The Sydney Morning Herald recently speculated about the impact of a United-Continental merger on the Australian airline market:
The Americans know they will have to become even better pals if they are successfully to merge their companies to form the world’s largest airline. It is an engagement that has left aviators scurrying to assess the implications since Tilton and Smisek announced the $US3 billion ($3.5 billion) marriage of United and Continental in a New York hotel three weeks ago…
With Virgin and Delta now competing with United and Qantas on the LAX-SYD-LAX route (and Singapore still trying to join the foray), the coming months will determine if the route can bear four competitors. After predicting that United would be unable to compete on the route, Richard Branson faces the prospect that it might be his beloved Virgin that is forced out by competition:
Tilton shows no love for his Australian competitors. He could not resist taking a swipe at Richard Branson, Virgin’s largest shareholder, who claimed early last year that United would be the first of the four airlines servicing the route to pull off.
”Ah, so how does that look today? Or as Sarah Palin likes to say, ‘So how is that working for ya?’ ” Tilton exclaimed at the gathering in Sao Paulo to mark the inclusion of the Brazilian airline TAM into the Star Alliance group of airlines. ”We really enjoy the competitive challenge and any time [Branson] wants to lay down challenges like that for us we really appreciate it – it’s very motivating.”
Quoting Sarah Palin? I hope all four carriers keep the route–I’m loving the cheap prices. $669 a/i in August on Delta or United for those who are interested.
I don’t think UA will give up its prized Sydney routes and don’t think the merger will make too much of a difference to Australians, unless they are traveling to the United States. If anything, the merger should help Australian consumers by assuring that United will continue to serve Australia from the West Coast.