The Airline Powerbrand Deathwatch is Over (for now)
Well, to be fair, it has been over for several weeks now, I just haven’t had time until this evening to comment on it.
For the time being, it looks as though none of the major US airline brands is in immediate danger. The US Airways hostile takeover attempt on Delta failed miserably, and consequently, the proposed United-Continental merger also seems to have evaporated. These developments have effectively forestalled major consolidation in the industry for the time being, and I personally feel this is beneficial for all parties (though many would disagree with me on that point).
One common statement about the airline industry is that consolidation is somehow neccessitated by the overcapacity that is supposedly present in the industry. However, capacity among all US airlines declined significantly post-9/11, and is now on the rise in response to growing demand. A number of industries operate extremely well in spite of chronic overcapacity: retail, for example. One might ponder how those who so actively advocate mergers between airlines might feel about a Wal-Mart/Target combination.
In any event, talk of consolidation will inevitably continue. It is entirely likely that Midwest, an airline with a premium brand and a highly differentiated product, will be acquired by AirTran, an airline with a much lower end, undifferentiated product, and I am not personally thrilled by that prospect. At least, however, from the branding perspective, none of the surviving “great names” of US aviation is on the chopping block…