The following are several potential threats to travelers as a result of airline consolidation, according to the U.S. General Accounting Office, a non-partisan research service:
- Less meaningful competition in select markets
- Greater likelihood of travel disruptions because of labor or financial crises
- Reduced service in specific communities
- Additional barriers making it more difficult for new airlines to enter markets
Three major domestic airlines were completely taken over by their merger partners in the last decade: TWA by American, America West by US Airways and Northwest by Delta. In all three mergers certain cities lost service, with other cities having reduced flight frequency and nonstop service being dropped in many instances.
As to the airline claims that mergers increase efficiency, any improvements due to mergers appear to be of short duration and recent history shows that for whatever reason eventually the less punctual partner (in terms of on time performance) exerts the greater influence. Similarly the partner with the poorest customer service skills (as evidenced by customer complaints) appears to negatively influence the merged airline. In other words, generally, on time performance decreases and customer complaints increase after a merger, opposite of what the carriers claim.
History shows that when one airline dominates a route where previously it competed with a merger partner, ticket prices often increase, sometimes by a significant amount. It only makes good business sense for the carriers to take advantage of the less competitive situation they find themselves in once a merger has been completed.
0 comments:
Post a Comment