The real effect of consolidation???

[skywdriver]

So, a lot of unknowns regarding possible mergers. Perhaps the biggest one being what the government will and won't allow. However, it seems pretty obvious that if there are no antitrust issues as far as the government is concerned, that once the domino effect starts, it will end the with odd numbered carrier. I am just curious what some opinions are regarding the results of all of these potential mergers. With loads as high as they are, it is hard to argue that there is any type of overcapacity in the industry. Who picks up the slack? Does a merger of two airlines flying around at 80% loads really call for a reduction in capacity? Perhaps more pricing power? I think it is a huge mystery what the ultimate result would be if all of this mess continues. As it seems, pilot groups against pilot groups have played right into the hands of the current management teams regarding pay/work rule cuts. Perhaps two or three very large pilot goups might have some actual power at the bargaining table. Any thoughts???

 

[General Lee]

So, a lot of unknowns regarding possible mergers. Perhaps the biggest one being what the government will and won't allow. However, it seems pretty obvious that if there are no antitrust issues as far as the government is concerned, that once the domino effect starts, it will end the with odd numbered carrier. I am just curious what some opinions are regarding the results of all of these potential mergers. With loads as high as they are, it is hard to argue that there is any type of overcapacity in the industry. Who picks up the slack? Does a merger of two airlines flying around at 80% loads really call for a reduction in capacity? Perhaps more pricing power? I think it is a huge mystery what the ultimate result would be if all of this mess continues. As it seems, pilot groups against pilot groups have played right into the hands of the current management teams regarding pay/work rule cuts. Perhaps two or three very large pilot goups might have some actual power at the bargaining table. Any thoughts???

Mergers that have been allowed recently have had airlines combine that do not overlap with routes. AWA and USAir didn't have any major conflicts with their route structures. The Gov't recently hinted (thru Norm Mineta when he was Transportation SEC) that an approval for a merger between NWA and DL could be worked out, and they might even "emerge together" from BK. The Gov't does have a lot of say, and they are influenced by local politicians who don't want a lot of job losses in their areas.


Bye Bye--General Lee