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Continental and United to Merge – Good for Passengers?




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United and Continental to Merger

Reading today that Continental and United have decided to merge, with the United nameplate being held as the final company name. I have personally had far superior service with Continental than with United, but there is hope because the CEO of Continental will be in charge of the combine company if the shareholders approve the merger (sometime in September).

So how does this affect bargain shoppers?  Continental and United say that this merger will not create a chance for the company to further pressure airfares upward (or downward in a perfect world).  But with just 4 major carriers in the US after the merger, then the opportunity to pressure pricing does appear to at least be easier than before.  And the fact that the combined United-Continental will be the largest carrier in the US further strengthens the opinion that they will have a great say in standard airfare pricing.

Just on a whim, I checked Kayak.com for the going rate on a flight from Memphis to San Francisco to see what pricing was available for a flight on May 17th and returning May 24th.  Shown below are the samples with airfare sorted from lowest to highest:

  • US Airways:  $426
  • Delta:  $455
  • Continental:  $473
  • United:  $473
  • American Airlines:  $476

The difference among the 5 airlines shown is only $50 total, and the budget shopper might just go for the US Airways price, so I can't say that the merger will allow for any real price changes on just this small sample.  Maybe the difference would be more noticeable out of Chicago O'Hare:

  • Delta:  $281
  • US Airways:  $330
  • Continental:  $339
  • United:  $339
  • American:  $350

The first thing I notice here is that it must be nice to fly out of a larger airport than Memphis!  $120-$140 per ticket savings would be awesome, so for those of you living in Chicago, you sure have at least one perk!  Other than that, you notice that aside from US Airways and Delta swapping the cheap end of the bargain, the other 3 airlines stay in line.

So what I've learned here from this merger discussion is that the bargain shopper is probably not going to all of a sudden start flying United, and United is probably going to try and maintain the price structure they have in place:  They like the middle with their prices, and will probably try and stay there after the merger.

What do you think about the merger?  Check out your local airport against tickets to other locations and see how the prices stack up,  then let me know in the comments below what you find out!

Read the AP Article on the United-Continental Merger.






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