They Merge, We Lose
AA-US Airways Merger A Bad Deal For Customers
Tuesday February 12, 2013
Air travelers will end up losing in a deal that would create the largest airline in the U.S., according to consumer advocates interviewed by the Huffington Post last week.
Frequent flyers should be wary of the developments, according to Paul Hudson, Executive Director of FlyersRights. The deal “is unlikely to be good for consumers.”
“It will likely increase airfares, reduce consumer choice and increase overcrowding on aircraft, and result in job losses at both airlines — but especially for US Airways,” Hudson said, adding that he fears “abandonment or downgrading of some hubs like Phoenix.”
Having such a large market share gives firms incentives to offer uncompetitive prices, consumer advocates agreed. “The danger in such concentration is also that airlines, like big banks, will become too big to fail,” said Hudson.
Diana Moss, vice president at the consumer advocacy group American Antitrust Institute, said any deal could lead to higher ticket prices “by limiting the power of low-cost carriers to discipline fares.”
Moss said the move is “yet another legacy merger in an increasingly concentrated oligopoly business where you just have a few firms.” Medium and small communities in the Midwest may see service cuts due to decreased competition along those routes, she said.
Mark Cooper, director of research at the Consumer Federation of America, was even more pessimistic than his peer consumer advocates. “In the airline industry, the problem is not just the mergers anymore,” he said. “The market structure that has emerged doesn’t support enough competition to limit consumer harm.” CEO Rick Seany said, “bottom line is you’re going to be flying on newer aircraft with this new merger, and you’re going to be paying more for your airfare tickets; your loyalty miles will be worth more in the short term, and less in the long run.”
America’s skies will be dominated by three full-service carriers plus a fourth, Southwest, that began life as a low-cost airline but has come to resemble its traditional rivals. Between them they will have about four-fifths of the domestic market.
The merger would create the largest U.S. airline by revenue, and it has been encouraged by creditors and employees in both airlines as a positive step.
This sounds wonderful for investors; less so for passengers. Domestic air fares have started rising, after having fallen by about a third in real terms from 2000-09.
The industry’s increasing concentration will make it easier for price increases to stick. The airlines’ improved discipline on capacity means flights sell out more often-bad news for late bookers.

And then there are the issues of comfort and reliability. Skytrax, gives just three stars out of five to America’s major airlines, putting them on par with Papua New Guinea’s national airline, Air Niugini.
In the short term a merger may make things worse: as shown by United’s recent computer failures and other glitches as it integrates Continental, airline mergers can inflict years of misery on passengers.
Given the volume of travelers’ moans, there ought to be a market in providing a b
etter service at a slightly higher price. But Virgin America is seeking to do just that, and is still losing money, five years after its inception. So travellers may find that the golden age of airline profits will be a dark age of pricey tickets and poor service.

Read more: Squeezing Frequent Fliers Is a Likely Merger Outcome – NYT.

Read more: The last great American airline merger – Economist.

F.A.A. Blamed for 787 Battery Risk
Boeing Certification Process ‘Must Be Reconsidered’
The nation’s top transportation safety official said last Thursday that the Federal Aviation Administration accepted test results from Boeing in 2007 that failed to properly assess the risks of smoke or fire from the batteries on Boeing’s new 787 jets.
The F.A.A. has been reviewing its own certification process and the battery tests it oversaw in 2007. It is also looking at other systems on the 787 to see if they were properly approved.
Last week, the F.A.A. said it would allow Boeing to conduct test flights with its 787 to collect data on the batteries and the plane’s electrical system.
But unless investigators can determine what caused the first cell to short-circuit, Boeing will be required to make other changes to prevent any of the possible causes and to better contain or vent any overheated materials. And given the safety board’s findings about how poorly Boeing gauged the original safety risks, the F.A.A. is likely to take its time in
assessing the validity of any new tests.


Southwest Airlines Introduces $40 Fee 
You Pay For The Honor Of Early Boarding
It used to be, flying on Southwest felt kind of like a democracy. Everyone was treated equally and boarding was determined by your assigned spot in the line.
But the airline seems to be following the ancillary fees trend with its new $40 charge that gives passengers a prime spot in the boarding line.
Already customers can pay $10 for Southwest’s Early Bird Check-In, which bumps up your position in boarding process, but this new fee is an outright guarantee that you’ll be one of the first 15 people in line.
For those interested, you can purchase the $40 spots at the gate up to 45 minutes before boarding if there’s space available, reports the Los Angeles Times.
Outrage of the Week!
Allegiant Air passengers upset after being left on McGhee Tyson tarmac for 3 hours.
Passengers on an Allegiant Air flight to Lexington, Ky. want answers after their plane was diverted to Knoxville. On January 31The passengers were kept on the plane on the tarmac for three hours with conflicting answers.  
“They turned around and re-routed us to Knoxville,” said Doug Yazell. “We landed, sat on the tarmac for three hours, and about every 25-30 minutes they were waiting for a weather report, fuel, we would be taking off shortly, that sort of thing.”  The unhappy passengers say they were left on the plane from 9 p.m. to midnight without any food and were given little water.

The passengers were finally allowed to get off the plane and go in to the airport, but were unable to get their bags or any information on the situation for another hour.

Eventually passengers were put up in a hotel and told to book new flights Friday morning. The passengers were given hotel vouchers, but had to find their own way there.

Allegiant Air manager told 6 News the problem was a weather issue.

Applause of the Week!
United Air Lines was fined $130,000 Monday by the DOT for violating federal rules last May by not informing passengers delayed at Chicago’s O’Hare International Airport that
 they had an opportunity to leave the plane as it sat at the gate with the door open.
United violated a provision backed by FlyersRights, the airline consumer protection rule, which took effect in August 2011 requiring that passengers on a delayed flight have the opportunity to leave the aircraft, and that the carrier must inform them that they can deplane.
Announcements that passengers can leave the plane must be made 30 minutes after the scheduled departure time and every 30 minutes afterward.
United Flight 881 was scheduled to fly from O’Hare to Tokyo’s Narita International Airport on May 7, 2012. The aircraft was pushed back at 12:38 p.m. but return
ed to a gate at 2:25 for maintenance, at which time the doors were opened. However, United failed to make an announcement notifying passengers of that opportunity to leave the plane as required by DOT’s rules. The aircraft doors were closed again at 3:10, but because of another mechanical problem the flight was canceled and passengers deplaned at 5:22 p.m. Three passengers on board the flight filed complaints with the Department’s Aviation Consumer Protection Division regarding this delay.
The consent order is available at, docket DOT-OST-2013-0004.

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