Continental doesn’t like United anymore, but is sorta into the oneWorld alliance headed by American Airlines and British Airways. American Airlines is interested in that, too, but simultaneously also has its eyes on US Airways. United, having just been dumped by Continental, is looking to rekindle an old affair it had with US Airways, too, but now has to worry about American Airlines, which is sidling up. All the while, Delta and Northwest are not a done deal, and with unions getting crankier about the merger, who knows what will happen. And those two, already allies of Continental in SkyTeam, are feeling slighted that their longtime partner is considering joining another clique.

This is all so freaking high school.

I’m not a fan of these mergers, but I realize that this isn’t about consumers, and the fact that none of this will improve prices or service. It’s about companies with unsustainable business models trying to eke out enough corporate life to survive until the CEO retires with huge pay package.

Just get it over with.

Related:
- Mergers: Are your miles safe?
- Reader mail: What will airline mergers mean to consumers?

Mergers, acquisitions, airlines shutting down, and miles… People are clearly (and understandably) nervous. A question in the comments on the last thread:

How do mileage programs work during mergers and stuff. I’m pretty deep in the United Airlines Mileage Plus program, but if United/Continental goes through, what happens to those of us that are in the program? Please share if you know…

Well, there are no guarantees in life, but historically, merged airlines have combined miles into one program, with no immediate loss. Note the word: immediate.

If you exclude Southwest and JetBlue (which offer points or credits rather than miles) most airlines’ frequent flyer programs have a similar currency with a similar redemption schedule. Not the same. Similar. Granted, there are differences between programs, but, say, American, United, and Delta all give you a base rate of 1 mile for 1 mile flown and charge 25,000 miles for their average capacity-controlled “saver” domestic award.

According to press releases, Northwest miles will be incorporated into the Delta program 1:1. So far so good.

But make no mistake: Down the line, you’ll lose. Mergers will result in diminished flights — older planes won’t be replaced, unprofitable routes will be retired, and the airline executives’ mantra of “overcapacity” will finally be answered with capacity reductions. But all the miles in the frequent flyer programs didn’t decline in capacity. If anything, they increased in number. So a boatload of miles will be chasing fewer and fewer award tickets.

It’s an inflationary scenario. Unless a miracle happens, going forward, the cost of “free” tickets will go up. Fees will increase. And all that means is your miles will be worth less.

Add to that the fact that such inflation is already underway, even without the mergers. Things don’t look good for miles.

To the reader’s question re: United and Continental, I would expect the same as above. I don’t think you have any immediate worries, but long-term worries are sensible concerns.

Bottom line: Start spending your miles. And if you work for it, you can still get decent value. (My yardstick is still an aggressive 1.7 cents/mile or better. Anyone who repeats the conventional wisdom that you should only count on 1 cent per mile — or worse — isn’t trying hard enough. If they were a financial advisor, it would be like proudly earning you 2% a year. Fire that advisor.)

Merger speculation is no longer speculation
It’s on. Delta is officially offering 1.25 shares per Northwest Airlines share, a 16.75% premium over closing prices of DAL and NWA, respectively. Important to the success of the merger: The pilots’ union, ALPA, gets a seat on the resulting airline’s board and 3.5% equity in the company. The result, if it passes shareholder votes, is the world’s largest airline.

Up next: Continental-United. It’s going to happen, though nothing is official. Northwest’s linkup with Delta makes it possible, since Northwest held a “golden share” of Continental stock and could nix a merger if they wanted. Sigh. With several airlines folding in the past weeks, and with one or two mergers coming up, competition will (at least temporarily) be reduced significantly. Watch for prices to rise. But will rising prices kill demand?…

Who will be next to fall?
Chris Elliott may be making book on which airline will fold next, but it won’t be Virgin America. (I put an exacta box on Alitalia and SunCountry, with a side bet on Mesa and a long-shot on VA. The latter bet may be down the crapper. Thankfully, no money changed hands…) The Branson-powered airline will get another $100 million in capital from investors. Profitability is still 3 years away, they say. Three years for me to win that bet!

