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Wed, May 05, 2004

More Talk About Consolidation

Three Airline Leaders See Big Changes Ahead

It's like watching a game of Russian roulette. The honchos of the country's three biggest airlines, all sitting at the same podium, all agreeing that a lot of legacy carriers will soon go the way of the dodo. The biggest unasked question at the table: who's gonna get it?

"There will be fewer of the legacy, or network carriers. What is harder to fathom or figure out are which ones are going to make it," said Gerard Arpey, CEO of American Airlines' parent company, AMR Corp.

Speaking on a panel with Continental CEO Gordon Bethune and Southwest President Jim Parker, Arpey wondered which of those at the table would still be in business a few years from now.

Bethune agreed that the market might eventually only support two or three legacy carriers. Surprisingly, they also agreed that the number of low-cost carriers would also drop to around two or three.

"It is foolish to believe that all are going to fly," said Bethune.

Parker, however, was more circumspect in his comments to the panel in Fort Worth (TX). "I think there may be different airlines. I don't know if there will be fewer airlines," he said.

FMI: www.air-transport.org

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