Buy custom Why Airline Mergers Don'T Fly
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Business
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| Number of pages / Number of words: |
2 / 509 |
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That and other sweeteners could add $500 million to $600 million in annual labor costs, sources say. Plus, if Delta agrees not to lay off pilots, then it can't reduce the number of planes or routes it flies.
If a Northwest-Delta deal closes, expect to see the remaining large carriers-American, Continental, United, and US Airways-attempt similar mergers and be forced to give labor similar terms...
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And then what do you have? Bigger companies flying the same routes with the same airplanes-only now with higher labor costs. For some reason, in the airline business, people always forget that bigger doesn't mean better.
By Barney Gimbel
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