When airlines merged in the past, executives
at both companies used to talk about the synergies that were there and how that
was an advantage in collaborating..
Apparently that isn’t so true anymore.
Now it appears that carriers have to be as
different and disparate as possible to receive Department of Justice regulatory
approval. At least, that’s what I took from the comments made by Hawaiian
Airlines CEO Peter Ingram, who talked about the potential merger with Alaska
Airlines and how different the companies were, and how they did not have
overlapping routes. So he expects DOJ approval.
The differences between the two airlines
might work to their advantage.
And it doesn’t hurt that they said
publicly they will each maintain their brand names and operate independently.
Perhaps that is what doomed, in part, the
potential merger between JetBlue Airways and Spirit Airlines, which was blocked
by a federal judge and opposed by the Department of Justice.
Will there ever be another airline merger?
So will there ever be another airline
merger? Sure. Never say never. And the sun, the moon, and the stars will have
to align, at least under this administration, which has exhibited a reluctance
against big business. But the possible merger of Hawaiian and Alaska Airlines
suggests that the consumer will not be affected as much.
Frankly, just the nature of the two
airlines will seemingly be an advantage. Let’s face it, you’re not going to fly
from Juneau to Anchorage on Hawaiian Airlines, and you’re not going to fly from
Maui to Hilo on Alaska. There is little to no competition between the two
carriers that would drive airfares up.
That said, it is doubtful that one of the
big four airlines will need to merge and expand. Their plays at the head of the
line is secure. It wouldn’t be surprising to see two smaller airlines try to
get together. Like, perhaps Spirit will revisit its potential collaboration
with Frontier Airlines.
But no matter which two airlines decide to
get together, they will have to meet the stringent, but undefined requirements
set out by the regulating agencies. Unwritten rules, so to speak.
So it appears that any future merger among
airlines would be best served by being as different as possible. Or those
involved with the airline business will keep those involved in jurisprudents in
good standing for a long time.
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