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How airline merger might benefit Chicago

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usair-jpgHere's how US Airways President Scott Kirby says a proposed merger between his airline and American Airlines could benefit Chicago.

In a meeting of Kirby, US Airways Chairman and CEO Doug Parker and representatives of American unions with the Chicago Sun-Times Editorial Board Tuesday, Kirby said Chicago could gradually lose American as a major competitor with United and Delta because mergers have made those airlines significantly bigger.

An American-US Airways merger would create a third major competitor in Chicago, which in theory would lead to more competitive fares and better service, he said. As it is, American has been downsizing in Chicago by flying smaller and smaller airplanes, he said.

After merging with other airlines, United and Delta are "network" businesses that offer more connections than American, Kirby said.

"Just being a little bit bigger means you disproportionately benefit," he said. "When you fly from Chicago to Los Angeles, you can fly American or United. On American, they can connect customers to 30 destinations, but on United they can connect customers to 35 destinations. ... [That] puts eight to 10 customers on the plane that American simply cannot compete for, and you multiply that by 500 flights a day. ... In our business, that is the difference between being really profitable and losing a lot of money."

Also, customers like to fly with one airline to consolidate their frequent flier miles, he said.

Parker said a merger with US Airways would restore American's ability to compete for all customers.

"You can create a lot more value, and make a lot more profits, over a billion more dollars a year, than either of us can make independently," he said.

Tempe, Ariz.-based US Airways has been pushing a consolidation, and this week American's chief executive - after pooh-poohing the idea for months - said in a letter the airline is willing to consider a merger.

An American Airlines spokeswoman says American has a strong position in Chicago and intends to grow.

Read a July 11 Sun-Times story here.

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AA is already the second largest carrier at O'Hare. Delta is a distant third and has a ways to go to catch up. The US argument is moot and offers nothing to Chicago AA traffic except perhaps a political payoff to the powers that be! Besides, who really cares about US except to avoid them for their crappy service and surly flight attendants?

Less carriers and bigger airlines make fairs go down and service get better!? I guess that's fine for US Air because a merger with American means one less airline it will lose to.

Just get the merger done and get those Greed B------ out of Dallas.. TOHO and is Clowns have there time and now it is time to say BYE BYE !!

Get these GREED AH out of Dallas and lets get this merger over with ,,

All airlines have been saying mergers are better for customers for long time due to competitive airfare but it hasn't all it did was raise fares and fees on other amenities. So by merging US and AA where is the competition when they become one less competitive from the two separate airlines. And services hasn't gotten any better when all these airlines has merged when they told the Government it is going to have better services for the customers.

Remember when flying was a pleasant experience? Before deregulation, airlines made money and I don't recall that fares were unaffordable. Seats were comfortable,You could tilt back and nap. Or use the drop-down table. I once used it to revise a presentation with a portable typewriter. If an out-of-town client had to change a meeting, you simply phoned the airline and changed your reservation. Sometimes if a meeting ended earlier than expected, you could catch an earlier flight home. Food was served--not gourmet fare, but edible. No extra charges for any of this.

Since deregulation, one airline after another has gone broke or had to merge. Flying is now a miserable experience. I say bring back regulation. It could be good for the airline business as well as passengers.

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This page contains a single entry by Thomas Frisbie published on July 12, 2012 3:33 PM.

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