Site Admin

Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

This is really getting crazy. First you have DL and NW attempting a merger. I say attempting because it hasn't been approved yet and I hope it stays that way. There were talks between CO and UA and fortunately CO got smart and pulled out of the talks. Now it looks like UA and US are back at it again. This is insanity and completely unnecessary. Here is the point that people need to understand. Taking two bad business models and combining them into one doesn't magically make it a good business model. I don't care how but of a pile of crap you assemble it will still smell like a turd. Adding more dung to the pile won't make it smell like roses.

If I were running an airline the last airline I would want to merge with would be UA. They have spent an incredible amount of time in bankruptcy. I don't think they can be fixed. I think they are too big to merge with someone safely without great risk of bringing both companies down. Is there too much capacity? Let this company die. I honestly think UA is a lost cause. Forget mergers. Survival of the fittest. You don't see Southwest scrambling to find someone to merge with. They are a solid business with a GOOD business plan.

Fuel is the biggest cost these days. So do things to reduce fuel consumption. How do you do that? Eliminate the hub and spoke system. When you connect a passenger you are flying him/her more miles than you would on a point to point route. Hubs are also notorious for delays and long taxi times. All this spells increased fuel consumption. The #1 airline financially (Southwest) doesn't operate a hub & spoke system. Fuel consumption per passenger will be greatly reduced. They don't even have the best loads in the industry. They just don't waste time running people all over the country instead of getting them from A to B. I think it is no coincidence that the airlines performing the worst are the ones who connect the most passengers.

Unless these airlines can grow a pair of round ones and start charging an appropriate price for tickets I don't see any other choice but eliminating the hub and spoke system. They need to quit wasting money on shopping for airlines to merge with and start spending money on redrawing their business plans and route structures.