Tuesday, April 15, 2008


Are the friendly skies ready when you are?

With the announcement of the merger of Delta Air Lines and Northwest Airlines, I’ve been thinking about the U.S. airline industry. Actually, I was thinking about it on Friday, too, when I emerged from Grand Central Terminal in New York City, looked back over my shoulder at the Met Life Building, and said to my friends, “It’ll always be the Pan Am Building to me.”

The years have seen the closing of a number of airline companies, from classics like Pan Am, TWA, and Eastern, to smaller carriers with a regional focus, like Braniff, Frontier, and New York Air. Some failed altogether. Others were purchased by other companies and merged into their business (American Airlines bought TWA, and Continental assimilated Frontier). The airline business in the U.S. has had an up-and-down history, you’ll excuse the expression.

Yet there’s still quite an array of companies trying to make it, competing for facilities, routes, and passengers. For major U.S. airlines, we have American, United, Continental, US Airways, and JetBlue, in addition to Delta and Northwest. We still have smaller carriers such as AirTran, Southwest Airlines, Midwest Airlines, Sun Country, Alaska, Spirit....

Most other country have one principal airline company, often supported by the state. There are a number of small airlines in Canada, but Air Canada is the big one. The U.K. has British Airways, and we can readily identify SAS, KLM, Air France, Lufthansa, Alitalia, Aeroflot, and El Al.

Can the U.S. continue to support its list of airlines? Or will more mergers and failures collapse the list further — and is that a good thing?

There’s certainly a benefit to be had in merging facilities and resources. Common ticket sales, check-in desks, terminal facilities and gates, baggage handling, and the like would streamline things. Reduced competition could be mitigated by a partial return to pre-1978 regulation. Open competition is not necessarily a good thing for critical infrastructure, such as communication and transportation.

I see the Delta/Northwest merger as a good thing — the latest in a long line of airline mergers, and the next in a continuing series.

1 comment:

Ray said...

Open competition is not necessarily a good thing for critical infrastructure, such as communication and transportation...

... and health care. That's the one that constantly baffles me in this country.