CARS HOMES JOBS

Travelers may save, but can airlines survive?

Thursday, August 15, 2013
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On the face of it, the federal government’s antitrust suit against the latest legacy airline merger plan — American with USAirways — wouldn’t seem to have much impact on Capital Region travelers. That’s because American pulled out of Albany five years ago, is in bankruptcy, and isn’t expected to re-enter the market even if the merger goes through.

But rejection of the merger would be good for fliers everywhere if it forced the carriers — not just American and USAirways, which continues to serve Albany International Airport, but the industry’s other major players as well — to sharpen their pencils and become more competitive instead of a fat, happy oligopoly.

Fares, as well as fees for services the airlines used to give away, have risen steadily everywhere in recent years, as the government has approved one large merger after another. And an American-USAirways merger would put 80 percent of the domestic market in the hands of just four carriers.

The Justice Department suit notes that competition would be especially limited at Washington’s Reagan National Airport, where a combined American-USAirways would control 69 percent of the takeoff and landing slots. In fact, that airport is a popular USAirways hub for Albany passengers bound for other destinations, so some could definitely be affected by monopolistic pricing there.

Indeed, the suit cautions that USAirways, which tends to operate in smaller airports (like Albany’s), would be less inclined to offer low fares from those cities if a merger went through; and USAirways’ lower fares have apparently helped restrain those of its competitors.

The big question with the government’s strategy, which it says will spare consumers hundreds of millions of dollars a year in higher fares and fees, is whether either airline can survive independently. Maybe they will, now that bankruptcies have enabled both to get out from under onerous labor contracts. But both are still pretty fragile, and a spike in oil prices or a slumping economy might send them into a fatal tailspin, which would be bad for airports like Albany’s.

 
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comments

August 15, 2013
1:43 a.m.
Fritzdawg says...

Wanna help out the airlines?
.
Abolish the TSA.
.
The TSA is DESTROYING the airline industry.
Lately, if you are traveling less than 400 miles, it's quicker to drive it, and much less expensive.
.
The TSA, is little more than "security theater" that feeds on irrational fears.
Your contrived fear merely provides a paycheck to those who's only known skill, is asking "Do you want fries with that?"
.
Most people don't want to arrive 2 hours early, for a 1 hour flight so that they might be questioned, searched, groped, and pretty much be treated like a criminal before they are allowed to spend $35 per bag, and $5 for the same bottle of water they made you throw out before the checkpoint.
.
Before 9/11, the last hijacked flight that originally took off in the USA occurred 30 years prior, when a FedEx employee commandeered a FedEx plane to use as a cruise missile, to kill his boss, and airline hijacking is not nearly as prevalent as they would lead you to believe.
.
If you actually believe that the shoe bomber, or the underwear bomber were a credible threat, I have a bridge I'd like to sell you.
.
Besides, neither flight originated in the USA, and the bottom line is that most people don't want to fly any more because of all that nonsense.

Wanna use a plane as a weapon? Charter one.
.
Private planes are not subject to the same rules.
You can board with a SHOTGUN in hand if that's what floats your boat.
IT'S YOUR PLANE.

August 15, 2013
6:49 a.m.
muggy says...

Well done Fritz. Milton Friedman once said, "The government solution to a problem is as bad as the problem." One of the reactions to 9/11 was to nationalize the security workforce at the nation's airports via the TSA. Since then, we've been subjected to the most intrusive and personalized searches, on a grand scale, ever. Meanwhile, say a few specifics phrases at the southern border and you're put into a hotel room at the U.S. taxpayers' expense and an appearance ticket . Oh, by the way. There's no way for them to make sure you show up to your immigration hearing. Government isn't the solution. Government is the problem. (Ronald Reagan)

August 15, 2013
6:56 p.m.
albright1 says...

The only reason that Washington is opposing the merger is that affects flights at Reagan Int'l. If they don't approve the merger, American goes out of business and you still have 4 major carriers. Duh!! I guess if the airlines agreed to grease the skids a little with some generous contributions to the politicians, they could get this done.

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