Well darn, I got beaten to the punch. I was about to write a post on this subject to be ahead of the curve but just as I sat down to start writing the news hit the wire about DL/NW and I immediately got sidetracked. That’s right around the same time that I get over a handful of IM’s of people thinking they’re breaking the news to me and ready to discuss it, along with a few emails of people that think they’re ahead of the curve… heh. In the world of geeks it doesn’t take very long for news to spread!
First of all I think it goes without saying that this Delta/Northwest merger approval frees up Continental to pursue any merger they’d like. Now they can redeem the “Golden Share” (doesn’t this sound an awful lot like Willie Wonka?!?!) for $100 and head over to match.com (airline edition) and take a compatibility test. Of course it seems like they’ve already taken it and decided United is the one they love (or is it the other way around with UA being the one looking for a partner but being too shy to ask for a date?), so let me try my best to explain why I think this is awful for the consumer, since so many people seem to think this is great news, since CO and UA are both strong carriers, thinking we’ll get the best of both worlds. Here’s why that’s not possible:
DL/NW are very compatible– nearly identical frequent flyer programs, their route networks will work great together with DL’s focus on Europe and South America and NW’s focus on Asia, making them a truly global carrier, not to mention their similar products. They both only have two cabins on all mainline flights, and they’re in the same alliance so overall most changes will be relatively minor, in my opinion, at least in the grand scheme of things. The same can’t be said for CO and UA.
CO and UA are, in my opinion, two of the best US carriers, but in opposite ways. They complement each other as far as their route network goes with Continental having an amazing network in Europe and South America (as well as India, a huge region that’s totally missing in UA’s network) and United having a focus in Asia and Australia, so they’ll truly have an impressive network if they combine. Unfortunately that’s where the good stuff ends.
I view the strengths of Continental to be their great premium product, their consistently good service, and their reasonable premium fares. I think United’s strengths are the exact opposite, namely their amazing mileage program, Economy Plus (add that to United already having three cabins on longhaul international flights!), their incredibly generous upgrade program whereby you can get plenty of upgrades on low fares when flying internationally as a top tier customer, and their all around good “cuddling” attitude towards elites. It’s funny, if I were to highlight the weaknesses of each they’d be the opposite of the strengths of the others and then more.
So most are saying at this point “Lucky, that sound good, they’ll create the best airline out there, combining the best of both worlds, right?” Well, I wish they could, but let’s step back for a second and think about this. One of the reasons that CO is so successful with their premium cabins is that they don’t have a lot of upgrades, at least on international flights and trascons. On average CO has less than one upgrade on a transcon flight…. that’s right, LESS than one. While we don’t have any facts for United, I’d guess it’s substantially over 50% upgrades on average. So why is this? Well for one CO has a superior product without a doubt, although I doubt that’s why people actually pay for them. Only a fool would buy an F product over a Y product because the salad is slightly bigger or they have more hot fudge on their sundaes, in my opinion. What they do have, though, and I’m guessing this is the major reason they fill up in F, is very reasonable F fares.
So how can you reconcile affordable premium fares and upgrades? Well, you really can’t without making the whole plane F! Either they can make the F cabins more expensive, make the product worse and getting rid of reasonablepremium fares, or they can keep it the way CO does it, and say goodbye to upgrades on the longer flights, at least for most of us.
The problem here, again, is that CO and UA flyers have totally different expectations. At CO you almost always get what you pay for, be it a coach fare or a premium fare. United, on the other hand, you either get less than what you pay for (Economy “Minus” on a 747, for example), or you get WAY more than what you paid for with a nice international upgrade, transcon upgrade, etc. That means the set of loyal customers for each company have totally different expectations of their airlines, what they value, etc. Combining that to make most happy will be nothing short of a miracle, in my opinion.
Another issue: UA has three cabins (not counting Economy Plus) on longhaul international flights while CO has two. So which way should they go? That depends on their overall plan, but on one hand you’re pissing off the passengers that like paying for C and upgrading to a “Suite” in F where they can get real sleep, still giving UA a profit at $8,000/pop flights, or you can just have a good C product and say goodbye to F. Regardless of which way you go people will be infuriated. Man, I’m betting UA’s starting to regret starting their reconfigurations!
The one shining light is that I’m guessing a combined airline would belong to the Star Alliance, and I’m guessing they won’t restrict awards even more than United already does with Starnet filtering, so that’s one thing which I’m not too scared about, fortunately. While CO’s FF program is commonly referred to as “NonePass,” we have to remember the fact that they’re in Skyteam, which is relatively stingy with awards, partly to blame for their bad inventory.
I could go on and on but my point is this: a UA/CO merger is nothing to look forward to as a consumer. I’m guessing it will happen and in the long run it’s in the best interest of the airline industry, but we’ll definitely see some price hikes and dilution of FF benefits. Of course it’s all premature at this point, but it’s clear that consolidation will happen, but I’m really dreading the thought of this particular one.
Just my two cents for the evening.:)
PS: PLEASE keep Channel 9!
PPS: If negotiations do start to happen soon I’m betting we’ll have the Summer of Hell all over again on United…