Many have called the hostile $8 billion dollar takeover bid by US Airways for Delta Air Lines as too low, unwanted, or even zealously ambitious. I, however, see it in a different light. This is going to be good for a lot of people. And when I say a lot of people I just don’t mean the creditors at Delta that stand to gain a lot at this point compared to what they could or couldn’t get when Delta comes out of bankruptcy protection sometime mid 2007, but I mean that passengers will see a better system, better product and better services.
The first complaints to always come from these types of mergers/ consolidations are ticket prices.
First, What will happen to ticket prices? Will they shoot through the roof? That is a very fair concern. Airways said that prices would not rise after they were bought out by America West several years ago, and they raised prices. However they quickly slashed prices because passengers were abandoning the new airline. Raising prices turned around bit US Airways. If you take a look at their reasons for offering the bid to Delta Air Lines, US Airways quotes prices for tickets and how much they have fallen since the two airlines (America West and US Air) merged.
Few Examples:
Atlanta, GA to Cincinnati, KY Previous Fare $399 New Fare $218 Savings 45%
(A dominate Delta Air Lines Route)
Cleveland, OH to Minneapolis Previous Fare $328 New Fare $198 Savings 40%
(A flight from a tough Northwest Airlines hub)
Dallas/Ft. Worth to Ft. Lauderdale, FL Previous Fare $432 New Fare $128 Savings 70%
(A flight from the world’s largest carrier’s mega hub, American Airlines)
So it is hard to say that prices will automatically jump because the two airlines would merge operations. Now as for that fact that if the new airline comes about that the “New Delta” would be carrying roughly 1 out of every 4 passengers in the , it could be said that federal regulators might have something to say about that. Airways has said that they are willing to sell off their northeast shuttle routes in order to keep this bid alive. There might be cause for some concern as the “New Delta” would have such a death grip on the southeast with major hubs in Atlanta and Charlotte right now. But take into account that Northwest Airlines has an ultra tight grip on the northern plains and upper Midwest right now. Minneapolis and Detroit are huge hubs for NWA and they fly into cities now with just single services provided by that particular airline. Prices in those cities have remained fairly reasonable due in part to government and local authority’s negotiations with the airline.
Second, US Airways has said that they will cut services by 10% when they merge both companies, what will that mean to the amount of seats out there? Will there be a shortage of seats?. Well that’s true. But, airlines have been cutting services for the last 2+ years and it’s because there were way too many seats out there for the amount of people that were flying. The airline industry is different because it lags in certain sectors and then is preemptive in other sectors. Seating, profits, services all tend to lag. So when they are pulling more and more seats because they are loosing billions of dollars, it makes sense. But some see that the planes are fuller and fuller and they keep taking seats out of the system. It’s that lagging effect. It doesn’t mean that on popular routes the seats will decrease it just means that where Delta and US Airways compete directly and the planes aren’t flying full (ish) they will pull a plane out of that route.
Third, If I live in a city where only US Airways and Delta Air Lines compete, what will happen to my prices? It’s hard to say, but don’t look for your city to have single services for long if there was enough to support both US Airways and Delta before. Look for American, Continental, Northwest, United or any other carrier to come in if the demand is high enough. Your city will not have a single air carrier if there is enough demand.
Finally, passengers are going to get a lot more destinations if they were in either system. Delta has been expanding to Europe like crazy. Caribbean. A southwestern link could improve services for Delta customers and a European connection could help US Airways customers too. Airways has a lot of services to the
I’ll talk about how it could hurt passengers on the next entry.
First, What will happen to ticket prices? Will they shoot through the roof? That is a very fair concern. 
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