Newspaper article The Christian Science Monitor

Airline Mergers, Alliances Could Send Prices Sky-High but to Spur Competition, Senate Is Poised to Pass a Bill to Givelow-Fare Start-Ups Better Access to Major Airports

Newspaper article The Christian Science Monitor

Airline Mergers, Alliances Could Send Prices Sky-High but to Spur Competition, Senate Is Poised to Pass a Bill to Givelow-Fare Start-Ups Better Access to Major Airports

Article excerpt

Passengers holding American Airlines tickets for the long weekend ahead can breathe a sigh of relief, now that most of the company's pilots are back in the cockpit.

But some aviation experts see trouble ahead. The cost of American's acquisition of Reno Air - at the heart of the dispute between American and its pilots - could signal the beginning of a trend that in the long term could increase consumers' costs and limit their choices.

Just as most small, low-cost airlines like Reno are again becoming profitable, and several new start-ups are entering the market, some of the nation's largest carriers are aiming to gobble them up. At the same time, the major airlines are creating strategic alliances in an effort to consolidate their clout, not only between themselves, but also with international carriers. "Are we worried about the impact of all of this consolidation? Absolutely," says David Stempler, president of the Air Travelers Association, a Washington-based passenger advocacy group. The move to consolidate is happening even as the US Department of Transportation (DOT) and Congress are working to make it easier for new airlines to enter the market. The Senate is poised to pass a bill that will make it easier for new airlines to gain access to some of the largest US airports. "One just needs to look at how last year's Northwest Airlines strike crippled an entire region of our country," says Sen. John McCain (R) of Arizona, the bill's sponsor. "We must give new carriers the opportunity to compete with the major airlines." Reno Air, a low-cost start-up, was competing successfully until last December. That's when it was bought by American Airlines. Reno was able to keep its prices low, in part, because its senior pilots earn about half the salary of American's senior pilots. This week's dispute was sparked by the insistence of American's pilots union that Reno's aviators be brought up to scale sooner, rather than 18 months later, as the company would prefer. …

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