Hugh Neeld: The Curmudgeon Report

Anyone who has taken a domestic flight in the US is used to delays, but nothing like the time that investors have been kept on the tarmac, waiting for the take-off of much-needed consolidation among US airlines. It could happen soon.

Delta, the third-largest passenger carrier in the U.S., is in merger talks with Northwest, the sixth-largest, in a deal that would turn it into the world's No 1 carrier and create a financially sustainable business for the first time in a generation. It could also trigger a round of other merger deals among worried competitors, and might finally mean that U.S. airlines do not have to swing between bankruptcy, meager profitability and then back to bankruptcy.

Combining some of the biggest players in a fractured market, where even the leader, American Airlines, carries barely 15 percent of domestic passengers, could give the airlines a chance to rationalize routes, end a perennial fare war, and drive down costs. The question is, will it really happen? Some lawmakers are concerned (you know how they worry about us) that the mergers will hurt flyers by reducing competition. But not everyone feels that mergers are the final answer.

A recent feature story in my favorite newsletter, Unstable Sources, was about a small, new upstart carrier called Fair-To-Middling Airline. FTM recently ran full-page ads in major market newspapers announcing a fare schedule that has the big carriers sweating.

Milo Bankshot, president of the airline said, “As an example of our new pricing, we’ve lowered the price on a one-way ticket from Los Angeles to New York to $52.”

The announcement has sent tremors through the industry as FTM lays plans to capture more and more of the market.

“Our engineers have found that, by cutting frills, we can lower our costs dramatically,” Bankshot explained, “and we’re passing those savings right along to our customers.”

Although reluctant to give details, Bankshot did say that the new approach will save on things like fuel, flight attendants, peanuts and even airplanes.

“As you know,” Bankshot said, “planes are one of the largest expenses we have in this business.”

Bankshot is known as a street-smart operator who likes to wisecrack. Between heart surgeries, he pursues a vigorous lifestyle, which includes a 20-year-old wife, eating red meat, smoking three packs of cigarettes a day and playing four rounds of golf every weekend. Stockholders in the airline have voiced concern over some of his ideas, such as letting passengers pick their pilots by majority vote.

“Why not?” he says. “It’s their money. Why shouldn’t they have a say?”

Bankshot is confident the new airline will succeed.

“We’ve eliminated both coach and first class, allow smoking, and our customers can bring aboard whatever they can carry,” he said. “At our new rates, passengers have a choice of flying either Slingshot or Catapult with greatly improved leg room.”

Bankshot says that inaugural flights will start soon.

I’m no expert on the subject, but it seems to me that the politicians’ fears of mergers eliminating competition are without merit. All my friends, however, don’t agree. I showed the story to one of my golf buddies, who is a retired pilot for American Airlines, and asked him what he thought. He said he didn’t want to get into a conversation on the subject, and suggested I cancel my subscription to Unstable Sources.

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A question to ponder:

Did you ever wonder how you got over the hill without getting to the top?

putterhugh@suddenlink.net

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Hugh Neeld is a freelance columnist for TylerPaper.com.

Hugh Neeld is a freelance columnist for TylerPaper.com.
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