More FAA inspections… but no groundings
The FAA, fresh off its attempted legitimacy-building groundings of American’s MD-80s, is ordering the repair of wing de-icing systems, landing gear, and (!) oxygen masks on 1980s-era Boeing 737s. That means Continental, Delta, Southwest, United, and others will have some repairs to make. But it’s obviously not urgent, since the airlines have 36 months to fix things. So, three years from now, if airlines are grounded for these problems, you’ll know why. Bonus: United and the Air Transport Association asked for 48 months, instead of 36. Denied. This really, really, really must not be a big deal.

Peter Greenberg disagrees, after chatting up an FAA inspector responsible for Mesa’s fleet. But Peter, much like with a car, there are degrees of repair. Sure, I should get those wiper blades replaced on the old Honda, as they’re streaking a bit when I wipe the dew off in the morning, but they’re not a danger to me… yet. I agree that repairs should be made, and maintenance is important, but as long as the FAA says it’s minor work and the pilots are willing to put their lives on the line, I’m willing to take the chance and get onboard.

Urinals!
We’ve been promised martini bars, bedrooms, and even weight rooms, so I’ll believe it when I see it, but here’s another in the long line of upgrades to the inflight experience:

Airbus announces the option of urinals in onboard restrooms. That will make turbulence so much less … messy.

But not good enough, Airbus: I demand bidets!

Upgraded: Overreaction
Downgraded: Everyone
Turn on the news, you’ll see reports of American Airlines canceling more flights. At last count, they’ve canceled over 2500 flights, costing millions of dollars, and pissing off hundreds of thousands of customers. Their MD-80s weren’t properly repaired last week, when the FAA grounded them the first time (umm, why weren’t they properly repaired, exactly?). But really, was this mayhem necessary? The FAA previously gave the airline 18 months to fix this wiring. Sure, it should have been done, and done right. But if the FAA felt the airline could take 18 months to fix things, it can’t be that big a deal. So why ground every single MD-80 in the AA fleet? Punitive, sure, but who is punished? Hundreds of thousands of passengers, in addition to the airline itself. (At least the airline is rebooking passengers where possible, but flights are already full, so where can passengers really go?) Seems like a more orderly plan could have been developed.

Upgraded: Delta-Northwest merger odds
Delta’s pilots have agreed to a deal that could pave the way for the Delta-Northwest merger, previously on the skids. We’ll see. (Thanks to Dr. Vino!)

Upgraded: Them. Not you
Hundreds of thousands of people are stranded in airports, waiting to get out on the next flight. If you’re feeling bitter, you may not want to read about how airlines treat VIP passengers. Not elite frequent flyers. Celebrities. (Thanks to reader J!)

Upgraded: Explanations for the accidental discharge of a pilot’s pistol
Downgraded: The TSA
Still wondering how a US Airways pilot might have fired a weapon mid-flight? Here’s a plausible explanation, in video (or vlog) form. (Enjoy the guy’s amazing Chicago accent, as a bonus.) The post suggests that TSA’s policy — requiring an awkward padlock that can pull the trigger if conditions are right — is to blame. I’m still opposed to guns in the cockpit, but the argument against this particular lock system makes sense. Locks: good. This lock: maybe not. Better training of pilots would help, too, methinks. (Thanks to reader Dave!)

Downgraded: Checked baggage weight
In the U.S., airlines are waging a war against the second checked bag. Across the Pacific, Australian baggage handlers are threatening to refuse to move bags weighing more than 20kg (44 lbs.) Until now, 32kg (70 lbs.) were considered legal weight, and those numbers still appear in the Qantas contract. Most U.S. airlines have a 50 lb. cutoff before overweight charges kick in. But this is different: It’s not about fees, it’s about willingness to transport bags over a given weight, period. Bottom line: As always, pack light! (Thanks to reader Rob!)

