News spread fast of Delta’s desire to merge with United Airlines or Northwest Airlines. It has been known for some time that a merger in the airline industry would happen, the only question was, who would it be. Now that it looks imminent that Delta will actually go through with a merger, let’s examine the affects it will have on the industry and the traveller.

The affect on the industry

The immediate result will be a slightly chaotic scramble for all of the airlines to resecure their market and assess the damage done by a merger. From alliance ties to hub locations, all of the airlines will have to figure out the balance that will work post-merger, even if they are not directly involved.

Hubs are one of the bigger points of contention. With consolidation comes operations movement and my prediction is the move away from using Salt Lake City as a hub if Delta chooses United Airlines or Cincinnati if Northwest is their choice. Salt Lake City has been a great hub for Delta but has not completely filled their needs for a west coast drop off point. With United’s firm grasp on both the Los Angeles and San Francisco markets, Delta’s hold becomes much tighter. Their ability to offer multiple transcontinental flights to multiple markets would be near unstoppable, competing heavily just with American and Continental.

If Northwest is the airline chosen, then I could see Salt Lake City being used more heavily and the Cincinnati airport slowly decommissioned as a hub. CVG is a nice airport and handles multiple types of traffic but I am not sure the market it serves is large enough to justify its continued use. Delta would be much better off with a more centrally located airport to serve the middle U.S. while at the same time being able to get more people across the Atlantic. My only reservation with Memphis is its heavy use by FedEx for operations. This could potentially lead to traffic issues, resulting in delays and poor performance.

The other big piece of the merger pie is the aircraft situation. Northwest’s fleet of DC-9s is growing old. Though they are paid off, their condition continues to deteriorate, leading to an uncomfortable experience and sometimes delayed flight. Delta would sell these planes off if they absorbed Northwest. If United ends up being the focus of Delta’s acquisition desires, I could see portions of the United fleet being sold off as well as some of Delta’s MD-88s. In either case, I think Delta will aim to find the perfect balance for new international traffic and connecting flights around the country.

One more aspect to consider is the airline industry as a whole. If a merger is allowed to proceed, there is potential for a third airline to go out of business. That’s right, US Airways may bite the dust if the industry is condensed and a positive experience reached. This would effectively rid the industry of what many consider a “bottom feeder”.

The affect on travellers

There is a lot of speculation that a Delta merger could be detrimental to customers for a number of reasons. The main reason to worry is the fact that there will be less seats available and therefore higher fares. As one airline merges with another they will certainly reduce the size of their fleets (see above), effectively choking the market. Customers will be forced to pay the fares because they will be some of the only options are certain routes. While this will probably be handled by the SEC there is always the possibility that ticket prices will significantly increase.

The other point of contention is frequent flyer programs. As the programs become one, the value of the mileage becomes less because, again, the number of reward seats available on flights will be drastically reduced. The reduction in the number of seats will be caused by an increase in program subscribers and artificially by the airline, who will want to make sure that they are not “giving away” too much, even though tickets purchased with miles are seen as revenue.

Conclusion

So where does that leave us? In my opinion, a merger may be the boost the airline industry needs. Quality and standards are fairly low, both at United and Northwest and by merging with a carrier that is slowly working to get it right, they may produce a better product. It is hard to ignore that the need for more capacity in certain markets is growing quickly while in others it is being forced to diminish. By allowing Delta to merge with one of these carriers we can hope to see both of these criteria occur. Delta can effectively serve the west coast as well as foreign markets it has yet to touch while possibly reducing waste.

Of course there are negatives to this, namely, the reduction in capacity. This may lead to sharp increase in fare prices, pushing more customers to the low cost carriers Southwest and JetBlue.

The industry needs an overhaul, let’s just hope this one is for the better.

British Airways announced a new subsidiary airline called OpenSkies that will operate flights between New York and Continental Europe utilizing 3-class Boeing 757s. The aircraft will be configured with Business, Premium Economy, and Economy seats.

This is somewhat of a surprise since BA’s competition across the Atlantic is fierce, especially with Business Class only carriers. Their idea is novel though, as the plane configuration, with a premium economy section, will attract more customers wanting a comfortable ride to Europe.

OpenSkies has not announced which New York area airport it will fly out of, but my guess would be that they actually split traffic between JFK and EWR to keep some landing slots open for the widebody fleet.

Eventually we will have to see one of these airlines going across the Atlantic in 757s cut service due to lack of demand. The air will be clogged with flights from multiple U.S. and international carriers going between mainland Europe and cities around the United States and there won’t be anyone on some of them. The one upside is the fact that ticket prices should drop significantly when the Open Skies agreement is finally observed.

Apparently, yesterday’s post on what Continental can do to be competitive was a hit. A large increase in traffic registered in my statistics and caused the site a bit of a hiccup late last night.

Driving to work this morning I continued to think of things Continental can do to keep their business strong and make it even stronger. I have created another list below that outlines my thoughts on a variety of different things Continental can improve on.

