The Truth About Airline Mergers
The same is true with airlines, and recent history should give you some indication of how this may play out with Continental and United.
Learn more about previous airline mergers at PeterGreenberg.com.
The fact is, every airline executive will tell you that in order to survive, they have to shrink the airlines. So while the merged United-Continental may officially become the largest airline in the world, how long will that last? Long enough for the new, combined airline to start getting smaller.
The major U.S. airlines have already permanently parked 1,000 planes in New Mexico, Arizona and California during the past two years, which is the equivalent of taking one major airline completely out of business. That's huge!
This summer, we'll see about 23 percent fewer seats available, and no matter what happens to fuel prices, airfare is going up and services will be slashed. If you're in a small community like Bozeman, Montana, or Grand Rapids, Michigan, that is dependent on air service from United and Continental, do you think you'll have eight flights a day? No—you'll have about four.
As for those 10 hubs between the two airlines? That number is also likely to shrink.