In December 2013, American Airlines and USAirways finalized their merger, which made them the nation's largest commercial air carrier. Following the recent mergers of United and Continental, and Delta and Northwest, the United States now has three major air carriers, offering 70% of seats in the US. These changes, along with the January 2014 implementation of FAA Rule 117 (Flightcrew Member Duty and Rest Requirements) have combined to make private aviation even more appealing to consumers concerned with convenience.
Although the full impact of the American Airlines/USAirways merger hasn't been realized yet, the industry has already seen a decrease in hubs and more connections for flights. These changes are likely to result in more expensive, less convenient flights for consumers. As a result of the merger, the combined USAirways/American Airlines has already announced plans to consolidate flight operations in Fort Worth, TX, closing the current USAirways flight operations center near the Pittsburgh airport.
This consolidation trend isn't just isolated to the commercial market. According to Greg Raiff, CEO of Private Jet Services, the consolidation in the private charter market is actually having a positive impact, by decreasing a highly fragmented market with hundreds of carriers.
Another recent change that is impacting consumers is FAA Rule 117, which includes new duty and rest requirements for pilots, along with dictated fatigue awareness training. Although airlines have had some time to implement the changes before they were enacted, Rule 117 will have an impact on airlines, by increasing the total cost of labor. These cost increases will inevitably be passed on to the consumers, raising airline rates across the country. FAA Rule 117 does not apply to private aviation, and shouldn't result in price increases in that market.
Together, these two major occurrances in the commercial aviation industry are likely to make private aviation more appealing. We'll continue to follow the impact of both the commercial mergers and the implementation of FAR 117.