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Mesaba Chapter 11

TwinTails

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Mesaba filed for Chapter 11 today. Comair grounded some planes although I'm not sure how many.

Does anyone else see Northwest and Delta coming together to fly 100 seat planes, and pay pilots regional type wages?

Just an idea.
 

FN FAL

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If you do a google search using "airline" and "merger" as key word, I think you'll find a story titled someting like "Mergers won't save airlines".

I didn't read the story, but I'm assuming there's some explaination as to why mergers wont work in that story, since you asked.

I'm going to take a big guess here and say that there's a lot management that won't want to see their jobs go out the window, because that's the only benefit merging will give...the elimination at the top end.
 

TwinTails

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I was thinking more along the lines of two seprate companies. ONe flying long haul and international. And one being a low cost carrier. They wouldn't have to slim down management very much and they could even call back a large number of furlouged pilots. Not saying that these guys would come back to fly a EMB-190 for 30/hr.
 

FN FAL

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here's the article I was thinking of...

Mega mergers might not help airline industry

By James W. Brock

As more of the nation's largest airlines sink into bankruptcy, mega-mergers are beginning to be touted as a cure for the airline industry's serious ills.

Consolidating Delta, Northwest, United, American and US Airways to form even fewer, even bigger carriers, it is being suggested, will return our sick airline giants to health.

There are only two fatal flaws with this prescription -it might work, and it might not.

If it worked, it would concentrate control of the industry into even fewer, even more powerful firms. The hub monopolies that the major carriers have exploited to torment air passengers for two decades would gain even more clout, enabling the merged firms to price even more monopolistically.

It would also give the major airlines more market power to drive out smaller competitors through such tactics as temporary, predatory cuts in fares; denial of access to terminals, gates, and takeoff and landing slots; and obstructing their access to computer and online reservation systems.

So if mega-mergers work we will see even more passengers traveling even farther to escape sky-high fares at monopoly hubs, and wasting even more gasoline and driving time. We will see the innate advantages of air travel - speed, ease, convenience - eroded even more.

In short, we would suffer the disadvantages of airline monopoly on a nationwide scale.

On the other hand, merging major bankrupt carriers might fail. The proposal rests on the highly dubious assumption that the basic problem of United, American, USAir, Delta, and Northwest is that they are too small to be efficient and effective - an assumption that flies in the face of reality.

Recall that it is smaller carriers like JetBlue and Airtran - firms that are a fraction of the size of United, USAir, Delta, or Northwest in terms of revenues and aircraft fleets - that are running profit rings around the collapsing giants.

It is the smaller carriers that (along with Southwest) have pioneered the low-cost policy of flying only one type of aircraft in order to economize on parts and maintenance. It is they who have avoided the high costs of monopoly hubs which are fully utilized only a few times during the day.

In fact, it can be argued that mergers over the past 20 years paved the way to the catastrophic conditions now afflicting the major airlines.

During that era, Northwest acquired Republic Airlines, a major regional carrier in the upper Midwest, to monopolize hubs in Detroit and Minneapolis. American Airlines absorbed feisty upstart AirCal on the West Coast, and acquired TWA after the latter had acquired Ozark Airlines, another formerly successful regional carrier. Delta acquired Western Airlines, a major carrier in the western region of the country. And USAir acquired Pacific Southwest Airlines, as well as Piedmont, a highly successful and rapidly expanding former regional carrier.

The majors also obtained control over most of the nation's commuter carriers, and have struck "alliances'' and partnership pacts with virtually all of the world's largest carriers outside the U.S.

So if mergers are bad for airline travelers and bad for airlines what is the solution?

Dumping billions more dollars of taxpayer funds into failed mega-carriers is clearly not the answer. Since 9-11, the airline giants already have received billions of public subsidies, billions of government loan guarantees and billions of government bailouts of their immense pension liabilities.

Perhaps, instead, smaller carriers that have demonstrated their superior ability to operate airlines efficiently and profitably should be encouraged to acquire the assets and employ the people of the failed major carriers, and to do so in ways that will promote rather than destroy competition in the field. Perhaps the current turmoil affords a golden opportunity to remove the chokehold of monopoly over the nation's major airports and routes in order to encourage the entry and expansion of more new competitors.

Instead of repeating the mistakes of the past, perhaps now is the time to truly begin to remedy them.

James W. Brock is the Moeckel Professor of Economics at Miami University in Oxford, Ohio and author of "The Bigness Complex,'' published by the Stanford University Press.
 
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350DRIVER

TwinTails said:
Mesaba filed for Chapter 11 today. Comair grounded some planes although I'm not sure how many.

Does anyone else see Northwest and Delta coming together to fly 100 seat planes, and pay pilots regional type wages?

Just an idea.

Northwest and Delta might be a possibility but certainly not the answer alone if these two carriers are to succeed. Mailine flying needs to be done by mainline equipment flown by mainline pilots, bout time Delta finally is going to revamp the route structure(s) with regards to what equipment is going to service certain pairings. Long time overdue. Outsource all "your" flying to lowest bidder, regional jet operators, etc, then likely problems will start come to light ala 2005.

just one of many problems.

T, that $640,000 buyout to get out of that left seat on that MD would have allowed you to say "adios CVG"! -
 
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