Major airline news this Monday morning that the Hat Trick did not see coming with regard to Dallas-based Southwest Airlines and Orlando-based Air Tran Airways. According to news releases this morning on Yahoo Finance and CNBC, Southwest Airlines and Air Tran Airways have entered into a merger agreement with Southwest as the surviving carrier.
This is a major announcement that will have significant ramifications for several other carriers, most notably Delta Airlines who shares a hub with Air Tran at Atlanta Hartsfield-Jackson International Airport (ATL) although Delta's hub is significantly larger. Southwest does not currently serve Atalanta. In addition, Southwest has a large presence at Baltimore-Washington International Airport (BWI) and Air Tran operates a mini-hub at BWI so the merger will essentially make the airport a hub even though Southwest does not use that terminology in their business operations.
The Hat Trick will try to get some more analysis as I digest the merger news and its impact on the airline industry.
Showing posts with label Southwest. Show all posts
Showing posts with label Southwest. Show all posts
Monday, September 27, 2010
Sunday, April 11, 2010
United-US Airways Merger Talks Continue
From the Hat Trick's perspective this is not great news but better compared with my post on this subject yesterday. According to an article in The Street published last night merger talks between United and US Airways have become "very serious" and are at a "very sensitive stage" at this juncture. The deal could still fall apart, particularly given the opposition to the merger from the pilots and flight attendant unions, but could also very easily go forward given the strong interest in consolidation by both airline CEOs. The United States Department of Justice may also have some concerns given that US Airways has a large mini-hub at Washington Reagan National Airport and United's East Coast hub is located at Washington Dulles International Airport. A combined carrier would have a real choke-hold on this particular market and that might give pause to Justice. Remember when United tried to merge with US Airways in 2000? It eventually was shutdown after serious anti-trust concerns in were raised in 2001 by the Bush Administration's Justice Department...and a Republican department at that!
One positive note in the article is that it appears that United would be the surviving carrier in this merger. This is good news from the Hat Trick's perspective but I still have concerns. Mergers always seem to look good on paper but in actual implementation can be exceptionally tricky and have long lasting effects on the newly merged company and consumers. Recent history illustrates this quite well when America West Airlines merged with US Airways to become the new US Airways in 2005. Five years later the company is still dealing with significant labor and customer service issues. Other examples from the annals of airline history include (surviving carrier/name is listed first) the following:
So we will continue to monitor this story and see what happens...and at least be thankful that it appears the current US Airways management will not be running the merged carrier if this all goes through.
One positive note in the article is that it appears that United would be the surviving carrier in this merger. This is good news from the Hat Trick's perspective but I still have concerns. Mergers always seem to look good on paper but in actual implementation can be exceptionally tricky and have long lasting effects on the newly merged company and consumers. Recent history illustrates this quite well when America West Airlines merged with US Airways to become the new US Airways in 2005. Five years later the company is still dealing with significant labor and customer service issues. Other examples from the annals of airline history include (surviving carrier/name is listed first) the following:
- American-TWA
- Northwest Orient-Republic (Northwest)
- US Air-Piedmont
- Continental-Frontier (first incarnation)/New York Air/PEOPLExpress.
So we will continue to monitor this story and see what happens...and at least be thankful that it appears the current US Airways management will not be running the merged carrier if this all goes through.
Wednesday, January 21, 2009
On Location
The Hat Trick is going on location to Florida for a few days to get out of the winter cold and, more importantly, crowds that have infiltrated Washington, DC to celebrate the inauguration of President-elect Barrack Obama. With impending unemployment, the East Coast Wing’s felt a little R & R was in order and, luckily, an invitation was extended from the in-laws to come down to Sarasota…this post is actually being written on the plane.
The airline of choice for this trip is US Airways due to the fact that it was cheap ($358 roundtrip for everyone) and easy as we secured seats on US Airway’s non-stop service between Washington National (a short ten minute drive from home) and Fort Myers…non-stops are key when traveling with East Coast Wing Junior.
