Is There a Silver Lining in Airline Mergers?

May 7, 2008 — -- Sick of terrible travel news? It's not like there's a shortage of it, what with airlines going bust, fuel costs going crazy and passengers going nuts over all the extras they now must pay for.

In fact, a colleague recently bragged to me about how absolutely triumphant she felt simply because she didn't have to pay extra for her aisle seat. My, how times have changed.

But I say enough already. Enough with the doom and gloom. Things aren't all that bad.

For instance, did you know the very first commercial airfare for a trip taken back in 1914 cost $175? A little high, huh? Well, when you adjust for inflation, that airfare would cost you more than $3,600 in today's money. And considering that this inaugural flight only lasted 23 minutes (from St. Petersburg, Fla. to Tampa, Fla.) today's airline tickets are relative bargains.

Yes, there is some good news, and I say we must look on the bright side. So now, with tongue firmly adhered to my cheek, I present the "Top Five List of Airline Merger Silver Linings." But please note: some of these are serious.

#1 — Mergers: Good for Air Traffic Control

Think about it: we're already in the midst of record-breaking cuts in capacity (and by capacity, I mean the total number of seats for passengers), plus there are mergers afoot (Delta/Northwest and a possible United/US Airways get-together). These mergers will spur even deeper capacity cuts. Deeper cuts mean fewer flights on fewer routes.

Let's face it, prices are going up, prices for food, prices for gas, prices for everything, including airline tickets. And it's all being driven by higher fuel costs.

That's the bad news; the good news is: fewer planes in the air will no doubt ease some of the massive stress on the nation's air traffic control system.

The heavy summer travel season is coming up and all those way-too-busy air traffic controllers might actually get a bit of a breather. And you better believe they'd love that; remember last summer, when nearly 30 percent of flights were delayed or cancelled?

I'll never forget it (oh, those endless hours in LaGuardia). And, who knows? Mergers might actually provide years of breathing room, so that maybe — just maybe — the government will get going on some of those long-talked-about (and little-done-about) air traffic control improvements we keep hearing about. Maybe.

#2 — Mergers: Better Than Bankruptcy

We've seen too many airlines go bust this year (Aloha, ATA, Skybus, and more); in some cases, passengers have been stuck with tickets they bought and paid for and will never be able to use. It's also meant a loss of jobs, always a horrible prospect (particularly when there's no notice).

Now, just imagine if two legacy carriers were to go belly-up; we could be looking at a loss of 20 to 25 percent of the nation's domestic traffic, and that would mean prices and inconvenience would go through the roof. We can no longer count on the lower cost airlines coming in to save us by scooping up all those abandoned routes anymore; they have troubles of their own (the soaring fuel prices strike again).

Far better to merge than watch the big boys go bust, leaving many of us stranded with a bagful of useless frequent flyer miles.

#3 — Mergers: Fewer Jerks on the Planes

You know, if oil hits $150 to $180 a barrel (and yes, this could happen), we might see the price of airfares double. Hard to believe, but there's a silver lining there, too. Airlines will probably have trouble filling their seats at those prices, so airlines will be forced to lure us back with (gasp) those long gone amenities we used to know and love. They'll start treating us right again and compete on customer service.

And you know something? When people are no longer treated like cattle, they stop behaving like cattle (okay, like jerks). Just imagine what it would be like to fly without some jerk behind you who thinks nothing of banging his or her feet against the back of your seat, or not having to wrestle your neighbor for one of the arm rests.

Fewer jerks on the plane. I like it.

#4 — Mergers: Less Bags to Lose

Call me an optimist, but I see this as a no brainer: fewer airlines plus fewer flights equals fewer lost bags.

To be fair, I must point out that the rate of "mishandled" baggage (on carriers reporting delays in their flights) has actually been improving fractionally: in February of this year, the rate of mishandled baggage in the U.S. was 6.39 reports of lost bags per 1,000 passengers.

But horror stories abound; some poor fellow passed away on a flight to Heathrow. His family came to collect him. Unfortunately, they could not collect his bags, as they were lost.

Such stories may just disappear, though: imagine the lost bag rate going down to zero. Well, that won't happen, but it will improve. Just do the math: fewer planes means there are simply fewer opportunities to lose stuff — like baggage.

#5 — Mergers: More Frequent Flier Miles

Many of us are not overly loyal to that one airline anymore — we have miles on multiple airlines. Say you have 20,000 frequent flier miles on Airline A, and you have 30,000 frequent flier miles on Airline B; when Airlines A and B merge, in theory you'll have 50,000 miles combined.

Not only that, but when two carriers merge, that means more destinations for you to use your miles on, and more opportunities in general to redeem miles to more destinations that actually have available award seats.

Bottom line: with oil heading to $150 a barrel, mergers and expensive airline tickets will become a fact of life. We can rant and rave, or we can deal with it. And look for those silver linings.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Rick Seaney is one of the country's leading experts on airfare, giving interviews and analysis to news organizations, including ABC News, The New York Times, The Wall Street Journal, Reuters, The Associated Press and Bloomberg. His Web site FareCompare.com offers consumers free, new-generation software combined with expert insider tips to find the best airline ticket deal.