By Joshua Freed, AP Airlines Writer
MINNEAPOLIS (AP) — Bigger isn't necessarily better for airline customers.
United and US Airways are talking about combining into what would be the second-largest U.S. carrier. Travel watchers said that although a reduction in service and competition works out for money-losing carriers, it's not usually to the benefit of airline passengers.
"Mergers tend to be a net negative for consumers," said Tim Winship, the editor of FrequentFlier.com.
A combined United-US Airways would trail only Delta Air Lines Inc. in size. Combining them "would inevitably result in a significant loss of competition, the predictable result of which would be an increase in airfares in certain markets," Winship said.
The last big airline combination — Delta and Northwest — has so far gone as well as could be expected for both airlines and passengers.
Airfares have actually dropped in the time since the deal closed in late 2008 but that largely reflects the recession's impact. People who can travel have enjoyed deeply discounted fares over the past year. Airlines cut fares to keep leisure travelers flying, as business travel dropped sharply. U.S. carriers all reduced capacity too. Airlines are beginning to see business travel return.Rick Seaney, CEO of FareCompare.com, said it will take another year to see whether fares increase in the long run because of Delta's purchase of Northwest.
He said competition is the main thing that drives ticket prices lower. United and US Airways are both major carriers in Washington, although that market also has extensive service from discount carriers.
"Anytime you take somebody off the board, regardless of how much overlap they have, it's a net bad thing for consumers because it's less competition," he said.
Both United and US Airways have been improving their operations. In February, even as massive storms tied up East Coast flights, United and US Airways had the top two arrival rates among international carriers, according to Transportation Department data released Thursday.