Passage 4

On Thursday American Airlines and US Airways announced an alliance to pool their frequent-flier programs, giving customers added incentives to fly one another's skies. Then on Friday Delta and United delivered word of a sort-of-but-not-quite coupling. These deals thrust the much-scrutinized airline industry even more into the public spotlight. Airline profits are at record highs. Business fares are climbing into the stratosphere, up 16 percent last year alone. Now comes the consolidation sweeping the industry. The question is whether these deals will mean more choice and more convenience, as the airlines argue, or less competition or even higher prices.
Clearly consumers can benefit from these tie-ups. Passengers flying American or US Airways, for instance, can now use either carrier's network of 72 worldwide clubs and lounges. They can combine their frequent-flier awards, allowing them not only to build up redeemable miles more quickly but also cash them in to more destinations. American can plug into US Airways' deeper web of connections up and down the Eastern Seaboard; US Airways, with fewer routes to South America, the Caribbeari and Europe, will be able to offer a greater array of international flights. In time, American and US Airways hope to create the more ambitious partnership -- a so-called code-sharing agreement that would allow the two carriers to coordinate flight schedules without entering a full-fledged merger. The goal is "seamless service" -- without having to change airlines.
Price is a wild card in these alliances. Consumer groups worry that they will reduce competition, translating in turn into higher fares. They could be right. Given the rapid trend toward consolidation, many analysts foresee a day when most major "hub" airports will be dominated by a single airline or consortium. A report last year by the General Accounting Office found that ticket prices, in such cases, ranged from 45 to 65 percent higher than at cities where two or more carriers competed. And just last week the Transportation Department announced it was