Get ready for higher air ticket prices

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Get ready for higher air ticket prices:

Delta-Northwest deal could mean fewer cheap seats - Feb. 19, 2008

. . . or get ready to write letters to flood the regulators with opposition to this oligopoly-causing merger.

Oh, and as hard as it will be to find good cash prices, can you imagine how much harder it will be to actually use your ff miles?

[bnoble Senior Member Find all posts View Profile Close bnoble]

They barely compete now, what with combined FF programs, cross-airline perks, and a code-sharing agreement. This isn't improving matters, but it probably isn't the end of the world as we know it.

[SherryS Senior Member Find all posts View Profile Close SherryS]

Of course, my favorite airport (GRR)to fly into/from will be one of those "small/medium airports" most affected by this merger!

[Ryne08 Senior Member Find all posts View Profile Close Ryne08]

"Get ready for higher airline tickets", they are already up by 25% from last year prices

[bnoble Senior Member Find all posts View Profile Close bnoble]

Yes, well, oil is up sharply over the past year as well, so perhaps that's unsurprising.

Light Crude Oil (CL, NYMEX): Monthly Price Chart

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

At least most US carriers are honest enough to simply put the cost of oil into the fare where it belongs, insread of using the scam of most European Airlines of adding a ''fuel surcharge'' and trying to call it a tax, so that frequent flyers have to pay it. What's next a ''pilot surcharge'' if wages go up? Fuel is an essential part of their basic product, not an extra. Planes won't fly without it.

As to whether this merger will change ''the world as we know it'', it certainly won't mean that planes will not be flying or that airlines will go back to piston engine planes or anything that extreme. It will, however, impact prices and ff availibility far beyond these two airlines. CO is also reportedly in talks with AA and UA. What is likely to emerge is an oligopoly of three mega carriers and a significant decline in competition. The market will no longer operate like it does now to hold down fares or make airlines at least somewhat responsive to customers in their ff programs. Air travel will become a consumer unfreindly world.

While the legacies are seeking consolidation of the industry so they can reduce supply and drive up prices, they are shooting themselves in the foot in the long run, as these policies will drive expanded competition from the LCC sector, and probably make the legacy carriers dinosaurs in the next decade. These moves are certain to bring in the most succesful very low cost carrier in the world RyanAIr in a big way. Virgin America has already blazed the trail for a European carrier to get into the US domestic market, and RyanAir had already announced it was planning trans-Atlantic service and studying set up a US domestic carrier based on the highly succesful model it uses in Europe. While the level of cusromer service from a RyanAir is very low, so are its prices. It makes SW look high a high cost carrier. The merger mania is setting the stge for RyanAir to conquer the US market, while the US legacies fade into obliviion.

While it might no change ''the world as we know it'', this merger and the followup CO merger will set the stage for a substantial change in the airline industry, and one that will first bring significantly highe prices, followed by low prices but very low levels of service. The execs at LCC's, and especially at RyanAir must be chortling with glee over these developments at NW and DL, because they comprehend where that road leads in the long run.

These are not times to hoard ff miles. Mine are largely on NW and a lesser degree DL, and my psotion on miles these days is ''burn, baby, burn''.

[bnoble Senior Member Find all posts View Profile Close bnoble]

I'm with you on burning those NW miles. Not only that, but there's no longer any reason to keep airline credit cards etc.---I've gotten rid of most of my "extra" methods for earning NW miles, and rely now only on flights and a few other hotel/car partners whose internal programs are even worse.

But, in your scenario, (which I find plausble) competition does not go away; rather the LCCs fill in the void left by the legacies. They players differ, but the competitive landscape remains much the same, and perhaps even better for the price-conscious consumer.

As for consolidation enabling supply-side constrctions; they seem to be doing okay on that front without consolidation. Capacities are shrinking year-over-year, and load factors are quite high.

Will this merger raise flight costs? Yes, and perhaps dramatically so for folks in small airports now served only by these two. But, I still think oil dominates any anti-competitive effects in the broader market by this step.