What You'll See As Airlines Merge

Expect higher prices and fuller flights -- but maybe a free ticket.

In recent weeks, delta and Northwest Airlines agreed to merge (although there are a lot of hurdles to clear before it's a done deal), Frontier Airlines filed for bankruptcy, and four smaller airlines -- Aloha, ATA, Eos and Skybus -- went out of business entirely.

Meanwhile, a coming merger between United and US Airways is rumored, and British Airways is looking for alliances with American and Continental airlines.

Unfortunately, as this struggling industry tries to right itself, passengers are facing fare increases, fuel surcharges and fees on top of fees for everything from legroom to luggage. Mergers won't help. Consider this: In six busy markets where Delta and Northwest now fly nonstop routes head-to-head, including Atlanta to Detroit and Minneapolis/St. Paul to Salt Lake City, the two carriers account for more than 85% of all nonstop passengers. Less competition in those markets will almost certainly lead to higher fares, says Kevin Mitchell, of the Business Travel Coalition.

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The good news is that your frequent-flier miles are safe. In fact, combining miles from two carriers may push some fliers over the 25,000-mile threshold for free tickets through most programs. The black cloud within this silver lining? Higher demand for reward seats when flights are likely to be scaled back is a recipe for frustration.

In these turbulent times, travelers shouldn't buy tickets for travel more than three months in advance, advises travel blogger Tim Winship. And pay with a credit card so you can claim a refund -- just in case your airline disappears into the wild blue yonder.

Anne Kates Smith
Executive Editor, Kiplinger's Personal Finance

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage,  authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.