Delta and Northwest have merged, and now United and Continental are merging. So naturally someone raises the specter that airfares are going to go up. “Concentration in any industry leads to higher prices,” says someone who claims to have analyzed the airline industry for 40 years.
I don’t know what industry they have been analyzing, but it isn’t the one I’ve observed over the past 40 years. The problem for the airlines is that the cost of starting a new airline is low. Sure, the planes are expensive, but you can lease those. Once you have those, you don’t have to pay for air space, you don’t have to build airports, and you don’t have to build your own air traffic control system. As a result, for every airline that disappears through bankruptcy or merger, another one springs up.
Though not relevant to the rest of this post, this plane is not only painted like a salmon, it is a piece of pork. As a favor to the Alaska fishing industry, Alaska Congressman Don Young wrote a half-million-dollar earmark into the 2005 transportation bill to paint this plane to advertise Alaska salmon. Photo courtesy Alaska Airlines.
