But Airlines Will Be Smaller, And Charge A Lot More
We've been hearing for months how mergers among the legacy US
airlines to create fewer, larger carriers is an important strategy
for surviving runaway fuel prices. If bigger is better, what hope
is there for the smallest of the major US carriers, US Airways?
After all, US Airways CEO Doug Parker has been rebuffed twice
recently in merger attempts, first with Delta, then with United.
Does this mean US Airways is on the ropes?
Parker recently agreed to be interviewed by the editorial board
of the Philadelphia Inquirer. A US Airways collapse would be a big
deal in Philly, which Parker says is the airline's largest market,
the one which generates the most revenue, and an important gateway
to profitable international routes.
Despite some industry prognostications that US Airways could
soon go the way of the dodo, Parker defiantly told the paper, "If
there are other airlines whose strategies are based on US Airways
going away, they'd better find a different strategy. There is no
imminent risk. We have thankfully done a good job of generating
cash and saving it."
He added that the recent e-mailed letter signed by 12 airline
CEOs has been successful in motivating Americans to pressure
Congress to reform the oil markets and regulate market
Parker also told the editors what our traveling world will be
like if oil prices continue their rampage. He says airlines will
start collecting $650 to $700 per passenger for a ticket. Planes
will fly primarily to big cities, and not a lot of small
communities. Air travel will be a throwback to the era before
deregulation, once again becoming a luxury.
Despite what he calls the worst crisis to face the industry in
the 22 years he's been involved, Parker predicts, "The industry
will work it out, and there will still be six of us, but six