Monday, July 5, 2010

Airline mergers and frequent flier miles.

I don't care for either.  But this article points out that both are bad.

Mergers allow badly managed airlines with high costs, to continue to compete against the smaller, well-run and profitable ones.  The result can often be seen as the failure of the smaller airlines, or the inability of start ups to...well...start up.

Frequent flier miles are bad, because they encourage people to stick with those large airlines, particularly when those business miles are an untaxed benefit.  Why don't smaller airlines offer frequent flier miles, you ask?  I'd assume that if they did install such loyalty programs, they'd either have to squeeze margins or charge higher prices, which would considerably weaken their competitive advantage (cheaper fares).

And hey, no mention of those tacked-on fees in the article, but one should take note that the largest US carriers (US Airways, Delta-Northwest, Continental-United and American) all charge $25 for the first checked bag.

I fly SW whenever I can.  Free bags, free snacks, easy flight scheduling with fares clearly shown.

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