WHY CONSOLIDATION OF US LEGACY CARRIERS IS GOOD FOR AIR FREIGHT TRANSPORTATION IN 2007

摘要

As has been widely covered in the press, Continental/United and Delta/ US Airways, among others, are struggling in different ways with the inevitable upcoming consolidation in the US domestic passenger business - consolidation which should have taken place in 2001/2002, following 9-11. With Southwest, Air Tran, Jet Blue, etc. currently handling 25% of the US domestic passenger market, two or more of the US domestic legacy passenger carriers' days are surely numbered. Domestic passengers on American, United, etc., continue to receive lower prices for travel than those currently on offer from Southwest, with most of the legacy passenger carriers CASM at or above .08 cents. A reduction in overall seat capacity should give all domestic players renewed pricing power, especially to non hub points. On international routes US carrier CASMs compare favorably to current European and South American CASM, with this relationship improving substantially in resent years due to US carrier restructuring, often under Chapter 11 of the US bankruptcy code.