What do you guys make of this?
With more than 1, 000 American Airlines flights being grounded because of emergency inspections, three small carriers going under, and now the announcement of a possible merger of Delta Airlines and Northwest Airlines, it's been a wild couple of weeks for the friendly skies.
And some of what's taken place has many - Northwest Arkansas Regional Airport Executive Director Scott VanLaningham included - wondering and even fearing what all of this will mean for those who depend on air travel for work or leisure.
"The American Airlines cancellations is one of those things that happens," Van-Laningham said. "You have to do those inspections. They've done that, and now they're up and running again. The bigger deal is going to be this merger, particularly if there's going to be another round like many are predicting, where we end up with three giant carriers rather than five or six medium-size carriers. That's really going to affect prices."
According to a release issued by Delta Airlines on Tuesday, Delta and Northwest Airlines announced "an agreement in which the two carriers will combine in an all-stock transaction with a combined enterprise value of $ 17. 7 billion, creating America's premier global airline. "Combined, the company and its regional partners will provide access to more than 390 destinations in 67 countries. Delta and Northwest, together, will have more than $ 35 billion in aggregate annual revenues, operate a mainline fleet of nearly 800 aircraft and employ approximately 75, 000 people worldwide. Several union groups and politicians from Minnesota, where Northwest Airlines is headquartered, are attempting to roadblock the merger, according to reports.
Several reasons were outlined for the merger in the release, including that it's believed to be "the most effective way to offset higher fuel prices and improve efficiencies, increase international presence and fund long-term investment in the business. "The release states that fuel costs for Northwest and Delta have risen by approximately 70 percent in 2008.
Delta and Northwest-affiliated NWA Airlink / Mesaba both serve XNA. Delta offers daily flights from XNA to Cincinnati and its main hub in Atlanta, while Northwest flies to Memphis, Minneapolis and Detroit. Since no other carrier at XNA currently flies to those destinations, VanLaningham does not anticipate that the announced merger will eliminate those options from the Highfillbased airport. But the merger and others rumored to be on the horizon, combined with the announcements that rising fuel costs have led to the demise of ATA, Aloha Airlines and Skybus in recent weeks, could eliminate considerable competition.
"It's not a good time for the airline industry - and a lot of it goes back to fuel price," VanLaningham said. "The other thing is the downturn of the overall economy. There are a lot of people out there asking themselves, ' Do I really need to take this trip ?'"
XNA already has felt the impact, with Delta eliminating its direct flight from Highfill to Salt Lake City earlier this year. According to VanLaningham, American Airlines has indicated it will eliminate its daily flight from XNA to Raleigh / Durham, N. C., in May, as well as its direct flight to Miami in June.
"Those are primarily leisure destinations, and with the way things are right now, they're just not making money," VanLaningham said. "The positive for us is that XNA does a high volume of business travel. There are different ways to conduct business these days with video conferencing and other options, but you still need to sit down one on one with a lot of business deals, so business travel will continue."
