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Wednesday, May 5, 2010

United and Continental Merger

JFK International AirportImage via Wikipedia

United and Continental announced a merger agreement on May 3, 2010. The combined organization will serve 370 destinations around the world. Currently there are minimal domestic overlap routes and no international route overlaps. Together these two airlines serve more than 140 million passengers and fly to 370 destinations in 59 countries.

Sounds great right? However, upon closer look The Hoss discovered that both have been losing a substantial sum of money. Continental's 2009 losses were reported at $282 million and for the same period United reported losses of $651 million.

According to their press release the United, Continental merger is expected to result in a net annual savings of $1 to $1.2 billion by 2013. So what does this mean to the customer? Will we receive cheaper air fares, will baggage charges be dropped? Don't count on it. The only commitment the airline executives would make was that airfares would be governed by market demand. What that really means is we will charge you as much as the traffic will bear. We should all be thankful for low cost airlines such as Southwest, JetBlue, AirTran and in Canada West Jet. Their low cost tickets help keep the major air lines in check.

The Hoss has a suggestion for the name of the merged airline, Con U Air. First ad campaign will be you fly free and in small print each bag costs $500 two bag minimum.

By now you may have guessed The Hoss is a little skeptical that this merger will be of any benefit to the airline traveler. After all what benefit did we see with the merger of Delta and Northwest?

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