United-Continental deal for LAX

So far the impact looks pretty minimal. There's just a little overlap on routes (Honolulu and Houston), and United is by far the bigger local player, with a market share at LAX of close to 20 percent. Continental is 4 percent. Continental does operate out of a different terminal than United, so there might be changes on that front. As a rule, big airline deals result in some consolidation, but not necessarily higher fares. It's too easy for other carriers to add competing routes and then offer discount fares. Other effects? From the WSJ:

Splicing together airline operations is complex, and plenty of bags can get lost along the way. Putting together different reservation systems has caused problems in past mergers. So have labor integrations. Merging two seniority lists into one often means some group of employees loses out--it's a tricky business, and it's vital to airline crews because seniority determines wages and work schedules.


Though it will be based in Chicago and called United, it's the Continental executives who are moving in, and that could mean culture clash. Continental's pilots are higher paid than United's, so to get smooth integration, United's pilots are expecting raises - and no doubt Continental's, too. Just because Delta-Northwest provides a template for smooth mergers doesn't mean Continental-United will follow the same path.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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