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UAL+US, AA+TWA Are These Mergers Doom For Other's?

Wed Jan 10, 2001 1:17 pm

With the impending mergers of UAL+US, AA+TWA is this trouble for the rest of the industry? Forecasters see these as creating market share juggernauts in the US, but what about the rest of the world's airline industry? Will we see these combinations forcing smaller or medium sized airlines to codeshare with them in order to survive?,or will they be wiped clean off the aviation scene by these megapowers?
Food for thought: will passengers really benefit in the long term from these mergers, the slash pricing technique will certainly come into place, but what happens when the competition has been eliminated. A public held at ransom by pricing? Let me know what you think. The US congress can maybe control whatever is to come, but what about those tiny countries who can't?
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RE: UAL+US, AA+TWA Are These Mergers Doom For Other's?

Wed Jan 10, 2001 1:23 pm

I think it is very interesting that the day after all the hoopla about how this buyout is going to push the UA-US deal thru to approval, more opposition has come out. This could be American trying to prove the critics right and forcing the hand of the DOJ to throw both of them out. Will be an interesting few months to say the least.
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RE: UAL+US, AA+TWA Are These Mergers Doom For Other's?

Wed Jan 10, 2001 1:39 pm

Even more to add to this. Once both of those mergers have gone through, if they do, Northwest will most likely merge with Continental. Thus leaving Delta alone amongst the large US based carriers. Listen to this; In 2000, Delta held 20% of domestic travel in the US, and so did Southwest. Southwest is growing as we speak and with little time will surpass Delta. Interesting stuff, huh?
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RE: UAL+US, AA+TWA Are These Mergers Doom For Othe

Wed Jan 10, 2001 2:56 pm

I saw a cycle regarding the idea of consolidation (it was in realtion to rail...)

Deregulation/startups -> mergers/consolidation -> regulation -> breakups -> deregulation...
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RE: UAL+US, AA+TWA Are These Mergers Doom For Other's?

Wed Jan 10, 2001 3:05 pm

These mergers are setting a dengerous standard.Airlines such as those from the Caribbean can be forced out of business. This merger is definitely gonna put the airlines worldwide under pressure, those who are not in alliances are really gonna suffer.
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RE: UAL+US, AA+TWA Are These Mergers Doom For Other's?

Wed Jan 10, 2001 6:06 pm

In my opionion, I can see obvious advantages and major disavatages to all this merging. Maybe I just always try to see the good points who knows. Some good points of these HUGE airlines are new routes to cities or counties that are not currently being served. Improvements on FF miles for passengers and easy connection of flights, baggage and improved schedules. I think the smaller airlines can survive just fine as well if they can offer a good product in which the customers and employees can form a bond with them. In a smaller airline this is a lot easier then a mega carrier. Some airlines like Piedmont, the new Midway, Jet Blue and Southwest have been sucessful in this style of business.

We will begin to see frustrated passengers at major hub airports around the coutry because of an increase of traffic delays at the key locations. Charlotte would be one of these airports if United wants to expand drastically. With increases in ticket prices, lost baggage, poor service, over crowded hubs people will begin to choose the smaller carrier or drive to a less crowded airport with more competitive prices. For example this is already going on at Raleigh Durham over Charlotte. This will only help out the smaller airports in my opinion. Finally, these maga carriers will begin show signs that they have grown to large to fast and will begin to streamline its fleet and over all size down. Eventully, the industry will bring us with about the same ammount of airlines as we have today but with different names. Airlines such as Southwest, Midway, Air Tran, Jet Blue, Alaska, Frontier, may be playing the parts of todays, US Airways, Continental, Northwest in the not too distant future. Wouldn't it be kinda ironic for these large airlines getting swallowed up by names like Jet Blue and Frontier? Its sorta like The big fish eating a baby fish's older brother. Then the fish grows up and look who's invited over for dinner. 

Who knows, its a tricky industry. What logically makes perfect sense never seems to happen when we all sit back and look at things. Its fun to try and figure out though.

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