John Stancavage: Airline merger could improve service
BY JOHN STANCAVAGE World Business Editor
Sunday, February 17, 2013
2/17/13 at 7:31 AM
I was moderating a panel discussion on the state's aerospace industry last week for Leadership Tulsa when one of the participants began waxing nostalgic about the golden days of commercial aviation.
Decades ago, the person remembered, flying was something people looked forward to. Airplanes were comfortable, plated meals were served and flight crews worked hard to please even coach travelers.
But deregulation and the 9/11-driven downturn changed flights into something resembling a cattle drive. Last summer may have been the nadir of the trend, with labor-management issues at bankrupt American Airlines spilling over into delays, cancellations and some cranky employees.
So a big question to come out of last week's announcement of a merger between American and US Airways is whether more stability and profitability in the industry will lead to a better customer experience.
In the hyper-competitive 1980s, there were 10 major players in the market. If the AA-US Airways deal is approved, four companies will control 83 percent of the domestic market. (The others are Delta, United and Southwest.)
Analysts seem divided on whether that consolidation will push up air fares significantly. US Airways CEO Doug Parker swore it wouldn't at a press conference last week, but that's what you'd expect from someone who still needs government approval for his deal.
There likely will be fewer fare wars, however, which could mean one or more of the airlines may seek to distinguish itself through superior service.
Airline analyst Bob Herbst doesn't think we'll see a return to the days of coat-and-tie travel, but he does predict improvement.
"There's also going to be pressure from foreign carriers like British Airways, which offer a superior product," Herbst, owner of airlinefinancials.com, told me in a phone interview.
American could be the airline that separates itself from the pack, he said.
"This is a great opportunity for Parker," Herbst said. "The key is that he has to get labor involved in this effort. If he tries to do it by just giving orders from headquarters, it won't work."
Original Print Headline: Merger could better air service