'Today' Ignores Necessity of Airline Merger

     Sometimes the media lose sight of the fact that businesses exist to make money and have to protect the bottom line.


     Minneapolis-based Northwest Airlines (NYSE:NWA), is negotiating a merger deal with Atlanta-based Delta Air Lines (NYSE:DAL), which could be a win-win situation for both companies. But NBC’s “Today” didn’t look at it from that standpoint. Instead, the February 15 segment focused on how a merger could negatively affect consumers and employees, while ignoring the possibility that the survival of both airlines may hinge on this merger.


     “But airline mergers have traditionally meant job losses, especially in the airlines’ hub cities, as well as fewer flight options for passengers in smaller cities and higher ticket prices,” NBC correspondent Tom Costello said. “In Atlanta, we found frequent travelers fearing that’s exactly what could happen.”


     “Today” interviewed a traveler in Atlanta afraid they would see higher fares out of the Delta hub airport. But even in Atlanta, competition wouldn’t be greatly affected by a merger. Currently, Northwest and Delta compete on only three routes from Atlantato Northwest’s hub cities Memphis, Tenn., Minneapolis and Detroit.


     Both Delta and Northwest filed for Chapter 11 bankruptcy in 2005. Delta emerged from bankruptcy in April 2007 and Northwest a month later. Higher jet fuel costs and excess capacity have plagued the airlines over the past decade. A merger could help offset some of these concerns.


     The segment didn’t include a spokesman from either airline, but instead interviewed a Democratic politician who is opposed to the merger.


     “Competition is what is keeping prices reasonable today,” Rep. Jerry Costello (D-Ill.) said. “If you eliminate competition, the fewer airlines you have the fewer choices people have.”


     Neither “Today” nor the congressman mentioned the impact of one of the airlines going completely out of business if a merger is blocked. Liquidation was narrowly avoided by Northwest after it filed for bankruptcy in 2005 according to USA Today’s “Today in the Sky” airline blog.


     “Today” only included one supporter of the proposed merger who thought it could be a “perfect marriage” according to Tom Costello. But the NBC correspondent undermined airline travel consultant Terry Trippler’s remarks with the rest of his report.

     In August 2007, NBC’s Costello attacked American Airlines (NYSE:AMR) for its on-time record and held it up to Southwest Airlines (NYSE:LUV) on-time record because the two airlines share hub cities, even though they operate with two completely different business models.