Airline mergers could frazzle fliers

RDU passengers may be left with fewer choices if airlines combine to lower their costs

Higher fares. Fewer flights. More crowded planes.

In the short term, air travel would become more expensive and less enjoyable as the nation's largest airlines plot mergers to help their balance sheets. But airline analysts say the long-term health of the industry is at stake as financially troubled carriers face soaring fuel costs.

"The airlines are eliminating competition and helping sustain themselves, but the general public, I don't see where they get a lot of benefit out of it," said Eddie Albertson, vice president for sales and marketing of Travel Management Partners in Raleigh, one of the nation's largest travel agencies.

A combination of Delta and Northwest, United and Continental or American and Continental is still in the talking stage. But any merger is likely to hurt passengers at Raleigh-Durham International Airport, where the carriers offer 137 daily departures -- 61 percent of the regional airport's flight schedule.

Merged carriers almost certainly will reduce the number of seats or flights available for some destinations as they try to boost profits, especially after oil topped $100 a barrel this week, experts said. Airlines can jack up fares, which rose throughout 2007, even higher if fewer seats are available and there is less competition.

"The whole point of reducing capacity is not just to keep airplanes full but to squeeze out the cheap seats," said David Field, Americas editor of London-based Airline Business Magazine. "The harder it is to get a seat on a plane, the higher prices will go."

Passengers already were scrambling to find empty seats on some flights. Airlines had near-record numbers of passengers in 2007, and ridership during the traditionally slow travel month of January remained high. Delta said its planes were 75 percent full in January; American's planes were 77 percent full.

"The airlines' argument is that ... [mergers] would benefit consumers, because it will make strong carriers that will not fail," said Travel Weekly writer Andrew Compart. "But it's difficult for the airlines to argue it would be entirely pro-consumer, because part of the point of a merger is that airlines can take capacity out of the system and close some hubs."

Any hub closings could limit Triangle travelers' options. Though there is almost no overlap on the 29 RDU nonstop destinations by the merger candidates, hundreds of connections from hub airports are at risk.

For example, in a Delta-Northwest merger, it's unlikely that Northwest's hub at Memphis or Delta's hub in Cincinnati would both be needed by the combined airline. Northwest offers three daily nonstops to Memphis from RDU and Delta has five to Cincinnati.

But once at Memphis, passengers can connect to 87 Northwest destinations, including Toronto, Chicago and Dayton, Ohio, as well as international cities including Amsterdam; Montego Bay, Jamaica and Cancun, Mexico.

From Cincinnati, passengers can connect to more than 400 daily departures to 112 destinations including Rome, Frankfurt, Paris and London-Gatwick.

"If Cincinnati goes away as a Delta hub, Delta won't be flying nonstop from RDU to Cincinnati," Albertson said. Ditto for Northwest flights to Memphis from RDU.

What about the hubs?

Nobody knows how many flights might be cut, but Albertson said hub closures would be difficult for airline executives to avoid. Before Piedmont Airlines of Winston-Salem and US Airways merged in 1989, Piedmont had hubs in Dayton, Ohio, Baltimore and Charlotte. U.S. Airways had hubs in Pittsburgh and Philadelphia. Of those, the only remaining hubs today are in Charlotte and Philadelphia.

"When you have all these hubs close together you are basically competing against yourself for the same connecting traffic," said Albertson, who was district sales manager for US Airways for 18 years before joining Travel Management Partners.

Michael Morstein, director of passenger services for Intervistas Consulting, a Washington transportation consulting firm, said Continental's hub in Cleveland might not be needed if the carrier merges with United. United's hubs at Chicago O'Hare and Washington Dulles and Continental's Newark hub could be adequate, he said.

Shutting down the Cleveland hub could mean that RDU loses some of its four daily round trips there and connections to the 240 daily departures that Continental offers from the Ohio airport.

Or maybe not.

Flight cancellations might create opportunities for low-fare carriers, which have avoided airports traditionally dominated by legacy carriers. Southwest, AirTran, JetBlue or startup Skybus might rush to pick up routes dropped by the other airlines.

"You would lose service to Cleveland, but it may convince some airline like Southwest to go nonstop to Cleveland," Morstein said. "If Memphis goes away, it's very possible Southwest may decide to go to Memphis."

"You have an industry that's lost more than $30 billion since 9/11 and the price of oil is ... [about] $100 a barrel -- to expect fares to remain unchanged is unrealistic," he said. "But in any given market, we don't know what the competitors' response will be."