Airline mergers are among the major technological shifts and trends occurring in the travel industry. For example, in 2020, American Airlines and US Airways merged to create the world's largest airline. This highly visible merger reflected a larger trend of airline consolidation resulting from deregulation and increased competition in the global marketplace. In some respects, mergers can lead to increased efficiency and improved customer service, while in other ways such consolidations can have serious negative impacts on air travelers.
To begin with, airline mergers offer many potential benefits to travelers, such as improved efficiency, better customer service, and more cost savings. A merger of two major airlines will create an integrated network and more options for travelers, allowing them to choice from a wider range of routes and destinations. Mergers also allow airlines to share resources and pool their fleets of aircraft, reducing capital costs and increasing efficiency. This may translate into more stability for the airline, and result in reduced airfares as well as more attractive loyalty programs for customers. The larger airline will also be able to use its increased market power to become a more effective negotiator with airports and other suppliers, leading to even greater cost savings.
On the downside, airline mergers can lead to significant decreases in service quality, job losses, and within antitrust laws, oligopolistic market structure. In the case of two large airlines combining, individuals may see a loss of route choices or even see routes completely eliminated. In addition, the announcement of a merger can cause significant drops in the stock prices of both airlines, leading to significant job losses and wage cuts for employees. Additionally, with the merged airline now occupying the majority of the market share, smaller airlines may be unable to compete and customers may be left with limited choices in terms of pricing and services.
Another key issue to consider when it comes to airline mergers is their impact on air travelers' rights. When a merger is completed, the new parent airline will likely have policies that differ from those of either of the original companies. In particular, travelers should keep an eye out for customer service policies and regulations, changes in Frequent Flyer programs, and changes in policies related to contracts, refunds, and other policies.
There are ways to prepare for the changing landscape of the industry as it pertains to airline mergers. For example, travelers should be aware of the potential routes and services that may be impacted due to the merger. Additionally, travelers should look for discounts and new loyalty programs offered by the newly merged firm. Additionally, travelers should keep informed of upcoming labor changes, regulations and other policy changes. Last but not least, travelers should monitor their Frequent Flyer programs, benefits, and other loyalty programs to ensure they continue to get the best value out of their tickets.
In conclusion, airline mergers are a major force in the travel industry and they will continue to shape the market for years to come. Although there are potential positives from airline mergers such as increased efficiency and cost savings, there are also many potential negatives such as fewer route options and decreased customer service. It is important for travelers to remain informed about the changes to the marketplace and adjust their travel plans accordingly to get the most out of the experience.
