Last week saw two big stories in the airline business -- stories that were the focus of industry comments and developments and might affect your future travel.
1. Frontier-Spirit Merger
Two of the country’s largest low-fare lines announced a merger: Frontier will acquire Spirit, pending government approval. The combined airline will still be small compared to the four giants -- it will account for just about 7 percent of the total domestic market -- but it will be substantially larger than Alaska, JetBlue, Allegiant, Hawaiian, or Sun Country.
Why it Will Work. Industry folks see this as an easy combination to put together: Both lines share very similar business models and both use only Airbus 321-family planes. Top management and ownership are familiar with both lines’ operations and systems. Even though the lines compete at lots of individual airports, they overlap on only about 40 percent of their point-to-point routes, claiming the merger will therefore not reduce competition. As in just about every airline merger, the airlines claim that greater “scope” will give travelers more choices and “synergies” will eliminate much duplication of effort and reduce total costs substantially.
Why it Won’t Work. Naysayers focus on possible antitrust issues. There has been a general feeling that after the last round, further domestic airline mergers are unlikely to pass regulatory examination.
How it will Affect You. From a passenger standpoint, it’s a big “meh.” Very little will actually change. Beyond the opening of a few new routes, the proclaimed consumer benefits are largely vaporware. Also, some passenger groups claim that, depending on which airline’s product mix prevails, they will lose Frontier’s superior frequent flyer program and extra-legroom seat sections or Spirit’s Big Front Seat option.
My Take. I believe that this merger will probably get a regulatory OK, and there’s nothing else that is likely to block it. These lines do not compete with each other so much as they both compete with the giants on the basis of low fares. Certainly both lines offer the same very poor base product and fare structures. A bigger, stronger combined line is likely to have greater lasting power against the giants than two smaller lines. My only quibble is about losing some of the few unique benefits that Frontier and Spirit have featured.
2. No-Fly List
Unruly passengers have become a big problem for airlines -- and their passengers. The FAA counted nearly 1,100 cases in 2021, with this year on a trend to pass that number. As a result, Ed Bastian, CEO of Delta Air Lines, requested that the Department of Justice establish and maintain a national “no fly” list of passengers who have disrupted airline flights. Industry leaders generally support the objective of keeping unruly travelers off airplanes, but they differ on which of three alternatives best would serve the objective:
-- Rely on courts and current FAA authority to arrest offenders, put them on trial, and impose stiff fines and/or prison time on any found guilty. The problems here are that not all instances result in court proceedings, and involving the courts could stretch the process out over many months.
-- Allow the airlines to maintain their own lists and adopt their own rules without requiring any government involvement. Everybody seems to agree that individual airlines are already free to maintain such lists. Sharing them among other airlines raises antitrust concern, but that could easily be waived.
-- Establish a government list. This option has a lot of support, but some folks are concerned about lack of “due process” for targeted travelers.
How it will Affect You. However accomplished, keeping unruly travelers off airplanes is good for everybody.
My Take. The court process is too cumbersome. I favor some kind of widely applicable list, either a government list or shared and immunized airline list. But either approach should include provisions that allow accused travelers some right of defense and appeal and perhaps include a 10-year expiration limit on duration of the first offense. What’s your favorite?
