The American Airlines merger with US Airways is under fire. The reason is simple: a merger between these two airlines would create the largest airline in the world — an airline that would have the potential to monopolize the air travel industry. The Justice Department, as well as several states, have filed a joint lawsuit in order to halt the merger. According to USA Today, the Justice Department noted that a merger between these two airlines would give the merged airline control over a whopping 69% of departure and arrival slots at Washington Reagan National Airport — that would be six times more control over the air activity of that airport than the closest competitor.
While other airline mergers have been successfully executed (United/Continental, Southwest/AirTran, Delta/Northwest), it seems as though the root of the problem with this particular merger is that it would be too big, perhaps too big to fail. It should be noted, however, that a USA Today article from December 2012 reported that despite gloomy speculations, none of the previous airline mergers raised fares as predicted.
Has Airline Consolidation Really Been a Boon For Travelers?
During a recent conversation with Charlie Rose, United Airlines CEO Jeff Smisek spoke on the benefits of consolidation in the airline industry.
Smisek opines the corporations’ increased profits means greater investments in the airline’s fleets, including new planes and global WiFi.
“That costs a lot of money,” Smisek said. “And to do that, you’ve got to make money to be able to make those sorts of investments.”
A proposed merger between the bankrupt American Airlines and US Airways is currently under review by the Justice Department. Last month, antitrust lawyer Joseph Alioto filed suit seeking to block the merger, claiming consumers would be negatively impacted. Although attorneys for both airlines decried the suit as baseless, the Government Accountability Office reported that nearly 1,700 routes between would lose a competitor as a result of the merger, affecting more than 53 million passengers.
When United and Continental merged in 2010, competition was decreased across more than 1,100 routes, according to the GAO.
Just how many airlines have caught merger fever? Take a look at this list.
While consolidation has undoubtedly helped the airline’s bottom line, how has it affected the passengers? With fewer airlines vying for your business and fewer flights to and from your destinations, passengers are at the mercy of increasingly large monolithic airlines that, like major banking institutions, are rapidly becoming “too big to fail.”
William McGee, a travel expert with the non-profit Consumers Union (publishes Consumer Reports magazine) raised those and several other issues when testifying about in front of a US Senate Judiciary meeting regarding United’s merger with Continental. McGee testified the airline mergers meant loss of service for many cities, higher fares, reductions in service quality and the threat of widespread service disruptions.
Why Aren’t More Airlines Offering All-You-Can-Fly Deals?
With new start-up Surf Air offering all-you-can-fly pricing, will other, more established airlines follow suit?
Surf Air charges a one-time membership fee of $500, followed by $1,650 monthly payments. The six-seat, single-engine turboprops fly between less-used airports in California, such as Burbank and Santa Barbara, with additional destinations being considered for later in the year.
Unlimited travel isn’t unheard of — commuter-train passengers purchase unlimited-use passes every month and Jet Blue offered its popular $499 “All You Can Jet” pass in 2009 and 2010 to great acclaim. So why aren’t more airlines offering it?
American Airlines offered an unlimited lifetime pass for about five years, before abruptly discontinuing it in the early 1990s. The passes, which sold for $250,000 at the program’s start, actually quadrupled in price by the program’s end after American realized how much the unlimited flights were damaging their bottom line. Sixty-six elite fliers had their passes cancelled, sparking several lawsuits.
So, is it possible for an airline to offer an unlimited flight deal? JetBlue seemed to have much success with their plan, limiting the pass usage to one month and the days you could use the pass (unless, of course, you paid extra). JetBlue never released details on the financial success of the All You Can Jet pass, but perhaps it’s telling they discontinued the plan in favor of GoPacks, a 10-ticket pass selling for $699 to nearly $2,500.
So can a small, limited-route all-you-can-fly carrier succeed? Or if your preferred airline offered a monthly unlimited travel pass, would you take advantage if it?
Turkish Airlines Crew Members Kidnapped In Beirut
Gunmen ambushed a van Friday carrying a Turkish Airlines crew in the Lebanese capital, kidnapping a pilot and a co-pilot in an attack that appeared linked to the ongoing civil war in neighboring Syria, according to the AP.
What Are The Rules For Breastfeeding On A Plane?
It has happened yet again: a mother breastfeeding on a plane was allegedly treated poorly by an airline staff member. The mother was breastfeeding on an American Airlines flight last month while sitting in a window seat next to her husband. Since American Airlines has publicly stated that breastfeeding is allowed on their flights during all stages of flight and that flight attendants should not place restrictions or requirements on breastfeeding mothers, the mother felt free to breastfeed. However, a disgruntled flight attendant requested that she cover up, citing that there were kids present on the plane at the time.
The couple refused and the flight attendant later returned to their aisle, telling a girl seated in the aisle next to the husband that her seat was going to be changed, projecting that the girl was uncomfortable despite the fact that the girl hadn’t complained about the breastfeeding. According to the couple, the flight attendant did not offer service to the couple for the remainder of the flight.
American Airlines responded to the complaint filed by the mother in a letter that was posted to Facebook by a friend of the mother. American Airlines stated in the letter that they believe it is reasonable to request that a mother cover up and that breastfeeding be conducted with modesty and discretion, despite the fact that the manual states that mothers should be able to breastfeed without restriction or requirement and the fact that 45 states allow mothers to breastfeed in any public or private location.
United Airlines, American Airlines, Hawaiian Airlines and others have stated that breastfeeding is not prohibited while on the plane. Whether a breastfeeding mother should be required to cover up, however, seems more ambiguous. What are your thoughts on requiring or requesting that breastfeeding mothers cover up?