Airline Mergers

I posted a question on LinkedIn that asked if people saw any potential benefit to the proposed airline mergers that have been drifting about lately. It generated a flurry of responses.

Aside from one person associated with the industry who saw benefits for customers, employees, and investors alike, everyone was pretty vitriolic that there would be no benefits at all. I agree with the voice of the crowd.

The research with which I am familiar shows that 60 - 70% of all mergers fail to deliver any shareholder value over time. In a struggling industry where the mergers are combinations of operationally and profitability challenged players, I would say that the odds are lower still. Some, however, disagree.

As a frequent flyer, I haven't seen anything make the flying experience better in some time. Worse still, there doesn't seem to be much effort being exerted by the airlines. It seems more like they are putting up with customers (especially in coach) rather than trying to satisfy them. Airplanes are more crowded, staff is more stressed, and the amenities ever fewer. The latest report on customer satisfaction with U.S. airlines is due out tomorrow and was previewed on Good Morning America today.

I am on the US Air shuttle between Boston and New York or Washington on a regular basis. Once US Air merged with America West, the only change I saw was fewer options available at the automated kiosks. It became harder and took longer to check in. And have you tried to use your miles to get a flight lately? Don't get me started.

Now that all of the majors seem to be edging closer to the M&A dance floor, there could be a significant impact on a number of routes.

The rumour mill has quieted a bit in recent weeks but don't expect it to stay that way.

What do you think? Will the mergers, should they come to pass, benefit or hurt passengers?