Passengers on a new Delta Air Lines, created by a proposed merger with US Airways, would see higher fares and fewer flight choices in some markets, travel experts say. But frequent fliers could combine their mile credits from each carrier and use them to fly free to more destinations, especially overseas. "When two airlines merge, you get an enlarged route network, which means frequent fliers have more opportunities to earn miles and redeem them," said Tim Winship, contributing editor for Smartertravel.com. At the time of US Airways' recent bid, CEO Doug Parker said frequent fliers would combine their mile credits of US Airways' Dividend Miles program with those of Delta's SkyMiles program. Their choices of destinations would expand to 350 worldwide from US Airways' 234 cities, including Europe, and Delta's 306 on five continents. US Airways mounted an $8.6 billion hostile offer Nov. 15 to acquire Delta out of bankruptcy and create the nation's largest airline. It would command the most flights to Europe and the second-most flights to the Caribbean. "After the merger, you may wind up with enough miles for a free trip, but that may not translate into more rewards," Winship said. "My calculation is that there won't be enough additional free seats after the merger to accommodate the increase in (frequent flier) demand." "In reality, you'll load more frequent fliers clamoring for choice seats to destinations in Europe and the Caribbean and Hawaii," said Bill Maloney, executive vice president of the American Society of Travel Agents, Alexandria, Va. "So, it's kind of a ruse." After the September 2005 merger of US Airways and America West, Winship heard complaints from more people who found it hard to redeem their combined miles, he said. Delta management is resisting the cash-and-stock deal. By mid-December, Delta expects to submit a plan to reorganize. The airline could exit bankruptcy by mid-2007 as a stand-alone carrier. "We're going to have fuller planes and higher fares. That's a fact," said Dean Headley, associate professor of marketing at Wichita State University and co-author of a noted airline quality study each year. Headley said air fares have increased about 25 percent over the past two years. The trend is driven up by carriers' need to cover higher fuel costs, as well as their pruning flights to better fill planes and regain profitability. In its bid, US Airways said its would serve every destination currently flown by each airline. But the merged airline would reduce capacity by 10 percent, which means fewer airplane seats. Delta already is reducing capacity by 7 percent. "Business travelers would pay higher ticket prices, as capacity is removed, and three competitors (America West, US Airways and Delta) would have been reduced to one in a relatively short period of time," said Kevin Mitchell, chairman of the Business Travel Coalition, Radnor. Pittsburgh would be unlikely to lose much, if any, service, said most experts. "Pittsburgh already experienced a downgrade from hub status," said David Stempler, president of the Air Travelers Association, Potomac, Md. Kent George, executive director of the Allegheny County Airport Authority, said Pittsburgh International doesn't have enough merger detail yet to render an opinion of the deal. "I'm still trying to figure out what 'focus city' meant from the last merger," with America West, George said. That was the phrase US Airways used in 2005 to describe slashing the one-time hub to 159 daily departures from a high of 512 in early 2001. "If they have 10 flights a day from one destination to another, then they'll look at passenger volume and the load factors (percentage of filled seats) and cut service to, say, eight or nine flights," Headley said. "A 10 percent reduction in capacity would certainly increase fares in the old days," Stempler said. "But with low-fare competitors like Southwest and JetBlue, that's not as much the case anymore." Headley said US Airways might cut capacity on some routes by pulling 120- to 140-seat Boeing and Airbus aircraft and substituting smaller regional jets with 70 to 90 seats. Such decisions won't happen until 2008, he said. "With the high fuel costs today, planes have to be 75 to 80 percent full to break even," Headley said. "It used to be they only had to be 50 to 60 percent full, but that was before 9/11." US Airways said it would divest either Delta's or its own Northeast shuttles, which fly passengers between New York, Boston and Washington, because the overlap will raise antitrust objections from regulators. A US Airways-Delta combination would control 25 percent of the U.S. air passenger market, or 18.2 percent excluding express flights, US Airways said. Parker said such concentration would not trigger a government challenge and any antitrust issues could be resolved. The threat of a Department of Justice challenge to a United-US Airways merger in 2001 helped halt that mega-deal, which would have given United a 27 percent U.S. market share. Veteran industry analyst Ray Neidl, of Calyon Securities, thinks several hubs doing lots of regional flying could be "closed or sharply downsized." Most at risk are Delta's Cincinnati and Salt Lake City hubs, and US Airways' Charlotte and Philadelphia hubs, he said. For example, California flights from Augusta, Ga., connect through Atlanta on Delta and through Charlotte for US Airways, Stempler said. So one of those hub connections would go away, he said, and the new Delta would cut many other hub connections similarly. "Parker says this still a highly fragmented industry, but that's irrelevant," Mitchell said. "What is relevant are the city pairs." Only Delta and US Airways offer nonstops between Philadelphia and Cincinnati, for instance, and between Washington (Reagan National) and Columbus. That means the airlines' merger would eliminate nonstop competition on those and at least seven other city pairs. "Airline mergers remind me of Lucy with Charlie Brown and the football," said the travel agent group's Maloney. "The history of airline mergers is replete with failed promises. In almost every case, it results in less service, less employees, higher fares and lower customer satisfaction."

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