During airline mergers, two companies join together to form one larger business entity. Such an event often precipitates several changes. In many instances, these alterations can have benefited from a business and customer service perspective. This brief blog examines what some of these positive outcomes might be.
Increasing The Profitability Of The Airline Industry
The airline industry is considered one of the most expensive industries to compete in. The cost of owning and maintaining aircraft is exorbitant and the competition that exists amongst carriers gives travelers numerous options to choose from. Said circumstances often result in airlines losing money. When said entities merge, decreasing competition gives prospective customers fewer choices, which could ultimately lead to greater profitability.
Stabilizing Air Fare Charges
In an attempt to remain financially viable, numerous competing entities might resort to actions such as raising ticket prices. When mergers occur, fewer individual carriers flood the market. Ergo, the result could be the decreasing or stabilizing of airfares that render travel more affordable to consumers.
Improving Overall Passenger Experience
Data collected by the United States government suggests that the overall passenger experience has improved as a result of recent airline mergers. Records accumulated in 2013 suggested that incidents of lost luggage were at the lowest rate in nearly two decades, the industry was experiencing an on-time arrival and departure percentage of greater than 80 percent, as well as an exceedingly reduced flight cancellation rate.
Emerging Smaller And Regional Carriers
Mergers amongst large airline conglomerates have opened the door for the emergence of smaller and regionally-based carriers. Specific smaller carriers have a national presence and are committed to serving the air traveler by offering generally lower priced tickets than some of the larger airlines. Additionally, smaller, regional carriers have grown in popularity for transporting passengers on shorter trips. These companies also typically offer travelers fares at reduced or discounted rates.
Carriers Investing In Crafts With Greater Fuel Efficiency
In an effort to keep overall operations costs down, many airlines have begun investing in a fleet of more fuel-efficient planes. Such crafts do not burn fuel as quickly, which can drastically reduce the investment carriers must make in terms of items like oil and gasoline. Additionally, said action might also win plaudits from environmentally-conscious travelers.