A merger between United and Continental is a step in the right direction for the struggling US aviation industry but for travellers the changes will be mostly cosmetic, experts say.
The $US3 billion deal faces tough US anti-trust scrutiny from a reinvigorated Obama administration Justice Department, according to legal experts, who expect it to receive approval.
The deal finalized Monday creates a new airline that will fly under the United Airlines name and will hold around seven percent of global airline capacity.
But Michael Boyd, president of aviation consulting firm Boyd Group, said passengers could expect "business as usual."
"It's kind of a non-event for customers. We're not going to see reductions in service, we're not going to see changes in route structure. I think the biggest change is you're going to be checking in at the United counter and not the Continental one," he said.
"In terms of changing the world, it's not going to happen."
George Hobica, president of flight ticket aggregator Airfarewatchdog.com, said the move was a positive step for the US commercial aviation industry, which has suffered through losses associated with the recession, terrorism and, most recently, mass flight cancellations because of volcanic ash over Europe.
"We have way too many airlines," he said. "The alternative to consolidation is continued deterioration of the quality of service and, eventually, fewer airlines as a result of Chapter 9 (bankruptcy)."
"The end result is going to be the same, it's how you want to get there."
He predicted modest ticket fare increases on the order of five to 10 percent as a result of the merger, with non-stop routes that were previously served by both companies most likely to be affected.
Hobica and Boyd said passengers could see reservation system glitches and baggage go missing at a higher rate than usual as the two companies merge systems, but they noted that Delta's 2008 takeover of Northwest went smoothly.
The merger still needs approval from shareholders of the two carriers and US anti-trust authorities, who turned down a United-US Airways deal in 2001.
Jeff Smisek, the Continental chief executive who will move to the same position in the new company, said Monday he was "confident" the deal would be approved.
"There are no material anti-trust concerns. We are increasing competition, we are not reducing competition, with more consumer choice, better consumer choice," he said.
Herbert Hovenkamp, an anti-trust expert and professor of law at the University of Iowa law school, said he expected the deal to face "aggressive" scrutiny from the Justice Department's anti-trust division.
He said the division would examine two prongs of the merger: elimination of competition on routes previously flown by both airlines, and the possibility of "predatory pricing."
The companies have touted their deal as an extension merger that will open new routes to customers, but some non-stop domestic US routes will lose competition when the two join forces, Hovenkamp said.
He predicted that the Justice Department would condition its approval of the deal on the new airline relinquishing routes "where competition will be lessened."
"The government is going to find some problem cities and routes," he said.
"Then it's going to have to fashion a proposal and the proposal will take the form of basically a conditional challenge, which is basically a way of saying we'll approve the merger providing you accept these conditions."
"I would guess that it will go forward, more likely than not, but that there will have to be some spin-off of routes," he said.
While the United pilots union said Monday they would take a "wait-and-see" approach to the deal, analysts said the merger was unlikely to face labor opposition.
"If it doesn't look like they're trying to reduce the number of flights on overlap routes, labor tends to take a pass," said Mark Cooper, director of research at the Consumer Federation of America.
"United has been banging on Continental's door for five years, so the unions have been talking to each other too," added Boyd.
While the deal won't affect most travellers, Hobica said some fliers stood to benefit.
"If you're the kind of infrequent flier who has 12,000 miles with Continental and 13,000 with United, and you never had any hope of getting a free ticket, this might be your best chance."
AFP
Sign up for the Traveller newsletter
The latest travel news, tips and inspiration delivered to your inbox. Sign up now.