Originally Posted by
Opus
The problem with that mindset is that it might your airline that goes out of business and further that is not what has occured. Through the process the airlines have gone to the employees to subsidize the business model. The concept behind DAL/NWA merger was not to reduce capacity but to gain more effective pricing control.
I got nauseated hearing talk, that once United or UsAir and then NWA or Delta shut their doors all would be well. Are you kidding? Read Michael Boyd articles on that subject. If any of those airlines were to fail the remants would be picked up by multiple carriers and thus reducing pricing power. He used the example of UsAir. If UsAir failed and SWA took over PHL, great for SWA guys to continue their quick upgrades, but would that help the industry's pricing power? Or help restore wages?
If pilot groups continue to think so myopically we will continue racing to the bottom. At some point the airlines need to be able to price their product at costs or greater as continually going to the employee groups to subsidize the business model is not a viable plan.
exactly how will a merger gain more effective pricing control? is it one less airline that will refuse to raise ticket prices while they loose money? how many airlines have refused to raise ticket prices while they were losing their arses the past 6 years? I would bet every major out there.
what happens if capacity is reduced? haven't the LCC's just moved in and replaced it? their costs were lower and one of those reasons is because they didn't pay their employees the same as the majors and they outsourced labor groups.
what about all of those 50 seaters flying for the majors? what's the CASM on those things because everything that I've ever seen has said that they are quit high.
how many CEO's/management teams does it take to run a branded airline's flying. southwest 1, continental 5 (CAL, Expressjet, Chautauqua, Colgan/Pinnicle, commute air), delta 5 (delta, asa, comair, expressjet, skywest) nwa 4 (nwa, pinnicle, mesaba, compass) and so one.
so how do they gain more effective pricing control?