With jet fuel prices soaring and airline stocks plunging, proponents of mergers are casting as nearly inevitable combinations that would create three mega-carriers carrying more than 70 percent of the nation's air traffic....
But huge hurdles stand in the way of airline mergers. Other than industry executives and some investors, airline combinations aren't terribly popular. Mergers can bring operational problems, staff cuts and higher fares, while drawing heat from such important constituencies as business travelers, airline unions and the general public....
But other experts say jet fuel prices are more an excuse than a valid reason for mergers that some carriers were pushing even before the price spike. They point out that it will take years for any carrier to see any savings from synergies or improved revenues from a combined route structure....
Mergers might make more sense next year, however, assuming fuel prices decline, Schwieterman said. He said the combinations could then be done with an eye toward long-term strategic changes, rather than an emergency move to boost depressed share price.
read the CNN story
No comments:
Post a Comment