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The Big U.S. Airlines Have Dwindled Down To 4

by Takeoffeh.com

From the jet propulsion heydays of Pan Am, TWA and Eastern, the vibrant U.S. airline legacy has dwindled down to just four major, traditional carriers.

When Pan Am promised to ‘take the travail out of travel’, no one would have imagined how the airline landscape would change 50 years later. Here are a few nostalgic video reminders of the glory days of the big birds, from the ever increasing list of defunct airlines: Pan Am, TWA, Northwest Airlines, Eastern Air Lines, Braniff and Aloha Airlines.

A bit of nostalgia:
Pan Am: Introducing a new era of jet service
Braniff: When you got it, flaunt it
Welcome to the world of Trans World Airlines (TWA)

The New American Airline Landscape
Fast forward to 2010, and two of the legacy carriers – Continental and United Airlines – announce a merger which will create the world’s largest airline. If the merger is approved, the four surviving carriers will be United Airlines, Delta, American Airlines and US Airways.

Until this week, the new Delta, formed by the merger of Delta and Northwest, was the largest carrier in the world by revenue. With United Airlines buying out Continental, they’ll take over pole position, but not by much, with combined revenue of just under $29-billion while Delta hovers around $28-billion. Next stop on the U.S. list is American Airlines at $20-billion, then it’s a steep drop to US Airways at $10.5-billion, just ahead of Southwest.

Today there is a new breed of airline players in America – the ‘low-cost carriers’. Led by AirTran Airways, JetBlue, Southwest, Allegiant Air, Spirit Airlines, Sun Country, and Virgin America – these LCC’s are smaller, more flexible, and more adaptable than the big 4, but unfortunately, also susceptible to the vagaries of the airline industry.

Why Should We Care? We’re Canadian
While United and Continental are responsible for over 400 weekly flights at Toronto Pearson and more than 100 at Montreal Trudeau, the merger isn’t expected to have a significant impact on Canadian travellers. Industry analyst Robert Kokonis says the fact that Air Canada is a Star Alliance member along with United may result in some new cross-border codeshare destinations, but other than that, he doesn’t see much specific impact on Canadians.

However, Kokonis does believe that U.S. airfares will rise as a result of one less player, which would have a Canadian impact, mostly on corporations with frequent U.S. business travel. But there likely won’t be a dramatic increase, as Kokonis points out that U.S. domestic airfares have barely budged in 15 years.

One thing is clear: if this deal is approved, it will likely be the last of the U.S. airline mega-mergers. American and US Airways don’t appear to have enough in common to benefit from a union. There may be consolidation in the low-cost market, but nothing on the scale of Delta/Northwest and United/Continental.

The industry hopes the latest merger will take some of the ‘travail’ out of surviving in a fiercely competitive market.  Travellers, however, will still have to face the reality that air travel 50 years after that Pan Am commercial looks a lot more like a cattle call than a cocktail party.

by Bruce Parkinson

Photo Credits: upload.wikimedia.org, aviationexplorer.com, beta.thehindu.com

The Big U.S. Airlines Have Dwindled Down To 4

From the jet propulsion heydays of Pan Am, TWA and Eastern, the vibrant U.S. airline legacy has dwindled down to just four major, traditional carriers.

When Pan Am promised to ‘take the travail out of travel’, no one would have imagined how the airline landscape would change 50 years later. Here are a few nostalgic video reminders of the glory days of the big birds, from the ever increasing list of defunct airlines: Pan Am, TWA, Northwest Airlines, Eastern Air Lines, Braniff and Aloha Airlines.

A bit of nostalgia:
Pan Am: Introducing a new era of jet service
Braniff: When you got it, flaunt it
Welcome to the world of Trans World Airlines (TWA)

The New American Airline Landscape
Fast forward to 2010, and two of the legacy carriers – Continental and United Airlines – announce a merger which will create the world’s largest airline. If the merger is approved, the four surviving carriers will be United Airlines, Delta, American Airlines and US Airways.

Until this week, the new Delta, formed by the merger of Delta and Northwest, was the largest carrier in the world by revenue. With United Airlines buying out Continental, they’ll take over pole position, but not by much, with combined revenue of just under $29-billion while Delta hovers around $28-billion. Next stop on the U.S. list is American Airlines at $20-billion, then it’s a steep drop to US Airways at $10.5-billion, just ahead of Southwest.

Today there is a new breed of airline players in America – the ‘low-cost carriers’. Led by AirTran Airways, JetBlue, Southwest, Allegiant Air, Spirit Airlines, Sun Country, and Virgin America – these LCC’s are smaller, more flexible, and more adaptable than the big 4, but unfortunately, also susceptible to the vagaries of the airline industry.

Why Should We Care? We’re Canadian
While United and Continental are responsible for over 400 weekly flights at Toronto Pearson and more than 100 at Montreal Trudeau, the merger isn’t expected to have a significant impact on Canadian travellers. Industry analyst Robert Kokonis says the fact that Air Canada is a Star Alliance member along with United may result in some new cross-border codeshare destinations, but other than that, he doesn’t see much specific impact on Canadians.

However, Kokonis does believe that U.S. airfares will rise as a result of one less player, which would have a Canadian impact, mostly on corporations with frequent U.S. business travel. But there likely won’t be a dramatic increase, as Kokonis points out that U.S. domestic airfares have barely budged in 15 years.

One thing is clear: if this deal is approved, it will likely be the last of the U.S. airline mega-mergers. American and US Airways don’t appear to have enough in common to benefit from a union. There may be consolidation in the low-cost market, but nothing on the scale of Delta/Northwest and United/Continental.

The industry hopes the latest merger will take some of the ‘travail’ out of surviving in a fiercely competitive market.  Travellers, however, will still have to face the reality that air travel 50 years after that Pan Am commercial looks a lot more like a cattle call than a cocktail party.

by Bruce Parkinson

Photo Credits: upload.wikimedia.org, aviationexplorer.com, beta.thehindu.com




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