Less is more

A few months ago, AT&T and Verizon were trying to convince us that fewer cell phone providers was better for the consumer. Fewer competitors-in their words-means that they can focus on improving their service and less on competing. I guess I should be really mad that the money I pay every month for cell service doesn't get me the kind of service I need. I should pay more to receive the same service, only believe it is better because I am paying more. Now the airline industry is making similar waves.

I read a report on Yahoo! Finance indicating that Delta, fresh off a merger with NorthWest Airlines is looking to add American Airlines to their portfolio. I can appreciate their motivation: reduce consumer buyer power! With fewer options, the buyers (consumers) will have to pay more. We do know, through examples such as JetBlue, that there is still a threat of new entrants to keep the prices from sky-rocketing, but this will not keep mega-carriers such as Delta from easing up the prices.

As far as we have come since airline regulation, the prices are still very reasonable, but we are seeing other profit centers for airlines to allow profit pools that will keep them in the black, even if competition forces them to keep prices down. I just don't picture an industry with 3 major carriers maintaining a war that hits their margins. Instead will see them apathetically watching their competitors raising prices and then finding that they are better off raising their own prices. Another merger in this industry will be good for the airlines and bad for the consumers.