Operating under the assumption that what's good for business is bad for consumers forces the media to give Americans a narrow view of the world.
All three network newscasts on April 14 reported the Delta Air Lines (NYSE:DAL) and Northwest Airlines (NYSE:NWA) as if it were a conspiracy to bilk air travelers out of more money.
"It's an unsettled time in the skies - planes grounded, flights cancelled, spiraling ticket prices," ABC correspondent Lisa Stark said on the April 14 "World News with Charles Gibson." "And now, things could get even more complicated. Delta operates 1,500 flights a day with hubs in Atlanta, Cincinnati, New York and Salt Lake City. Northwest - some 1,200 flights a day with hubs in Detroit, Minneapolis and Memphis. Put the two together, and passengers could take a hit."
The "hit" passengers are going to take is that there will be less capacity, which will decrease the supply of available seats and cause the price to increase.
But there are other factors involved with airfares beyond supply issues the report ignored. Consolidation won't necessarily decrease supply, just distribute it differently. According to "World News," two of the hub cities - Memphis and Cincinnati - could be de-hubbed after the merger.
However, that isn't necessarily a bad thing. When American Airlines (NYSE:AMR) and TWA merged in 2001, it opened up some of the St. Louis market to Southwest Airlines (NYSE:LUV) and that caused airfares to actually decrease. Currently, the Cincinnati market has the highest average airfare in the country because of Delta Air Lines' ability to control the airport's fare structure with little competition from other airlines.
The other two networks were also critical of the merger deal. "NBC Nightly News" assumed the merger would cause fares to increase because of supply. "CBS Evening News" trotted out a Democratic pro-airline union congressman that opposed the merger.
Even though the merger is official, all three networks warned of a potential merger between Continental Airlines (NYSE:CAL) and United Airlines (NASDAQ:UAUA).
Editor at Large
Comments Policy
I wonder if...
April 15, 2008 - 15:18 ET by sarcasmoTrying to stop this one will employ as many absolutely-useless DC lobbyists for as long as the Sirius/XM merger did? And, if it does, I wonder if the media will be just as silent about the waste as they were before??
JMR
The tax & spend drug war looks racist in the real world.
This is as bad as the....
April 15, 2008 - 18:23 ET by NavyBuckeyeprice of crude per barrel has reached another high people. This reporter and those people don't understand how the system works. I will stick to the oil price. Don't the dimwits understand that as long as we allow these third world arab/socialist countries to control the flow of crude(because activists don't stop them from drilling), they will continue to raise prices.
Now I will play the part of the indoctrinated American:
I don't understand, this is Bush's fault.
Well people if we drill in the two biggest remaining reserves(scientist say thise two alone will last two centuries if not longer, and this is taking into account growth) in Alaska and the Rockies...guess what we will control flow...which means we control supply....which means we control price. Also if the greenies backed off of the you can't build refineries stance as well......then gas would drop significantly....but then that makes to much sense and is way to easy.
“Were it left to me to decide whether we should have a government without newspapers or newspapers without government, I should not hesitate a moment to prefer the latter” - Thomas Jefferson
NB... I couldn't of said
April 15, 2008 - 18:27 ET by bigtimerNB...
I couldn't of said it better....although I've tried year after year...
Thank you!
"Never murder your opponent when he is committing suicide." ~ W. Churchill
BT
April 15, 2008 - 18:30 ET by NavyBuckeyeI know the feeling. I am married to a super lib. She still doesn't thin Obamasiah hasn't said anything stupid yet. But I know the pain, I go through it everyday.
“Were it left to me to decide whether we should have a government without newspapers or newspapers without government, I should not hesitate a moment to prefer the latter” - Thomas Jefferson
A COUPLE OF THINGS...
April 16, 2008 - 06:15 ET by danybhoysarc,
1 of the bigger pork barrel pigs in Congress, MN-Dem-James Oberstar says he will try to stop the Delta-Northwest merger, why? Because MN will lose all sorts of jobs, & why not? Minnesota's corperate tax rate is 9.8%, on top of the 35% federal rate. They will be based in Atlanta, & pay a much lower rate. Minnesota is now hellbent on chasing out as many jobs as they can, because of the Dems in charge & the RINOs who go along with these dopes. We deserve to lose the jobs.
As for the XM/Sirius deal, it's not about being good for the consumer, like me(XM). It is about Mel Karmazan trying to get a big payoff from the Sirius shareholders. I happen to think that XM & Sirius keep each other honest, like Dish & Direct, the merger would be bad for the consumers.
"Some of us are wise, some of us are otherwise" Mark Levin
I disagree.
April 16, 2008 - 06:25 ET by sarcasmoOn Sirius/XM. Both companies wanted the merger, and Mel is in for the long haul. He's already a very rich man from Viacom, and Mel has never been a short-term guy. He took Sirius from the smaller company to eating the bigger one, and there was not enough market out there for both to survive and prosper after he won. The new "monopoly" has and will-have PLENTY of competition, as the DOJ found after an interminable delay caused by the aforementioned useless NAB lobbyists. Some of what they proposed, BTW, was the exact kind of FCC control-freakery that drove me to Sirius in the first place. The FCC needs to find a way to want to leave us TF alone.
Don't like the deal as a consumer? Boycott 'em. You have a plethora of excellent alternative entertainment choices in your home and your car. I'm glad these companies are finally being allowed to practice capitalism by this obese government, which is what they wanted to do a LONG time ago.
JMR
The tax & spend drug war looks racist in the real world.
Funny, now the media is
April 15, 2008 - 19:12 ET by Chris NormanFunny, now the media is against the cutting of flights. Before, they were worried that too many flights were causing delays and were a safety hazard. Face it - they're against the merger because they're against anything the airline business - heck, almost any business does - period.