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The “Good” and “Bad” of Airline Mergers

airline mergersDid you ever wonder if consumers benefit from airline mergers? According to Bill McGee, travel and aviation consultant for Consumers Union, the policy arm of Consumer Reports, “there are good and bad effects of airline consolidation.” McGee presented his thoughts at a DOT Advisory Committee for Consumer Protections meeting, which focused on the use of cell phones for voice calls in the air, the impact of government-imposed taxes and fees, and the effects of consolidation on consumer travelers.

The event was attended by Charles Leocha, Chairman and co-founder of Travelers Unitedan organization working to improve travel for consumers. Leocha posted his notes from McGee’s remarks on his website. Here were some of his “takeaways”:

1. Fares are increasing.

The Good: Fares have increased, as fuel costs have been plummeting. Consolidation is just about as good as printing money for the airlines, as they can keep raising prices even when reporting record profits.

The Bad: Consumers have to pay these higher fares.

2. Fuller cabins.

The Good: Airlines are squeezing more profits out of their aircraft by filling their aircraft more. A decade ago the average load factor on domestic flights was around 65-70 percent. Today, the load factor is in the mid-80 percent.

The Bad: Finding an empty middle seat is now almost impossible. More passengers are using the same lavatories and more passengers are crowding airports.

3. More seats are being squeezed into airplanes.

The Good: Not only are planes flying with higher loads, but they now have more seats too.

The Bad: Consumers are faced with less legroom and less comfort.