If More U.S. Airlines Merge, Who would Benefit?
An increasing number of airline analysts are raising red flags, noting that federal regulators may not find such the scenario appealing.
United is reportedly watching the US Airways proposal to determine whether the market, Congress, and regulators would also warm to the idea of a United-Continental merger. If the US Airways-Delta merger fails, United is expected to be less likely to move ahead.
Aviation analysts like Kevin Mitchell of the Business Travel Coalition in Radnor, Pa., believe that would be the best scenario. He argues that a flurry of mergers right now would raise prices, overcrowd already-packed planes, and create chaos for customer service for years to come precisely because it is so difficult to merge aviation corporate cultures.
"Of course, Wall Street is going to push it," he says. "What's good for investors, shareholders, and management may not be good for others: Lots of employees will be laid off, and customers can look forward to 20 to 30 percent price hikes and several years of customer-service [misery]."
(c) Copyright 2006. The Christian Science Monitor
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