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Euro-supercarrier impact on flyers

By Nick Easen for CNN

What can we expect: Better networked flights and lounge sharing, but a hike in fares?
What can we expect: Better networked flights and lounge sharing, but a hike in fares?

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(CNN) -- The $900 million merger between KLM and Air France will create the world's third largest airline, but how will it affect business travelers?

Officials from both airlines say customers will have extended networks, more flights, and more choice.

But some travel organizations and analysts say fares could rise from a consolidation of routes and a reduction in the number of competitors -- a situation that will be exacerbated if Alitalia joins.

"On select routes, there maybe a rise in prices. However, there will be benefits in the form of shared facilities at airports and more efficient networks," Philip Wickham, airline analyst at ING Financial told CNN.

"The merger will be more on cost reduction rather than revenue enhancement, so I do not expect material increases in air fares across the board."

The UK's Guild of Business Travel Agents has also said fares could rise between Paris' Charles de Gaulle and Amsterdam's Schiphol airports if the merger goes ahead.

The guild also expressed concern over the reduction in competition on long haul flights.

But KLM insists passengers will get a better deal. "Customers will benefit from seamless service through the alignment of networks, codesharing, linkage of loyalty programs and the reciprocal use of lounges," Youssef Eddini of KLM told CNN.

Some analysts say that the merger could also encourage airline alliances to work more closely.

"What this merger has done is create, for the first time, a potential European "super carrier" that can break into the top five global airlines -- currently completely dominated by the U.S. carriers," says Fraser.

If the merger is successful it could set the standard for further cross-border consolidation over Europe's crowded skies.

"Obviously, the merger plus the possibility of Alitalia joining will have an huge effect on the dynamics of the airline industry, particularly in Europe," said Lynne Fraser of airline data company OAG.


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