Q. United and Continental have announced a deal to merge and create the world’s largest airline. What’s the likely impact on passengers if the deal goes through?
A. United says the merger would mean “superior service” and “expanded access to an unparalleled global network.” Strengthening of wobbly company finances, better job security for employees and continued service to small communities will be other benefits, United promises.
But George Hobica, president of the consumer website Airfarewatchdog.com, sees higher fares at least in the short term, the result of two competitors joining forces. The merged carrier might charge more on generally less competitive routes as well as ones linking current United and Continental hubs, such as Newark-Los Angeles, Cleveland-Chicago and Denver-Newark. Don’t be surprised, Hobica adds, to see other airlines boosting fares on these routes as well.
Fees charged by the merged airline for such things as checked bags might also head upward, according to Hobica: “It’s likely that any higher fees on United will be adopted on routes flown by Continental, as happened when Delta merged with lower-fee Northwest.”
As for frequent-flier accounts, stay tuned. Some industry specialists predict that you’ll be able to merge separate accounts from the two airlines. If you’ve got low balances at United and Continental, you might have enough for a ride on the new airline if the accounts are pooled.
Concerning frequent-flier miles, you might do well to use them sooner rather than later. The California Society of CPAs says carriers in general are likely to continue cutting back the number of planes on major routes, resulting in fewer available rewards seats.
Also, if you’re shopping for a miles reward credit card—from any airline—do the math first: If the annual fee is $80 and it takes you three years to earn a coach ticket, the real cost of the “free” ride is $240—possibly more than the cost of a round trip on a low-fare carrier.
Various approvals—from shareholders, for instance—are still pending. United predicts that if things proceed as planned, the two airlines could become one in the fourth quarter of this year.
Sid Kirchheimer writes about health and consumer issues.