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The merger insider
Holly Hegeman’s red phone rang, and a trusted insider gave her this update on the United-Continental merger rumors. It’s on.

…the bulk of the existing United Airlines brand will continue to be used internationally, but Continental will take over the domestic operation for the most part. Other details we were told included the fact that there has already been a transition team put together. The deal will be announced after Delta/Northwest goes public. There will initially be a holding company set up to run both airlines. This operation will continue for three-five years. This will allow for a “smoother transition” from the two airlines into one operation.

But what happens if Delta-Northwest doesn’t go through, as it’s now hit a labor-related snag?

The “holding company” concept is one I expected when merger speculation first arose. Much like Air France and KLM operate separately under one company, it looks like the same idea is in the cards for the United-Continental merger, at least to start. But the merger looks like it’s on. Oh well.

Is that “going #3″?
Best opening paragraph in a while:

A newborn baby girl survived an ignoble birth after slipping down the toilet bowl of a moving Indian train onto the tracks when a pregnant woman unexpectedly gave birth while relieving herself on Tuesday.

Bad karma? Or a moral social stand?
Fighting the trend of tipping in American society seems like a losing battle, but the WSJ’s Eric Felten argues against the tip jar at Starbucks. It’s a good read.

Less than 1 cent per mile? No thanks.
I was going to comment that Delta’s new policy that allows you to use SkyMiles to buy a ticket based on the cost of the ticket, rather than the origin and destination, was generally a bad deal, and that it was an other salvo in their devaluation of the mileage currency. But Gary Leff and Tim Winship have already argued this point forcefully, so I’ll let them speak for me. I’ll just nod in agreement.

Misspellings go multinational
My disdain for the name “SimplyWheelz” is not enough to stop the brand from spreading. Hertz’s low-cost car rental subsidiary is expanding beyond Orlando to Alicante and Malaga, Spain, with sales channels targeting British and German tourists.

An old favorite: Fly first class at coach prices
One of this blog’s longstanding favorite subjects, the Y-UP fare, which books into economy but seats you in first class, gets a fresh look from Rick Seaney. The usual caveat applies: Y-UP may be cheaper than walkup regular-economy fares, but they’ll rarely ever beat out a cheapo fare purchased months ago. Nonetheless, it’s always worth a search.

Unscheduled landings stink, but especially internationally
Being diverted to another airport? Never fun. Being stuck on the plane? Never fun. Being diverted, and then stuck on a plane, because you’ve just landed in a different country? Even less fun. Just ask the Qantas passengers who were stuck on the plane during an unscheduled mechanical pit stop in India. (Thanks, Rob!)

Has the passenger rights movement found a second life in the recent tumult over airline mergers?

Kate Hanni’s Coalition for an Airline Passengers Bill of Rights, which seemed to be on the fast track to irrelevance by sticking to a narrow pitch of opposing passenger strandings by the airlines, may have found new purpose. The Coalition has created an alliance with the International Association of Machinists and Aerospace Workers to oppose any airline merger that involves American, Continental, Delta, Northwest, or United. (Southwest, AirTran, US Airways… feel free to merge away!)

Will they have an impact on the merger mania? That depends on what “opposition” to a merger really means. Pickets? Passenger and employee strikes? Lawsuits? We’ll see.

But the key is this: This is an effort to take the stalled passenger rights movement and extend it into a real organization by joining forces with other parties. Creating an interest group, and not just a bunch of people with a website.

But as Chris Elliott warned a while back, any organization needs to look out for passengers, not just for media coverage. Opposing these mergers is pro-consumer, so this is a promising step for Kate Hanni & Co. But, much like there are automobile associations, there’s a long way to go before we have a true airline passenger organization.

Still, this may be the first step.

Related:
- Travel 2008: 33 hours from San Juan to Chicago
- Good for the goose, good for the gander: Charge change fees to your airline?
- Passengers’ bill of rights: Slow but steady progress?
- Chicago City Council to mandate passengers’ bill of rights?
- Should we trust airlines to improve passenger rights?

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