Spring break plans: merger ups flight prices




As spring break approaches, sophomore Olwen Menez and her family looked into taking a trip to California. However, the trip never came to fruition. The reason: the ticket prices were too high to afford.

Two major airlines, American Airlines (AA) and United Airways (UA) have merged, and while this means the joint airline is now bigger and more economically stable, consumers will see a rise in airline prices and fewer services, according to the Consumer Travel Alliance.

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David Good, IU Associate Professor and Director of Transportation Research at the School of Public and Environmental Affairs (SPEA), said he attributes the flight price increases to less competition between airlines.

“The number of airlines that started in the U.S. is in the hundreds. Now it’s down to a relatively small number, and they’re just merging and going bankrupt,” Good said. “The thing that the airline industry has always had to contend with is competition, which tends to make prices for consumers low, but it also makes it very difficult for airlines to make any money. When you’re merging together airlines, you’re going to end up with less competition, more financial stability (for the airline) and higher prices for consumers.”

Sophomore Madison Ross, who plans to fly with her family to Florida for spring break, said she saw a more than $100 increase from flight prices last summer.

“It’s definitely going to put us on more of a budget this year,” Ross said. “We’re not going to do a lot of the activities that we normally do.”

Ross said while these price increases will put her family on a tighter budget when traveling, they are not likely to travel less.

Good said he predicts that ultimately, passengers will have fewer flights to choose from and that means less flexibility in when they want to fly.

“Eventually, they’ll cut out a flight here and there and this will lead to a new airline that has fewer flights than those of the two airlines added together,” Good said.

AA has been in bankruptcy for 18 months and this merge will financially stabilize AA, according to Good. Additionally, UA has now gained a highly desirable hub by merging with AA. As for consumers, Good said the main benefit is stability in knowing that the carrier they fly with is going to continue.

“When a carrier goes bankrupt, usually nothing bad happens right away, but it gets to the point where the carrier has to shut down, and that causes major disruptions to people,” he said.

According to Consumer Travel Alliance, another consequence this merge will impose is reduced services.

Menez, who visited Florida during Presidents’ Day weekend, flew on AA and said she noted only one flight attendant instead of two.

“(The staff workers) tried their hardest to keep up but you could tell they were rushing to do everything and they were on edge,” she said.

Menez said this merge has put a damper on her spring break plans and will likely affect future travelling plans.

“We probably wouldn’t be able to go on vacation as much.” she said. “But we would probably go closer places or start driving.”