Apr 28 2008
Mergers & Acquisitions; Oh My Hawaii Vacation!
While The Continental/United merger is at least temporarily off, I’m not sure that we’ve heard the last of this deal yet. In the meanwhile, US Airways will be United’s “official” merger dance partner.
Continental is now likely to pursue a deal with American Airlines. It is speculated that such an alliance would have the companies work together in many ways, but might not include a full merger of brands and operations.
Bottom line: With the spot prices for jet fuel up from $2.60 to $3.60 a gallon in just the past 3 months, the airline industry must consolidate and remove excess capacity in order to bring ticket prices in line with costs ASAP.
Along with the upcoming mergers, we are about to see secondary acquisitions, which are likely to include both Alaska and Hawaiian. And in addition, look for a major restructuring of Skyteam, Oneworld and Star Alliance.
What this means to you: Higher prices. Airfares have risen significantly, in the neighborhood of 25% or more, in the Hawaii trans-pacific market.
What you should do: Become an expert shopper. I’m sticking with my recommendations from Friday’s post:
- Continue to aggressively watch for capacity soft spots, competitive markets, and last minute opportunities in which to buy for less.
- Wait and exercise patience, have multiple destinations in mind, and constantly monitor price fluctuations.
- Be prepared to act quickly.
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