This is a guest post by Richard M. McCabe, PhD, supporting faculty in Strategy at the Graziadio School of Business and Management, Pepperdine University
A recent Air Travel Consumer Report (February 2008) describes the continuing decline in service experienced by airline passengers in the United States. More than 24 percent of scheduled flights by U.S. airlines were late arriving at their destinations in 2007. That is almost 7 percent more late arrivals than in 2006 and continues a five-year history of increases in late arrivals. And when flights arrive late they often leave late for the next flight, over 21 percent of flights departed late in 2007. That is almost 6 percent worse than in 2006, and again continues a five-year history of increases in late departures.
Over seven checked bags were mishandled in 2007 for every 1,000 passengers, an increase of more than 4 percent over 2006. There was a 12 percent increase in involuntary denied boardings in 2007 versus 2006. Denied boardings is an indicator of selling more tickets than seats available. And consumer complaints increased about 59 percent in 2007 over 2006.
So now a merger of Delta Air Lines and Northwest Airlines appears imminent. Continental Airlines and United Airlines are reportedly discussing a merger, particularly if the Delta-Northwest merger is formally pursued. Other combinations have been discussed.
What can the various stakeholders expect if there is a significant consolidation in the U. S. airline industry?
Continue reading ‘Will U. S. Airline Consolidation Help the Industry?’
