n a move that has shaken up the air travel industry, the boards of United and Continental Airlines agreed on Sunday to merge their companies into one. If approved by shareholders and antitrust regulators, the $3 billion deal would create the world's largest airline (to be called United) and potentially allow for significant cost savings. But what will it mean for travelers? (Watch an AFP report about the airlines' merger)
Get ready for higher fares: Competition is a key factor in keeping ticket prices down, says FareCompare.com CEO Rick Seaney, as quoted by ABC News. So, by folding together two former rivals, this merger "is likely to send airfares skyward." And with bookings gaining strength, fares were already set to rise — "the question is how much"?
"United-Continental merger could 'send airfares skyward'"
Fliers will have more limited choices: United and Continental have 13 overlapping routes, say Jad Mouawad and Michael J. de la Merced in The New York Times, and they'll be able to eliminate some flights on those. While that will help the new United's bottom line, it will give "travelers fewer options."
"United and Continental announce merger"
There are some upsides as well: Sure, fares will jump in the first year, says Sean O'Neill at Budget Travel, "especially on routes that serve smaller cities." But eventually prices will fall again as "low-cost carriers like Southwest will swoop in and serve these markets." And while planes may get more crowded as flights are eliminated, connections will be easier when the old United and Continental routes are run by the same company.
"United and Continental may merge. But should they?"
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