Consolidations, bankruptcies have airline industry on edge

[USA320Pilot]

Consolidations, bankruptcies have airline industry on edge

“When David Siegel was in charge of US Airways earlier this decade, he predicted the industry would be ruled in the future by just three giant U.S. carriers. Then the pilots union and US Airways' chairman ousted him. Turns out the embattled Mr. Siegel may have been right after all.â€￾

“More carriers will file for bankruptcy, he said, more flights will be cut, more jobs will be lost and more hubs will retract and close, just as Pittsburgh's did under Mr. Siegel's watch. In fact, Mr. Siegel predicted that Salt Lake City, St. Louis, Charlotte, N.C., Indianapolis, Cincinnati and Memphis all would disappear as hub operations in the coming years.â€￾

“Mr. Siegel began looking for merger partners; he even gave thought to a takeover of United, calling the idea ‘Project Minnow.’â€￾

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USA320Pilot

 

[Fly]

He predicted the following tie-ups:

• American Airlines and Alaska Airlines.

• Continental and United (rumored to be in the works)

• Northwest and Delta (announced last week)

• America West and US Airways (which was announced in May 2005 and closed in September 2005)

• Southwest, ATA and AirTran.

• JetBlue Airways, Frontier and Independence Air.

The Delta-Northwest hookup announced last week "makes sense" and "the next most likely combination is Continental-United," Mr. Siegel said. American, he added, may be weary of mergers after its union with TWA earlier this decade did not go well, but he can also see American combining with either Alaska or US Airways.

"Consolidation, if managed appropriately," he said, "can be good for everybody." There will be fewer jobs, but "those jobs will be more secure." There will be fewer carriers, he said, but enough competition to keep prices low.

 

[deltawatch]

Mr. Siegel predicted that Salt Lake City, St. Louis, Charlotte, N.C., Indianapolis, Cincinnati and Memphis all would disappear as hub operations in the coming years.

In an AA/US scenario I think AA would downsize RDU and consolidate in CLT. They have wanted an east coast, north-south hub for many years.

A MEM, CVG closure would increase traffic through PHL, CLT and ATL. Which would be great if they free up ATC by parked about 500 RJ's and buy more mainline equipment.

 

[BaronManfred]

Not what we want to hear but unfortunately right on the money. We also need to think about how all of these coming changes will impact on the regional carriers with their smaller but more expensive to operate planes.