Sunday, May 22, 2005

America West, US Air Merger

So America West (HP) and US Air (US) are set to merge? Doug Parker, CEO of HP, has been an advocate of market consolidation, but what this industry needs is contraction. There are simply so many seats in the air that to keep them filled, airlines cannot charge a high enough price to generate positive cash flow. The merger does not eliminate these seats, it only changes the name of the operator. Unless the new US Air creates a cost structure low enough to compete, the only thing the merger will accomplish will be the death of two airlines instead of one.


Blogger paulsepp said...

we want updates!

11:59 AM  
Blogger Sudiegirl said... that's what Paul Sepp looks like...

Anyway, I don't have much airline experience, but do you think that the merger will do anything to improve the customer service on either airline? For other types of airlines, it's usually "no".


1:38 PM  
Anonymous Rob said...

Update you page sucka fool... and enjoy you new work schedule!

8:32 AM  
Blogger hulbstar said...

You're right, the service of both will probably not improve. One way this merger will be made to work is by cutting costs. US Airways has a very high employee cost structure. The employees will probably take significant pay cuts and lose benefits. Expect a moral nose dive and this, "Why do I care about your bag lady, my job sucks!"

8:31 PM  

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