With Oil Prices Dropping Are Airline Mergers Smart?

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With oil prices dropping, the cost of jet fuel is down by more than 50%. That makes the rush to merge airlines which accelerated earlier this year look like an idea whose time came and then went.

Given the costs and risks of a consolidation, the endless lines of angry customers, the strikes by unions, and the broken computer systems, Delta (DAL) may rue the decision to buy Northwest.

Now another merger may be in the offing, this one between British Airways and Qantas. It is hard to imagine where the big savings would be. At least both managements speak English.

Douglas A. McIntyre