Comments on: Delta/United Merger: Good Luck with That http://www.onlinetravelreview.com/2007/11/15/deltaunited-merger-good-luck-with-that/ Airline News and Commentary Sat, 10 Jan 2009 01:14:26 +0000 http://wordpress.org/?v=2.6.5 By: iahphx http://www.onlinetravelreview.com/2007/11/15/deltaunited-merger-good-luck-with-that/#comment-5129 iahphx Thu, 15 Nov 2007 14:47:14 +0000 http://boardingarea.com/blogs/onlinetravelreview/2007/11/15/deltaunited-merger-good-luck-with-that/#comment-5129 I would submit that the US Air/America West merger tells us a lot about labor issues that arise during a merger, but not that much about operational issues. There certainly were some computer related problems in integrating rez systems, but the problems were fairly short-lived and probably avoidable with more staff and higher competence. I think their poor operational performance earlier this year had much more to do with "taking their eye off the ball" than merger integration. Moreover, the ops problems (for the moment at least) seem to be in the past tense, as the airline's on time performance continuies to dramatically improve -- at almost 90% this month last I looked (good news doesn't make news). The labor issues are obviously more intractable, as the US Air situation certainly shows the continued ability of airline labor unions to be self-destructive. One potential way around some of these problems is to not actually merge, at least for awhile. Run the airlines semi-independently. Many businesses have different "brands," and I see no reason why airlines couldn't. The extra profits would largely be achieved through right-sizing the combined operation, and extra efficiencies in transferring passengers. I'd personally be in no rush to try to actually combine any of the large legacy carriers. I would submit that the US Air/America West merger tells us a lot about labor issues that arise during a merger, but not that much about operational issues. There certainly were some computer related problems in integrating rez systems, but the problems were fairly short-lived and probably avoidable with more staff and higher competence. I think their poor operational performance earlier this year had much more to do with “taking their eye off the ball” than merger integration. Moreover, the ops problems (for the moment at least) seem to be in the past tense, as the airline’s on time performance continuies to dramatically improve — at almost 90% this month last I looked (good news doesn’t make news).

The labor issues are obviously more intractable, as the US Air situation certainly shows the continued ability of airline labor unions to be self-destructive.

One potential way around some of these problems is to not actually merge, at least for awhile. Run the airlines semi-independently. Many businesses have different “brands,” and I see no reason why airlines couldn’t. The extra profits would largely be achieved through right-sizing the combined operation, and extra efficiencies in transferring passengers. I’d personally be in no rush to try to actually combine any of the large legacy carriers.

]]>