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Merger Worries Rise


Airline changes may cut choices

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Feb 19, 2008

Boston area air travelers could be in for some turbulence if the airline industry experiences a wave of consolidations, which appears inevitable.

Delta and Northwest airlines - both of which fly in and out of Boston’s Logan International Airport - could announce as early as tomorrow that they’re merging to create the nation’s largest airline, according to published reports.

The prospect of a Delta-Northwest giant would likely spark “counter strategy” mergers among other airlines, including American, United and Continental airlines - all three of which have a major presence at Logan. United has reportedly held advanced talks to combine with Continental, though every major airline is said to be exploring mergers.

The mere talk of mergers makes some within the travel industry nervous about higher ticket prices and fewer flight options.

“It’s bad for consumers,” said Kathy Kutrubes, owner of Kutrubes Travel in Boston. “We’re going to have fewer and fewer choices. It could end up costing people.”

A combined Delta-Northwest would instantly make it the largest carrier at Logan, controlling more than 20 percent of all flights.

“It’s bound to affect flight schedules everywhere, including Boston,” said Albert Foer, president of the American Antitrust Institute. He said any merger could draw attention from regulators both in the United States and abroad.

But other experts noted that Delta and Northwest have no route overlaps at Logan, while other carriers share few scheduling overlaps.

They added that low-cost carriers such as JetBlue [JBLU] will keep pressure on airlines at Boston to keep prices down.

Experts also noted that Boston is a so-called “origin” destination, meaning it’s in high demand for flights even without Logan serving as a major hub for airlines coming and going to other locations.

“This is not going to have a major impact on Boston,” said Terry Trippler, an aviation expert in Minneapolis.

Still, any merger could lead to major terminal changes at Logan, one industry source said.

Delta is now housed at Logan’s Terminal A, while Northwest is located at Terminal E.

American Airlines [AMR], which some see possibly taking over Continental if a consolidation-wave breaks out, is located at Terminal B, while Continental is at Terminal A. United, another potential suitor for Continental, is in Logan’s Terminal C.

bostonherald.com

Airline changes may cut choices
Mark Garfinkel



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