Is it wrong to
thing think that someone who is the assistant managing editor of TIME and directs the magazine’s coverage of business, the economy, personal finance and sports might actually understand something about business? Or at least if he is going to write about the airline business that he might understand it? Because apparently Bill Saporito is writing about the impact of airline mergers on customers and doesn’t seem to know much about the industry at all.
Under the headline “The Sky-High Price You’ll Pay for Airline Mergers” Saporito addresses the potential impact of the merger on consumers. Sortof. His base claim – mergers lead to higher fares and that is bad for consumers – is arguably valid. Certainly higher fares are more likely though I’m not necessarily going to concede the part where that is bad for the general public. But much of the “story” he filed on the topic is somewhere between ridiculous and outright false. From the very beginning he misses badly:
The Motor City once harbored hub dreams and built a new Detroit Metro airport to fulfill that desire. Then, you know, the U.S. auto industry wrecked along with the rest of the economy. And airlines went bust before autos, sending Northwest, Detroit’s home team, into the arms of Delta, another bankrupt. Detroit Metro got downgraded to a spoke rather than a hub and lost a ton of flights.
Except that DTW is not a spoke for Delta. It is a major hub in the carrier’s operations with nearly 500 daily flights to more than 130 destinations. So, yeah, not really with the being downgraded to a spoke.
Saporito continues on to complain that there are no competitive fares for a trip from New York to Detroit with less than one week’s notice. Spirit actually has decent fares but he doesn’t like their schedule. Somehow that is the fault of mergers, I guess?? There are cheaper options with one stop; it is not clear if he took the connection or paid extra for the flight.
He also seems to ignore history. More than a decade ago I used to commute between NYC and Minneapolis for work. The tickets cost $1400 round trip. And that was with several more airlines competing in the market. Today a similar trip is pricing around $1000 for the non-stop flights despite the fact that there are fewer carriers in the market. Detroit isn’t even one of the worst airports for average fares in the USA, not by a long way. Oh, and earlier this year he was happy to suggest that allowing the merger wouldn’t really make things worse.
Yes, airfares have gone up a bit lately in real world dollars but to blame that exclusively on mergers is to do a very, very, very bad job of telling the whole story.
Less competition does mean generally higher fares. But that’s not the whole story. It is not the only reason fares go up and it is not the only metric by which value to the traveling public should be measured.
Lots of things about the in-flight experience are getting better, both in economy (better meal & IFE options, even though some are paid) and in premium cabins (just look at the transcon products on the horizon). But none of that matters because a fare which has always been high remains high and that’s something serious enough to touch off a rant from someone who has been around long enough to know a lot better. At least he should.
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