This Week’s Airline Roundup 2

More numbers are coming out from the
airlines about their April operating results.  As is often the
case, we see starkly opposite trends from very different carriers.

United Airlines reported a drop of 2.7% in
its domestic passenger numbers (and another drop of 2.2% in its
international traffic).  But, in the same month, JetBlue reported
an increase of 6% in its passenger numbers.

United tells us that times are tough and it
has no alternative other than to merge with another dinosaur. 
JetBlue says 'Hey guys, thanks for all your passengers'.

Clearly, if United continues to shrink and
JetBlue (and other low-cost carriers) continues to grow the time is
foreseeable when JetBlue will be larger than United and United smaller
than JetBlue.  No wonder United is so keen to merge with
Continental — that will put off the ugly day of reckoning when JetBlue
(or some other low cost carrier) overtakes United in terms of overall
marketshare and size.

The dinosaurs have almost never done
anything other than grow in line with the market's growth, and/or grow
by merger and buyout.  On the other hand, the low cost carriers
have grown exclusively by growing markets and taking market share from
the dinosaurs.  In a manner surprisingly analogous to the dinosaurs
of yore, the airline dinosaurs seek safety in size, without realizing
that by becoming larger, they become more unwieldy and more vulnerable,
and more likely to ultimately fail.

Most of the time I don't even bother to
report the bluster that comes from Rep Jim Oberstar, chairman of the
House Transportation Committee.  Although he does a fine job of
talking the talk, it is very rare to see him walking the walk.

But for the record, and in the desperate
hope that maybe this time someone important will listen to him, allow me
to report that he wishes the Justice Department to block the planned
merger of United and Continental.

Will this make any difference?  Well,
let's just say that two years ago, he similarly opposed the purchase of
Northwest by Delta.  Delta's acquisition of Northwest was granted
with no problems and no notice being taken of Mr. Oberstar's public

JetBlue is not only enjoying a new growth
spurt domestically, it is also showing that it can ally itself with
other airlines without needing to merge with them or seek formal
antitrust immunity.  It already works with its 19% shareholder Lufthansa, with Aer Lingus (another independent airline), with American
Airlines (a direct competitor of Lufthansa), and this week has announced
another tie up, this time with South African Airways.

SAA is a member of the Star Alliance, and so
is a bed mate of Lufthansa, but a competitor of American.

Does this mean that on the one JetBlue
flight we might see passengers who bought a ticket through JetBlue
itself, Aer Lingus, American Airlines, Lufthansa, and now South African
Airways too?

What is JetBlue's secret?  It grows, it
doesn't need to merge, and it doesn't need to be given a Get Out of Jail
Free card allowing it to indulge itself and activities that would
otherwise be deemed illegally antitrust.  It forms alliances with airlines that are individually arch competitors with each other (and arguably sometimes even competitors with JetBlue itself, too).

If I was Continental, I'd be wanting to merge with a
dynamic go-ahead airline like JetBlue, an airline that is thinking outside the
box and growing; not with a moribund old carrier such as United, an airline that
considers innovation narrowly within the perspective of how much more they can
charge for their baggage fees.

Leave a ReplyCancel reply

Free Weekly Emailed Newsletter

Usually weekly, since 2001, we publish a roundup of travel and travel related technology developments, and often a feature article too.

You’ll stay up to date with the latest and greatest (and cautioned about the worst) developments.  You’ll get information to help you choose and become a better informed traveler and consumer, how to best use new technologies, and at times, will learn of things that might entertain, amuse, annoy or even outrage you.

We’re very politically incorrect and love to point out the unrebutted hypocrisies and unfairnesses out there.

This is all entirely free (but you’re welcome to voluntarily contribute!), and should you wish to, easy to cancel.

We’re not about to spam you any which way and as you can see, we don’t ask for any information except your email address and how often you want to receive our newsletters.

Newsletter Signup - Welcome!

Thanks for choosing to receive our newsletters.  We hope you’ll enjoy them and become a long-term reader, and maybe on occasion, add comments and thoughts of your own to the newsletters and articles we publish.

We’ll send you a confirmation email some time in the next few days to confirm your email address, and when you reply to that, you’ll then be on the list.

All the very best for now, and welcome to the growing “Travel Insider family”.


Exit mobile version