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Travelzoo President Shirley Tafoya on how the merger of US Airways and American Airlines will impact the industry and consumers.
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A lot of -- great big merger today American Airlines -- US Airways on track to become the world's largest airline.
With a market dive a whopping eleven billion dollars company executives say they could save a billion dollars a year by 2015.
And at this -- line listen to what US Airways CEO Doug harper tells new computer and an interview that is nearing break here tonight at 8 PM.
This -- great for consumers over 900 -- -- -- -- -- airlines only twelve wage and have overlap.
This is this this is a merger we've continued -- -- two airlines.
And applied to more places for more people.
-- -- The pros and cons is surely to point out president of travels you North America.
Think about this I mean how shake out first of all react to what you just heard how to shake -- for the businesses what's the prose what are the pros.
I think.
It -- the president is at you know I mean just overall.
The industry was just bound for a correction it really needed on to get healthier and airlines needed to get healthier.
So overall for the businesses it's great because they'll now have the opportunities create a much stronger airline.
And and with that comes more investment in the product which is always good for the consumers.
And also what I'm hearing you say -- if they're healthier and -- stronger that means more leverage higher prices better margins.
That's great for their shareholders bets that's for kids are right.
Well you know I thinking this is a little bit.
Different and I think -- That -- Doug Parker just said it was you did it.
The synergies between these two airlines is very different than some of the mergers we've seen in the past.
In that there's only twelve overlapping routes so the so out of nine -- red out of 900 you've got twelve overlap -- -- -- -- -- you're you're you're gonna create.
And much more service.
An opportunity for -- Before trial -- -- I -- point let's explain to our viewers what that means so if there's very little overlapping.
It means for example if -- flyer -- your flight gets canceled.
If you have a bigger map overall there's a better chance that you're today.
Find another way to get where -- going.
And also means that less things will be eliminated as a results because of -- of twelve or -- -- probably filming eliminate eighty -- twelve maybe even fewer.
Exactly exactly I mean maybe small communities we'll see I'm a little bit of a pull back as result of this merger.
But for the most part you're gonna have more serviced.
And the ability to as you said and take additional flights if you miss your flight I think also from a consumer standpoint.
The amount of low cost carriers in the market and the -- ability to expand is also keeping needs major airlines -- -- So those two I done I think will.
Will help keep fares stabilized in the market I just don't -- -- Does stick out consumers always feel like it there's less competition you as the buyer just have less leverage you know you have fewer choices out there.
Because there are fewer airlines all the way around.
So they're gonna treat you worse I mean it is that the reality here is that just our perception.
You know I think I'm if you think of airline service today there's really not a lot of service that goes into -- -- It it really has become very fair balanced and I think what airlines have created is that you -- pay for the services that you want.
Which which it gives you a little bit more choice as a consumer.
So.
You know eat it in historical and even when you look in the past years the Nate -- -- major mergers that it happened.
Between 2004 and 2011 the prices of -- have not risen without much -- around 1%.
-- year over year or so again the low cost carriers do keep this intact yeah and I think for the consumers having a stronger airline.
-- means that they will invest in other things rather then.
Tried to continuously cut things -- you you mentioned in the low cost carrier and they are still out there and it strikes me that that maybe one business -- is that as this airline gets bigger because it's -- airlines together.
That the individual guy.
Has is even more nimble he is even more ability to come in and cut against these guys he's a little airline is that the case.
Yes exactly they wanna be competitive -- expanding you look at airlines like a -- and virgin America.
Who came in with a drastically different product especially average in America.
And they've been able to expand into major cities and create choice for consumers okay so in in my -- that's you know that that's with -- that that's with these types of -- bring aren't -- great.
-- thanks so much and be sure to catch -- tonight 88 -- for the rest of deals interview with the CEOs of both.
American Airlines and US air you don't want to -- this.
