Airlines Don't Win in Mergers: Shame About the WSJ

It stands to reason, of course, and anyone from a less dysfunctional industry (that's airlines and newspapers) knows that combined airlines could not benefit long-term if they gave their customers the shaft.

Don't forget that hedge funds with positions in several struggling airlines often seek to push for mergers (or just spread rumors about them) because it's the only way to get out of their positions. Not because the combined entities will thrive.

Back in the reality-based world, the big bad business usually has a bit too much trouble on its hands after the merger to get on with the work of exploiting the little guy for profit. To be sure, the little guy does get exploited, but even the exploitation usually occurs at a loss to the airline.

The Wall Street Journal article ends, strangely enough, with a paragraph about how Southwest(LUV Quote), which hasn't made outright acquisitions since some long-ago stumbles, has benefited by taking business away from competitors who have. Apparently these competitors merged and ticked off customers, which allowed Southwest to poach the customers of the merged airlines.

But didn't the headline read, "Mergers Benefit Airlines"? It's funny how articles with forced story lines always end up disproving themselves.