• President’s Club experience
  • Overall, the President’s Club is a great way to get away from the terminal and relax in a much calmer atmosphere.
  • The internet access in most of the clubs is awful. I am not sure if it is due to leechers sitting outside of the club’s doors or if the network connections are just that bad, whatever it is, it needs to be fixed. Continental has a huge advantage over other clubs by simply providing internet access for free, now do us one better and make it really usable.
  • Increased space/seating should be a priority. After visiting the President’s Club in the E terminal at IAH, I was taken aback by the fact that people had turned four seats by the windows into their personal offices, leaving very little seating for those of us who just wanted to get off of our feet. If Continental can increase club size, or add more clubs to airports where they know it gets crowded, things would be much more enjoyable.
• Legroom in coach
  • The legroom in coach class on Continental’s flights is laughable. Sitting in it for four hours is almost unbearable, let alone a transatlantic or worse, transpacific flight. Continental needs to seriously consider expanding the fleet to increase frequency to make up for a slight seat reduction to add the legroom. I can guarantee that customers in the back will be much happier.
• Fleet aircraft
  • Continental still has a large number of 737-300s and 737-500s in their fleet. These planes are older, even less comfortable, and used on routes that make them teeter on the brink of unbearable. Flying from Houston to Newark on one of these is right up there on the list of least favorite things to do, right below going to the dentist. Update the fleet and/or pull these planes off of longer haul routes and have them relegated to short hops.
  • The ERJ situation has to be fixed. Newark is clogged to the brink of collapse with these little birds taking up gates, landing and takeoff slots, and overall airspace. Reduce the number of these planes and customers will see a vast improvement in on-time performance and comfort at both Newark and Houston Intercontinental. This goes for the CRJ-200 as well, which are even less comfortable than the ERJs.
• Hub locations
  • Continental’s hub situation is slowly getting better. With the recent announcement that the operation at Cleveland would receive $50 million in renovations there is a glimmer of hope.
  • The west coast needs some sort of “base of operations” for Continental. It used to be LAX but that has been all but abandoned. An increased presence on the west coast will definitely boost business customers traveling back and forth between New York and LAX or SFO.
  • A hub on the west coast could also improve flight options for those of us looking to get to China, Japan, and Southeast Asia faster and for less money. It is in Continental’s best interest to look into what it would take to get a full scale hub built on the west coast.

That’s all that really struck me this morning driving into work. I am sure I left something off and will more than likely end up editing this article to fix it. If you would like to contact me with your suggestions/ideas for Continental, feel free to leave a comment or e-mail me at ssegraves@gmail.com.

*This article will be republished at http://stephan.wordpress.com and http://stephan.newsvine.com

When my “base of operations” switched from Dallas to Houston in February of this year my choice of airlines changed too. I was a frequent flier on American Airlines and had the status to prove it. I enjoyed DFW and did not mind flying in and out of there. With the move to Houston, my airline of choice has become Continental Airlines and the airport I frequent is now IAH.

With the change my enjoyment of flying has increased by a great amount. Continental has only let me down one time but they have more than made up for it with great service on every other trip with them. My recent flight in the BusinessFirst cabin from Newark to Seattle was one of the most enjoyable flights I have ever taken. The Continental flight attendants are some of the best in the business and the fact that the airline still provides meals at mealtimes is a testament to their devotion to their customers.

Recently, Continental, in conjunction with a message board community of frequent fliers, announced that they would be holding a very large event at Intercontinental Airport. The event will take place September 28-29 and will include tours of Continental facilities and a Q&A session with various Continental “C” level management, including Larry Kellner himself. As you can imagine, I am attending this event with Jess and want to have a nice list of suggestions and questions for the Continental management.

So, how can Continental improve and compete more heavily for my business?

• Better transcontinental services and comfort.
  • Continental only has one east coast hub, Newark, and it serves Los Angeles, San Francisco, and Seattle. The comfort on these planes for both coach and first class passengers is minimal. If you are on a red-eye, do not assume you will get a good amount of sleep in coach, the seat pitch is only 31″ and pales in comparison to JetBlue’s 34″ pitch. The three inches may not sound like a lot, but it definitely helps when you are wanting to relax a little.
  • The above comment goes hand-in-hand with upgrading of the transcontinental fleet, which should be segregated into an almost three class configuration. Have a first class, business class, and economy section (with more legroom) and increase the capacity on the routes. It is near impossible to obtain a first class seat on a transcontinental route due to the fact that the largest plane flying these routes only has 24 seats in the front.
• Improve the elite check-in and security lines, especially in Houston and Newark.
  • The Newark elite security lines in terminal C are a joke, they merge right before you get to a metal detector and just become a bottleneck as the airport gets busier throughout the day.
  • Give elites a true “elite” line and make their trip a little more hassle free, it makes all the difference, especially when being forced to fly through Newark.
• President’s Club food choices are going the way of the Dodo
  • I understand that the President’s Club is a way to escape the hustle and bustle of the terminal and I appreciate it, but the food options are somewhat depressing. The cheese and crackers combination just gets old after a while. Maybe add a few other small options such as bite-sized sandwiches or some sort of meat to accompany my cheese and crackers.
• Food options in coach teeter on the inedible side of the spectrum
  • The cheesesteak pizza and the faux-hamburger have to go. I know that Continental is just trying to put some food into the customer’s belly, but these options are not really options at all.
  • Make a salad with chicken on top an option. The vinaigrette dressing that is provided on the flights is great, now compliment it with a little chicken or smoked salmon and I’ll be happy.

Those are the main quirks that stick out in my head as I walk through an airport terminal. I will still be a loyal Continental flier even the above never get implemented, it would just be nice to see it happen. The one other thing that Continental could do to keep its already loyal elite fliers is block off middle seats for them. Instead of filling the plane from the front to back, do the reverse, I guarantee there will be a great majority of businessmen who will thank you.