Events Calendar
In This Section
Most Read Stories
Police accuse bank robbery suspect of gobbling up note (with dashcam video)
Victim of beating in Kent last week is declared dead at Akron hospital
Can DNA tests free ex-Akron captain?
Dad accused of forcing son into field, killing him
Man found dead in North Akron home is identified
Does it work? Test team returns to try out new products advertised on television
Blogs:
Pets:
Cat-loving chihuahua suckles seven abandoned kittens
The Heldenfiles:
Sunday Notebook
Patrick McManamon:
Browns sick after sick loss in Detroit
Akron Zips:
Zips advance to Sweet Sixteen
Tribe Matters:
Seven players added to Tribe’s 40-man roster
Cleveland Browns:
Post-game defensive quotes
Kent State Sports:
Kent State defeats Rochester College, 63-44
Cleveland Cavaliers:
Gameblog: Cavs vs. Philadelphia 76ers
Buckeye Blogging:
OSU – Michigan college football rivals meet in Baghdad
Varsity Letters:
Four area football teams play tonight
All Da King's Men:
Blog of Mass Destruction:
Will Health Care Reform Pass?
Akron Law Café:
Health Care Financing Reform: (69) The Brookings Institute Study on "Bending the Curve" – Four General Strategies
See Jane Style:
Vintage Chic
Car Chase:
TIME TO GET YOUR COLLECTOR CARS WINTERIZED
Let's Talk Real Estate:
Faye Dunaway to be Evicted?
Ohio Travels with Betty:
George is looking for a Thanksgiving buffet in Akron.
Sound Check:
Steely Dan Plays "The Royal Scam" at E.J. Thomas Hall
HRLite House:
Personal Rant – You are All Wrong About Jobs, or the Lack of Jobs, Being the Reason People Do Not Live in NEO
Akron Gamer:
Nintendo's Mario endures even as games come and go
The merger of Delta and Northwest? It makes sense for a struggling airline industry
Published on Monday, Apr 21, 2008
Consolidation addresses the former issue. The subsequent size of the new airline (keeping the name Delta as it becomes the largest American air carrier) makes much easier acquiring the credit necessary to deal with the latter challenge.
The airline industry suffered a withering blow when terrorists struck on that bright September morning. Congress came to the aid of airliners, and in recent years, the carriers had rebounded, travelers returning to the skies along with sufficient profitability. That was before oil prices soared past $100 per barrel, adding monumentally to fuel costs. Add the slowing economy and spreading credit crunch, and no wonder four smaller airlines, including Frontier, have filed for bankruptcy protection.
Airline mergers haven't been received kindly. The Department of Justice blocked a deal between Northwest and Continental. It did the same when United and US Airways wanted to marry. The difference now? The hope is the department will recognize the economic realities. The merged airline still would dominate its hubs. It would not significantly diminish competition overall in the airline market. More, low-cost carriers, such as Southwest, would remain a substantial presence, keeping prices in check.
The recent regulatory troubles have reflected the inconsistency of the Federal Aviation Administration as much as anything. A successful effort to improve safety, starting in the 1990s, morphed from enlightened collaboration to misguided corner-cutting. True enough, air travel has never been safer. Yet lax regulation risks catastrophe. The heightened attention has brought to the forefront the aging fleets of many airlines. These older airliners require more maintenance, and they guzzle more jet fuel.
An updated fleet leads eventually to the savings necessary to help achieve financial stability.
Not surprisingly, Chairman Oberstar will examine closely every detail of the deal. Consumer groups will warn against higher prices (as if that is avoidable in today's oil market). These and other questions have much merit. Mergers are notoriously turbulent affairs, even when passing antitrust muster.
Deserving, too, of attention are the essentials of surviving in the airline industry today. This has never been an easy industry for making money. It is even more difficult now, so labor-intensive and requiring such massive capital outlays. Thus, the industry must restructure. The hope is, the merger of Delta and Northwest will lead the way.
Get the full article here.
Comments
Click here to post your comments
