Rumors Are Just … Rumors

Rumors Are Just … Rumors

Rumors of the demise of the airline industry as we know it have swirled around for years with minimal changes in the Big Six. But airline consolidation is truly a hot topic these days, although ebbs and flows with the price of oil, and while we profess no crystal ball or even an interest in trying to outguess the airlines, we thought we’d look at the possible scenarios that are out there and the effect they might have on frequent flyer programs.

United/Continental: We really do not see this one happening. While many see positive overlaps of the route systems, we see similarities in their approach to their frequent flyer programs, each trying to best leverage the business flyer. The similarities are there. Continental uses first class upgrades and money plus miles for BusinessFirst award redemption. United uses EconomyPlus seating and requires money from members looking to earn double Elite Qualifying Miles the last part of 2006. That part might make sense, but if this were to happen, it’d have the be the young bucks in Houston pulling the trigger on United, not the other way around that most people assume.

United/Delta: This one is actually of interest because Delta may not have what it takes to execute their business plan. But despite the fact they have been partners in the past and know each other well, both Chase and American Express have funded huge bucks to keep them going and we’re not convinced it will be that easy for one of these credit card partners to step aside. But then, there’s plenty for them to share.

US Airways: We watched with awe as Doug Parker worked a miracle to save another airline and while we like the way the guy operates, it might be asking too much for him to take bite of another airline. We’d rather his team make sure that FlightMiles/DividendFund lives up to its potential.

Northwest/Delta: Okay, everyone we know tells us this will happen since misery loves company. It really is no fun being in bankruptcy, and despite the fact their current financial situations make sense for this to happen, there is no clear leadership from either side that could make this work. It would take an outsider to make this happen — someone who could lead — and get along famously with the staff.

Rather than speculate what the Big Six might do, we enjoy looking at the junior varsity and wonder what might become of a Frontier/JetBlue merger with EarlyReturns clearly being the dominate frequent flyer program.

And who is to say that Alaska Airlines might not be in play? Since global alliances have hamstrung American domestically, could it be that American would entertain acquiring Alaska and leave Delta to go back and continue their play with Continental and Northwest? Shades of RenoAir, but totally in the style of American Airlines.

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