Wednesday, April 07, 2010

As United, US Air Talk Merger, the Passenger Squeeze Is On

Lots of baloney is being sliced as United and US Air talk merger.

Keep this in mind: Since 2000, the domestic U.S. air transportation system, at least as measured by available seating capacity on the major airlines, has shrunk by 20 percent. That's the equivalent roughly of one major airline disappearing.

In the last two years, airlines have been shrinking capacity as much as they can as demand sagged with a deteriorating economy.

As demand grows again, the airlines want to devise a permanent system in which most seats are always full on most flights -- and any merger between United and US Air would be done with that idea in mind. From the airlines' point of view, that's the only guarantee of sustained profitability.

For well over a year, most seats have been full on most flights anyway, as airlines routinely reported so-called load factors (the percentage of available seats sold) well into the 80 percent levels.

That number is creeping up.

In March, United planes flew with a whopping 85 percent of seats full on domestic flights, and 83.2 percent full on international flights.

At the same time, United shrank domestic seating by 5.3 percent and international by 6.1 percent, compared with March 2009.

In March, US Airways flew with 84.8 percent of domestic and 83.2 percent of international seats full, while shrinking domestic capacity by 4.7 percent (and adding 6 percent to international capacity).

They'll be shoveling a lot of stuff about "synergies" in any merger scenario, but if it happens, this much will be assured: Airplanes, already more full than at any time in the history of commercial aviation, will become fuller.

The media will focus mostly on the corporate/Wall Street story, which certainly is important.

But the travelers' story is that passengers will have fewer choices; we'll be more miserable and cramped. And we'll get to pay more for the privilege.


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