Flying US Airways is always interesting as the airline continues to plummet in its service levels. US Airways was the first mainline carrier to begin charging for checked baggage and the first to charge for beverages on the plane…and not just alcohol…but soda (pop to my Midwestern readers), coffee, tea and even water. The reasoning for all of these charges that came last summer was to “recap revenue lost to the high price of oil and to remain competitive in a difficult climate.” The irony in this statement is that oil has dropped to about $35 a barrel as of yesterday but for some reason the charges are still in effect…interesting. The baggage fees on US Airways run $15 for the first bag and $25 for the second. The East Coast Wing’s were exempt from the baggage fees as I have Star Alliance Gold status with US Airway’s partner United Airlines so the three pieces we checked were not charged…but it would have cost us $130 roundtrip if I did not have status. So on top of the price of your ticket there are many “ad-ons” which can drive up the cost of a trip.
This is how many European budget carriers operate but US Airways is the first to take it to this level in the United States. Most other major air carriers in this country have followed the lead of US Airways and are charging fees for checked luggage…some allow the first bag to be checked free of charge, some charge for the first bag, and all do not charge for their customers who have elite status with the airline. Interestingly, Southwest Airlines has chosen not to charge baggage fees or fees for beverages in-flight. Southwest, once known (somewhat unfairly) as the “Greyhound of the Air” has initiated a very aggressive advertising campaign to point this out to consumers and it appears to have gotten a lot of attention (thank you You Tube!).
The Hat Trick isn’t sure what to make of all of this…I have sympathy for the airlines in this difficult economy but I also get frustrated with the “nickel and diming” of consumers that is becoming common in this culture. Case in point by blaming the need to charge for drinks when oil is expensive but not stopping the practice when oil drops to its lowest price in over ten years. The Hat Trick is no doubt naive but this is how I feel…not that US Airway’s management is concerned about my views!
Regardless, US Airways is getting my family to Florida and that is the important thing. It may not be pretty but it gets the job done! Hopefully there will be some more time to blog under the Florida sun…
The airline of choice for this trip is US Airways due to the fact that it was cheap ($358 roundtrip for everyone) and easy as we secured seats on US Airway’s non-stop service between Washington National (a short ten minute drive from home) and Fort Myers…non-stops are key when traveling with East Coast Wing Junior.
Flying US Airways is always interesting as the airline continues to plummet in its service levels. US Airways was the first mainline carrier to begin charging for checked baggage and the first to charge for beverages on the plane…and not just alcohol…but soda (pop to my Midwestern readers), coffee, tea and even water. The reasoning for all of these charges that came last summer was to “recap revenue lost to the high price of oil and to remain competitive in a difficult climate.” The irony in this statement is that oil has dropped to about $35 a barrel as of yesterday but for some reason the charges are still in effect…interesting. The baggage fees on US Airways run $15 for the first bag and $25 for the second. The East Coast Wing’s were exempt from the baggage fees as I have Star Alliance Gold status with US Airway’s partner United Airlines so the three pieces we checked were not charged…but it would have cost us $130 roundtrip if I did not have status. So on top of the price of your ticket there are many “ad-ons” which can drive up the cost of a trip.
This is how many European budget carriers operate but US Airways is the first to take it to this level in the United States. Most other major air carriers in this country have followed the lead of US Airways and are charging fees for checked luggage…some allow the first bag to be checked free of charge, some charge for the first bag, and all do not charge for their customers who have elite status with the airline. Interestingly, Southwest Airlines has chosen not to charge baggage fees or fees for beverages in-flight. Southwest, once known (somewhat unfairly) as the “Greyhound of the Air” has initiated a very aggressive advertising campaign to point this out to consumers and it appears to have gotten a lot of attention (thank you You Tube!).
The Hat Trick isn’t sure what to make of all of this…I have sympathy for the airlines in this difficult economy but I also get frustrated with the “nickel and diming” of consumers that is becoming common in this culture. Case in point by blaming the need to charge for drinks when oil is expensive but not stopping the practice when oil drops to its lowest price in over ten years. The Hat Trick is no doubt naive but this is how I feel…not that US Airway’s management is concerned about my views!
Regardless, US Airways is getting my family to Florida and that is the important thing. It may not be pretty but it gets the job done! Hopefully there will be some more time to blog under the Florida sun…
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