Four Airline Mergers In Ten Years Haven’t Raised Fares
Categories: Industry News | News
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Mergers Haven't Caused a Fare Increase
The mergers that have swept the U.S. airline industry in the last decade may not have been as bad for passengers as some travel watchers predicted.According to a new report by professional services firm PwC US, who analyzed the effect that consolidation has had on domestic fares, competition and airline performance, the mergers have not raised fares.
There have been multiple mergers in the U.S. airline industry: US Airways and America West in 2005, Delta and Northwest in 2008, Continental and United in 2010, and Southwest’s purchase of AirTran, which was completed last year.
But instead of fares dramatically rising across the board, the report’s review of federal transportation data found that the average domestic ticket price rose 1.8% a year from 2004 to 2011.
That’s not to say there weren’t fare surges on some routes, says Jonathan Kletzel, leader of the transportation and logistics practice for PwC US.
However, he says, the perception many have that the spate of mergers resulted in a sharp increase in airfares is wrong. “We just don’t see that in the data,” he says.
The wave of mergers has also not reduced flight choices on various routes, the report says.
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