WSJ OpEd on UA/CO: Does the Journal Understand the Industry at all?

Read today's Wall Street Journal OpEd here on the impending Continental/United merger and then ask yourself if the WSJ has a clue about the airline industry.

The Journal's points supporting the UA/CO merger are well founded, however their knowledge of the airline industry appears to be quite flawed.

First, United and Continental have limited "overlap" across the North Atlantic. In fact, there are zero routes where both airlines operate head to head. They fly to many of the same cities in Europe of course, but not from the same cities in the United States.

Virgin America is no longer "under attack to provide its 'U.S. citizenship'," this was resolved many months ago with a new influx of capital and the departure of the previous C.E.O. Not was the compliant filed by "Air Alaska" - there is no such airline. Alaska Airline or Alaska Air Group, yes, but not "Air Alaska" anymore than France Air or Blue Jet. Oh, and Alaska Air is NOT a low cost carrier along the lines of Southwest and JetBlue as intimated.

JFK is not able to expand landing slots because there is simply no more runway capacity at peak times - this is why they are called landing slots. Short of adding new runways, as O'Hare has done, adding more slots and, hence, flights is a very poor idea - flown out of JFK lately?

Similarly, airports do not add more air traffic control technology as you suggest - this is not something local airports can go out and buy. It is the responsibility of the FAA to improve our creaky ATC infrastructure - something which must be done soon.

These miss-statements unfortunately leave this opinion grounded.

P.S. - If you are not a WSJ subscriber, simply drop "Mergers in Midair" into the Google and voila, you can view the whole OpEd for free.

Continental: No More Free Lunch - Probably for the Best

Continental Airlines, which has made considerable marketing hay about the fact that they still served airline food for free, has decided to drop the practice.

Clever Continental advertising pieces like these will need to be re-worked a bit but free (airline) food can't be as big of a draw as other airline purchasing influencers such as price, schedule and frequent flyer program.

Back when other airlines began imposing baggage fees, Continental was among the last of the airlines (save Southwest of course) that opted to begin charging for checked baggage. We are told that Continental was looking for signs of share shift away from airlines that were adding baggage fees. Alas, no share shift was apparent so ultimately Continental decided to match the other mainline hub and spoke carriers and enjoy the revenue benefit.

Similarly, it has probably become impossible for Continental to show any share-shift (and resulting revenue gain) from continuing to serve food. In fact, they may have actually been at a disadvantage as some carriers have started to really sell some good food.

From recent first-hand experience, we can report that while free food on CO was nice, it was certainly nothing to write home about. In fact, some of the buy-on-board food has become so good (particularly on Delta) we'd actually prefer to pay a few extra bucks and actually get something that is fresh, healthy and tasty. Or not.

So, we'll see some costs come out and, hopefully, some nice ancillary revenue gains - Continental is projecting about $35M in improved revenue and cost savings - and that's a lot of sandwiches.