Created on: February 13, 2013
Look back over the past two decades and there are numerous examples of businesses that have felt the sting of tough economic times. Farmers have seen their profit margins disappear like dust in the wind. Perhaps no industry has taken a beating worse than that of the airlines. Year after year, airlines have gone bankrupt and been forced to merge or disappear. Recent headlines suggest the trend still goes on today as American Airlines and US Airways are preparing to
A merger of these two giants of the airline industry would form the biggest air carrier in the United States. Thinking back to the 70s, passengers had their choice of dozens of airlines to fly and could do so to most small destinations nationwide. Turn the clock forward to 2013 and the herd has shrunken immensely. There are a few bargain budgets groups like JetBlue still around, but the big boys have been brought down to United, Delta, and now this new combo, which seems destined to end up as American Airlines.
The question most travelers will ask is what impact a merger of this magnitude will have on the airline industry. As a whole, the future of airlines will probably see a bit of stability for a change, at least for awhile. With all of the different airlines that have joined together in the past decade, there is simply no other leading carriers left to spur another round of mergers. United and Delta, which American would pass with their merger, went this same route to rise to the top of the flying food chain. Now, the other shoe drops on them.
This merger should continue to also make the airlines more profitable in the long run. Small carriers have gone the way of the dinosaur, simply because rising business costs made it impossible for them to survive. Heck, even the big carriers have had to look into joining forces because prices of things like fuel were skyrocketing with no end in sight. With this final merger, there should finally be some complete stability in the skies. For American Airlines, it opens up other routes in the Western part of the country that they did not have a presence in, plus also opens up more territory for them on the international front.
In terms of passengers, one has to think that they are the group that will suffer in this final round of reshuffling. Air travelers made out like bandits during the time of the air fare wars, when a variety of carriers battled for a lion's share of the market. As time has gone by, mergers have sapped the industry of many competitors, putting the airlines in the drivers seat. The big boys can now take advantage of things, charging high ticket prices and bag fees, because that they go places that some discounters cannot go. It will be intriguing to see how the consumer makes out now, but one would think this will only be good for the airlines in the long run.
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