Small airlines fly under the merger radar

Jason Paur Dec 19, 2006
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Small airlines fly under the merger radar

Jason Paur Dec 19, 2006
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TEXT OF STORY

SCOTT JAGOW: We’ve heard plenty about potential airline mergers, but for some reason nobody seems to be mentioning any of the low-cost carriers. Jason Paur looked into it.


JASON PAUR: Many of the so-called legacy carriers are looking to team up to survive what continues to be lean times in the industry.

So why not boost revenue by acquiring a smaller, money-making airline like Southwest, JetBlue or Alaska?

Industry analyst Richard Aboulafia says in many cases it’s the wrong fit.

RICHARD ABOULAFIA: I think the legacy carriers look at the low-cost startups much in the same way that a dinosaur would look at small mammals busily eating their eggs. It’s definitely a competitive threat, but it’s an entirely different business philosophy.

Big carriers operate on the hub-and-spoke model and are looking to merge with a similar operation to complement their existing routes.

Smaller carriers aren’t appealing because they just don’t fly to enough places.

I’m Jason Paur for marketplace.

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