No fare hike if......CEO of New American Airlines. Matthew J. Belvedere, CNBC.com
American as well as United and Delta have global strength with access to the main business centers of the world. So airline competition will be based on how good the in-flight experience is for travelers, Parker said on CNBC's "Squawk Box."
The "Squawk on the Street" crew discuss the close of the U.S. Air and American merger creating the world's largest airline and what it means for investors. Also, a United passenger has an unfortunate experience. "The three of us have now the ability to take people pretty much anywhere in the world. What used to be a business where it was purely on schedule, if you have the ability to take people everywhere, you have to compete on product. And we're prepared to do that," said Parker, who had been the CEO of US Airways before the merger.
Given that United has fallen behind the industry when it comes to installing wi-fi, still has planes flying with NO In-Flight Entertainment and is decreasing not only the hard product in economy but also diminishing the value of their customer loyalty program, you would think they don't want to hear that flying has now become a commodity where price and perceived value are the top determinants of the buying decision.
Maybe that "second-tier" strategy isn't sounding so smart right about now?
