Delta merger:Anderson's style: Dream big act fast--artilce

[iaflyer]

It is funny. Every Wall Street article says reduction in overlapping routes to decrease capacity and increase ticket prices. Every pilot at these airlines is sure this will not happen. I really wish you guys the best of luck, but you are going to need it.

From what I see, Wall Street is looking at a merger in isolation from the other airlines. Sure, if you only have two airlines, they merge and reduce overlapping routes, sure, you'll have less seats and supply/demand says the prices will go up.

The issue in the airline business is that there are a bunch of other airlines that will jump into those markets and put more seats out for sale. So, the original airlines that merged have less seats, but they can't raise their prices because everyone else put seats in the markets at the lower price. Hopefully Wall Street and the airlines will see this and not make lots of cuts.