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Coverage of Airline Mergers
Giving "Artificial Intelligence" A Whole New Meaning.
Summary: A lot of the coverage of the AS/HA and B6/NK transactions are based on inaccurate assumptions, concocted by folks who often are completely unqualified. Yes. Unqualified.
In the swirl of media coverage around the proposed mergers of Alaska/Hawaiian and of JetBlue/Spirit, the usual suspects in veneer airline reporting and shallow-end industry analysis have been babbling about a subject which they apparently know little about. Misinformation is front-and-center.
Attention! Ancient Merger History Isn’t Indicative. Most of the observations made by the consumerist Peanut Gallery tend to be in the context of relating to the mergers that took place 35-40 years ago, with no understanding of the current air transportation system.
One critical point to keep in mind is that this is not the airline industry of the 1980s. There is no question that back then TWA taking over Ozark did reduce competition. Northwest/Republic, USAir/Piedmont, ditto. And others. But that is not where the air transportation system is today.
The two deals on the table have to do with restructuring, not slashing overlapping routes to cut capacity and zap consumers. Actually - and to the expected guffaws from the “consensus” - they both are focused on increasing competition and options, not slashing capacity.
‘Course, this is something that the DOJ and their consumerist lapdogs fail to recognize, because, truth be known, they do not have the expertise or qualifications to pass on these transactions.
Oops. That’s pretty stringent.
But look at the positions and statements made by the DOJ. Then compare them to the testimony from the carriers involved. These airline executives were sort of in the same position of trying to explain fractal geometry to inhabitants of the inner Amazon.
What is dismally obvious is that some of the media coverage – from mere reporting based on airline press releases, to righteous “investigative” exposés from the Ken Cute-And-Barbie Airhead Channel 4 Consumer Crusader Team – are accomplished by people who couldn’t tell the dynamics of the airline business from what goes on at a hot dog stand.
Let’s take a quick look:
The “Professor Knows Best” Sources. Yessir, pick up the phone and dial one of the several university professors who’ve become the media’s go-to guys for doggerel about the evils of airlines, outrage of deregulation, the “outdated” hub-and-spoke system, not to mention the slave-ship levels of customer service carriers inflict on the public. A couple of them might even do an annual report on the subject.
Last week there were a couple of these “experts” quoted, stating unequivocally that fares will go up with the Alaska-Hawaiian merger. Just the blanket statement. They’re accustomed to doing this in the classroom, apparently. And, they’ve got titles and letters after their names, too.
They give academia a bad name. Yet another reason home schooling should go beyond the 12th grade, maybe.
The Trendy Cause Célèbre Approach. Another dynamic we’re seeing is the gadflies in some media corners using these potential mergers as easy platforms to go off on wild-idiot-chases that have nothing to do with the matter at hand.
There have been a couple of pieces, such as in the New York Times, where all sorts of trendy myths get injected into the dire reasons to stop these deals.
Take a gander. There are the throw-away lines about US airlines reducing the width of passenger seats – an observation repeated even by some supposed prestigious travel magazines, but which is totally false.
Then, they can’t let go of how these airlines inflicted specific “sit together" fees for families. Another gigantic misrepresentation of the truth. The ancillary fee fiasco is also fertile territory. Going on further, there might be a reference or two to the one-off Southwest melt-down last year.
All of which are somehow prima face evidence that these merger transactions should be shot on sight.
None of this babble has anything to do with the mergers on the table, but it’s great stuff to mislead the public, particularly regarding the qualifications of the people publishing this stuff.
Finally, there’s the leper’s bell of incompetent reporting. As soon as you see it, stop wasting time reading on. This is when some clown contends that there’s too much concentration in the airline industry, proving it with statistics that sound great but are completely dishonest.
Like, how “American has captured 80% of the flights at DFW” or “United dominates the flights at Newark” – with the conclusion that we need to let other airlines operate more of them to increase competition.
Only a media reporter just back from a vacation on Pluto would make such a statement. It's as stupid as demanding that other vendors be allowed to sell underwear in Neiman-Marcus stores, based on the observation that N-M has a monopoly there.
AA and United and Delta operate most of those flights with the hub feed they create. But facts and truth aren’t necessary in some airline reporting – even occasionally in the aviation media.
Bottom Line – DOJ Is Playing Politics. Not Facts. The truth is that the AS/HA deal strengthens the entire operation of Hawaiian, which has been dependent on the fragile leisure market to the Islands. The B6/NK proposal will allow B6 to grow and compete more aggressively with the four network carriers - AA/DL/UA/WN. The rest of the consumerist stuff ignoring this are, frankly, anti-consumer.
Message: Caveat reader.
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