There Are too Many Carries in the Air These Days

Bankrupt US Airways may have saved itself by agreeing to merge with America West Airlines, but it does little to address what many in the industry believe is a fundamental problem: too many carriers offering too many flights.

When US Airways Group Inc. made its second trip into bankruptcy in September, some competitors hoped and many experts believed the airline would never emerge, allowing competitors to pick the bones from the carcass of the nation´s seventh largest airline.

Now, even though many in the industry believe the collapse of a carrier like US Airways would be the best remedy for excess capacity, the planned merger with America West calls for just a slight trim of the US Airways fleet.

"The survival of US Airways could be detrimental to the industry as a whole" because it props up a carrier that just months ago had been on the brink of total collapse, said business professor Anthony Sabino of St. John´s University in New York.

While eliminating 15 percent of the combined fleet of the nation´s seventh and eighth largest carriers may sound like a drop in the bucket, industry executives seem appreciative of any capacity reduction.

Southwest chief executive Gary Kelly, speaking at the airline´s annual meeting this week before the merger was announced, had said that shedding 50 planes in a US Airways-America West merger could be a positive development and the start of an industry-wide consolidation.

Lowell Peterson, a New York-based bankruptcy lawyer with Meyer, Suozzi, English and Klein who has expertise in airline issues, agreed that the merger does little to address issues of overcapacity, but allows the two airlines to remedy a key structural issue: an overreliance on an outdated hub-and-spoke network.

Even though both America West and US Airways have hub-and-spoke networks –US Airways with hubs in Philadelphia and Charlotte, and America west in Phoenix and Las Vegas- the merger gives the two airlines more gates and a more flexible network that shifts more toward point-to-point flying, efforts US Airways had already undertaken as part of its internal restructuring by downscaling its hub in Pittsburgh.