Much Ado About Airline Mergers …
… or, what keeps airport directors awake at night.
Just a few short months ago, U.S. airline industry analysts were confident that mergers were not in the immediate offing. In fact, it seemed the only airline exec talking mergers was United’s Glenn Tilton. Now, there’s a hostile bid by US Airways for Delta; United and Continental appear to be courting; and, AirTran has its eye on Midwest.
Generally lost in these discussions in the media is the potential impact on local communities and their airports. One scenario is that such mergers open up opportunities for low-fare carriers – bringing the ‘Southwest effect’ is an attractive lure for communities. Or, route duplications by merged carriers can mean less access for a community. And, in the worst-case scenario, a community can lose service altogether as the merged carriers restructure their routes.
Airports, most notably through the Airports Council International – North America, have been lobbying Washington for more financial freedom in how they operate their facilities. They would like to be able to react to local market forces, and to get a better handle on how their airports are built and maintained with more freedom with passenger facility charges, which have served as a catalyst for so many airport developments in the last 15 years.
In the December 18 Wall Street Journal, former American CEO Robert Crandall and Clifford Winston, both senior fellows with the Brookings Institution, suggest that a primary reason airlines merge is to tap international routes. They call for Congress to free up foreign investment in U.S. airlines and to allow foreign carriers to serve domestic U.S. markets, thereby encouraging competition. Instead, Congress appears poised to interfere with any merger discussions. Crandall and Winston also call for the privatization of U.S. airports “thereby allowing them to compete aggressively for air carrier service.” Most U.S. airport directors would agree with the concept of freeing up their ability to compete, but not with the proposal of outright privatization.
There are reasons that airports have moved aggressively in the past two decades to have greater control over their facilities. The number one reason is the uncertainty of the airline business. It’s why common use systems and short-term airline/airport agreements are in vogue.
Thanks for reading. jfi
NTSB Missed the Obvious.
The NTSB reported their analysis of the Comair accident in Lexington Kentucky that killed 49 people, and missed the obvious:
The runway was too short!
With all other factors remaining the same, a runway that met federal guidelines would have prevented Comair Flight 5191 from becoming a fatal accident.
For over ten years, the FAA has been trying to get local officials to extent Runway 26, federal runway guidelines indicate a 5600 foot runway is required, nearly twice as long as the 3500 feet, and more than adequate for the accident plane to have departed safely. Of course, the pilots erred in selecting the wrong runway, however, the NTSB should investigate all factors in the accident chain of events. Ignoring runway lenght ignores the responsibility to address the chronically short runways at many US airports, including Lexington and Chicago’s Midway airport where last year an airliner overran a snowy runway, then just 85 feet to the edge of airport property, and ended up in city traffic, killing an 8 year old boy.
Lexington’s Bluegrass Airport serves more than a million passengers on 6 different airlines, as well has military and general aviation, yet local interference to runway improvements prevents safe and efficient interstate commerce. AeroBlue.Org is organizing air travelers from all walks of life to ask Congress to protect travelers by granting Constitutional Interstate Commerce protection to airport improvements across the country.