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Making sense of a mega-merger

Okay. It's official: Continental and United have agreed to merge their network airlines to form the world's largest air carrier.

Based on recent merger activity, most recently that of Delta and Northwest, let's assume the marriage will be consummated. Continental will be absorbed into the United brand — and the two companies will operate as one.

What does it mean for Alaskans?

On the surface, not much will change. Neither Continental nor United has a sizable presence in the Anchorage market. In fact, since both United and Continental are part of the "Star Alliance," they already cooperate on pricing, schedules and frequent flyer mileage plans, along with USAir and Air Canada.

The short-term effects of this merger will be felt in Cleveland — which probably will lose its hub status. Service between hub airports, such as Houston-Washington, DC, probably will be reduced.

In fact, the reductions in service are the biggest parts of this story. And that underscores the larger view: network airlines are shrinking. They cut capacity in 2001 after 9/11 and they've been cutting capacity ever since. It's the low-cost carriers such as jetBlue, Southwest and Air Tran that have been growing. The only real growth for the legacy carriers has been the amount of acreage they occupy in the airline graveyards of the Mojave Desert.

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