The New United Airlines… a Merger to Survive

United Airlines and Continental are merging, and that signal alone indicates how difficult business has become. It is too bad the merged company can’t signal a new kind of airline, but that isn’t in the cards in this economy.

The “Friendly Skies” – “Let’s Fly Together” carrier is merging with the “Work Hard. Fly Right.” airline to realign services, cut costs, and try to stay competitive. But in the process, consumers have lost their leverage.

The new airline will be the largest in the world and will be called United, but use the classic Continental identity. It is a safe choice, attempting to say to both United and Continental customers that not alot has changed. A low risk, smart identity choice given the current situtaion.

I was involved with transfroming Continental in the early 1990’s when the current look helped separate Continental from it’s past as a regional vacation carrier. The current livery helped propel Continental to a first tier status, and put it on the global stage. That is one reason why retaining the Continental look is a safe idea.

Brands are valuable for many reasons. They create choice by differentiating business offerings. This, in turn, provides price competition and the consumer is often the beneficiary. But the chromic losses of the airline industry have made the industry unprofitable. Thus, mergers are a major way out of the briar patch. Unlike the US Airways/America West combination, which is still operating as two separate carriers, United appears to understand the importance of moving quickly to consolidate and integrate into one carrier.

What will we see over time? Higher fares, fewer seats, and fewer choices.

What we’d love to see is a carrier redefining a new era in business and vacation travel. But that will just have to be for another time.