The proposed merger is a mixed bag for meeting managers.
While the Continental-United merger announced May 3 still needs to run the gantlet of employee unions, shareholders, and the Justice Department’s antitrust division, corporate travel and meetings managers are already considering the implications of what could soon be the world’s largest carrier.
The consequences, it seems, depend on where you’re located. In Cleveland, which is a hub for both airlines, the merger could mean fewer nonstop flights and higher fares, as well as the possible loss of hub status, according to the Cleveland Business News. Some analysts predict that United's major hub at O'Hare International Airport in Chicago will draw flights and business away from Cleveland. Another combined hub that would be adversely affected is Washington-Dulles. Hub-to-hub routes that could lose flights include Newark–Los Angeles, Newark–San Francisco, and Denver–Houston.
On the other hand, analysts say the deal would create major hubs in key U.S. markets, including New York, Los Angeles, Chicago, Houston, and San Francisco, and build a broad international network, joining the United routes in the Pacific and Continental routes in Europe and Latin America.
“Like all mergers, there are good and bad things,” said George Odom, president of Strategic Travel and Meetings Group, a consultancy located in Fisher, Ind. “The good is that the frequent-flier programs will merge, and travelers can combine their mileage (although it may be difficult to cash in miles since there are more people trying to do so on a single carrier). From a corporate travel department standpoint, the merger could take more flights out of the air and take competition away, which in theory could lead to higher pricing.”
For many, it’s wait and see. Tim Bone, director, union conventions, events, meetings at the Service Employees International Union in Washington, D.C., doesn’t rely on preferred carriers. “We use a lowest logical airfare in the marketplace. Since the majority of our travel is domestic coach, unless there's a monopoly and airfares rise, which is yet to be seen, it won’t impact our program either way.”
In Battle Creek, Mich., Cecile Mutch, senior manager, travel, meetings, and corporate card, Kellogg Co., hopes to see some benefit. “Delta/Northwest already adversely affected my travel geographically, since over 50 percent of my business is on that carrier. American Airlines is our other primary vendor. United and Continental don’t have a presence in our headquarters city [Kalamazoo], so less than 10 percent of our travelers fly them. I’m actually hoping it improves my market share with Delta and American, assuming there will be service issues during the merger.”
The merger is expected to take effect by the end of the year pending approval from shareholders of both companies (one Continental shareholder has filed a lawsuit to stop the merger). If approved, the airline companies have said they would operate under the United name but use Continental's globe logo and typography style. Stay tuned to meetingsnet.com for further updates.