Merger Means Higher Airfare For Leisure Travelers
Planning a trip to the theme parks?
Feb. 25, 2013— -- Planning a trip to the theme park mecca of Orlando? Might want to get there sooner rather than later. The latest mega-merger between American Airlines and US Airways - the fourth such union in as many years - could put a crimp in your plans.
Maybe not right away, but I can see it coming. Forget all that stuff you've heard about "no non-stop route overlap" between the two airlines. Both have flights to the same destinations, especially smaller cities, anything outside big airport hubs like Chicago, Dallas, Los Angeles, New York and more.
I can even see the merged airline downsizing some hubs because of these cities' proximity to even busier airports. All told, this is not great news for travelers since we will likely see fewer flight frequencies and less competition to places like Orlando which, outside of a tepid economy, usually means more expensive flights. Let's jump ahead a couple of years to take a look at air travel in 2015. It's an interesting picture, and not always pretty.
For more travelnews and insights view Rick's blog at farecompare.com
Just so you know, both US Airways and American employ the hub-and-spoke model for their routes, and these hubs don't overlap: American has Chicago, Dallas, Los Angeles, Miami and New York, while US Airways concentrates on Charlotte, Philadelphia and Phoenix with Washington, D.C. as a focus city. But note how the regions of these hubs overlap in the Northeast and out West. Would it surprise me to see Philly and Phoenix get trimmed back in the next couple of years? No it would not.
Something else to consider: both airlines currently compete on routes in about 100 cities, via different connections. That works out to about 4,900 routes that will soon have one less airline competing for your business. This gives airlines more pricing power and that means, open up those wallets!
Plus, it makes airfare hikes easier. Last year we saw 15 distinct hike attempts, and seven were successful. As for the other eight, one or more airlines said "no" so the initiating carrier had to rollback prices. With one less airline to cast a veto, what do you think will happen? Exactly. Open up those wallets - again.
I have to chuckle when so-called experts say, "Don't worry, the discount carriers will help keep prices in line." I'd like to ask them if they've checked out some of the fares on JetBlue lately. No, I'm not sticking it to JetBlue - I could say this about all the discount airlines - but over the weekend, I checked for a round-trip flight from L.A. to New York (Mar. 17-24) and the best deal was $566 roundtrip. If that's considered cheap I'll eat my tray table.
One bright spot is Allegiant Airlines which services about the same number of cities to Orlando (43) as Southwest does (not counting AirTran). There are a couple of catches, however: Allegiant doesn't fly to Orlando International (MCO) but to Orlando's Sanford Airport (SFB) which is further away from Orlando (26 miles vs. 6), plus its flights only originate from smaller airports that typically have little or no competition.
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