Here we go again.
Allegiant Air has announced it will acquire Sun Country Airlines in a deal worth about $1.5 billion. Executives promise this combination will create a leisure travel powerhouse with more choices and better connectivity for you.
Sound familiar?
What this merger means to you
In a press release, Allegiant CEO Gregory Anderson promised the combined carrier will provide "affordable, reliable, and convenient service" from underserved communities to top leisure spots. He also says the merger will create a resilient and agile airline that delivers "greater value" to travelers.
Sun Country President Jude Bricker describes the two carriers as "customer-centric organizations" that are committed to delivering affordable travel experiences without compromising on quality.
The airlines claim this union will create a leading leisure-focused U.S. airline with more than 650 routes.
The airline competition issue
Here's the problem: We already have a competition crisis in American aviation. The Big Four—American, Delta, United, and Southwest—control roughly 80 percent of the domestic market.
This dominance allows them to dictate how we fly. They can shrink seats, invent new fees and treat you like self-loading cargo. Now, two smaller carriers want to bulk up to compete with the big boys.
But history suggests consolidation is almost never good for customers. In fact, I don’t know of a single merger that lowered fares or improved service.
A history of broken promises
If you think this deal will help you, check the record. Recent mergers have consistently delivered higher fares and a degraded product.
Delta and Northwest (2008). After this combination, secondary hubs in Cincinnati and Memphis were effectively dismantled. Passengers in those cities lost convenient options and saw fares rise.
United and Continental (2010). The deal led to significant service disruptions and the elimination of the Cleveland hub. It also sparked a decrease in flight frequency.
American and US Airways (2013). Created the world's largest airline. It also created America's worst airline, at least when it comes to customer service.
Can they stop this merger?
This isn't a done deal yet. It requires approval from federal regulators who are increasingly skeptical of corporate consolidation.
The Department of Justice must review the deal for antitrust concerns. It will ensure the merger doesn't substantially lessen competition or create a monopoly. And the Department of Transportation will review the transfer of economic authority and ensure the new entity is fit to operate.
In other words, the government can still prevent these two airlines from merging.
Should this airline deal happen?
Allegiant and Sun Country claim their merger will be good for you. What do you think?
And a few follow-up questions:
If you said yes, why? Do we need stronger competitors to fight the Big Four?
If you answer no, then why not? Do you think consolidation always leads to higher prices and worse service?
My take
I'm not a fan of airline mergers, but Allegiant and Sun Country can show me compelling evidence that this merger will help passengers, I'm open to it.
Your turn
What do think of this? Tell us in the comments. (Note: We’re on a new platform, so you may have to sign in using your email address. Here’s how to log in.)