be growing and making money have been the low-fare carriers like Southwest, JetBlue and AirTran, and this was at the expense of the major carriers. The airline industry is very cyclical, this is just the wheel going back down into the rut. We will see the current 10 major airlines shaken up, and some names may disappear, while newer brands will grow to be among the majors. Who would have though 10, 15 years ago that ATA, Alaska, and AWA would be major airlines? It looks like AirTran, JetBlue, and Frontier may be poised to become their generation's new majors.