Posted on May - 01 - 2010
United-Continental merger may add to Memphis travel options
A new, larger United Airlines would nix Memphis bragging rights as a hub for the world’s largest airline but could eventually increase consumer travel options.
United and its proposed merger partner, Continental, are both bit players at Memphis International Airport, offering a combined 13 flights daily, all on regional jets.
Their presence pales in comparison to Delta Air Lines’ dominant position at a former Northwest hub that had 218 Delta-branded flights daily in March.
But United and Continental serve different cities out of Memphis and connect the city to top-tier destinations outside Delta’s hub structure, airline and travel experts said Monday.
In a widely anticipated announcement, airline officials announced United had agreed to buy Continental for more than $3 billion. If shareholders and regulators approve the deal, the new United would eclipse Delta as the industry’s largest.
The news came 18 months after Delta and Northwest consummated their merger agreement and three weeks after reports circulated the United was in merger talks with U.S. Airways.
“I think everyone knew this is how the movie would end, because it made a lot of sense in a lot of ways,” said Seth Kaplan, managing partner of the trade publication Airline Weekly.
Memphis airport officials put finishing touches last week on a ticket counter relocation that puts Continental next to United, airport president and CEO Larry Cox said. He attributed it to Continental’s move from the SkyTeam Alliance, which includes Delta, to the Star Alliance, which includes United, last October.
“As fate would have it, last week we moved Continental from the B Terminal lobby to the C Terminal to be adjacent to United,” Cox said.
Kaplan and Cox said travelers can’t realistically expect a United merger to yield benefits such as a long-sought nonstop flight from Memphis to Washington’s Dulles International Airport.
Kaplan said, “It’s certainly possible when they look at it holistically and as a bigger airline, they might be able to justify service together that they couldn’t before. But I wouldn’t say it’s a slam dunk. These mergers tend to be more about putting together complementary networks and things that can be cut. I don’t think they’re going into this merger saying, ‘What can we add?’”
Cox said, “I think the number of flights they have will pretty much stay the same.”
As to whether Memphis gains improved access to United hubs in Chicago, Denver and Dulles, Cox said, “All things are possible, but what will determine that is the state of the economy, the demand for service and the fares they’re able to extract.”
Dallas Minner, owner of Stress Relief Travel, thinks the merger could benefit Memphis travelers. “Memphis is dependent on the other (non-hub) carriers to keep any type of competition. AirTran is really the one in Memphis that has helps keep our fares down.”
He said possible benefits of a United-Continental merger include upgraded service for Memphis-Houston, Memphis-Denver and Memphis-Chicago flights and perhaps a regional non-stop to Dulles, which offers strong international connections.
Minner also believes a Memphis-San Francisco flight could make sense, to feed United service to the Pacific Rim.
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