America’s
third largest airline, American Airlines is merging with US Airways, which is
the nation’s fourth largest airline. Their aim is to create a bigger carrier in
the U.S. While this news might be great for both the airlines and those who
have some sort of a financial stake in the business, it is not so great for the
customers.
American
Airlines filed for bankruptcy in late 2011. By this merger, the competition
between the airlines is dead. This means, there are fewer flights and higher
priced tickets for you and me. These airlines could have stayed in competition,
continued to discount one and another into bankruptcy but they decided to join
forces instead. This article tells that with each passing day, air travel is
losing market share.
Unprofitable
routes and flights have been reduced. The flight connections available have
become less. Flying has becoming expensive and stats show that there are fewer
people flying and more people choosing bus services and the Amtrak to travel
between states. Overall, the flights have become fewer and generally a lot more
expensive.
Who knew the
plane seat will turn into a perishable good one day?
http://www.thedailybeast.com/articles/2013/02/14/airline-industry-fine-don-t-fly-with-us.html
3 comments:
I find it interesting that two firms this size are allowed to merge together. I can see the downside of less flights available but I am hoping that they can pool their resources and take the best employees and in response a more efficient carrier whos prices are still competitive. In regards to the Amtrak comment, I would like to continue to see an increase in the popularity of the train and maybe even more options to make it more readily available and convenient for us.
I do not believe it is fair for the third and fourth largest airlines to merge. By merging, I believe they can utilize their pooled resources to charge lower prices for tickets to vastly increase their market share and basically put other airlines out of business. This would need to be monitored heavily by either regulation agencies or government agencies, because if this occurs, this merged airline could then charge ridiculous prices. I believe the increase in bus and Amtrak is simply due to consumer fear as the economy is still recovering. They would sacrifice time rather than money. I think as the economy is slowly recovers, we will see a trend toward going back to flying for traveling.
I think the merger is very necessary for the airline industry today. Airline companies have been struggling since the start of the recession when many other airline companies were facing bankruptcy and mergers with other companies. While American airlines CEO Doug Parker claims that this is the best move for consumers, it is clearly a move that is motivated by a need to keep profits high, while pretending to worry about customers. In fact many people have moved away from flying with airlines and like Jacob said have began using alternatives like buses and trains because of the hassle involved with flying. The airline industry has changed drastically since its earlier days where they emphasized customer satisfaction and an enjoyable experience. Nowadays they are more worried about fitting as many people on the plane as possible to maximize profits and efficiency.
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