Perhaps the people at Delta (DAL) did not get the memo. The reasons for airline mergers seem to be a bit soft. While there may be come savings in cutting ground crews and reservations people, customers often walk away from the mess of a merger. Service just becomes too poor.
“A merger almost inevitably is going to cause some service problems,” said Philip A. Baggaley, an analyst at Standard & Poor’s told The New York Times.
Mergers also do nothing to address high fuel costs, infrastructure, and aircraft maintenance expenses.
False economies may drive another round of carrier mergers, but they won’t keep airlines out of bankruptcy court if fuel costs stay high and the economy is weak.
The reasons that airline boards are looking at big combinations is that hope springs eternal. A merger may bring some short-term savings and "buy time" for an upturn in the economy to lift all boats.
The big airlines have another alternative. Do the hard thing. Get with labor. Cut costs. Or have another wreck in which jobs are lost more randomly because they cannot be supported by revenue.
Douglas A. McIntyre
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