We're going to give an old airline term a different twist: root structure. It's not a reference to where an airline flies; it's an emerging business model in which an airline entrenches itself – deeply – in tactics designed to ensure survival, at a minimum, and promote prosperity by whatever means necessary. How the airlines are implementing this root structure has many airline customers wondering about what's to come and how they can prepare. In this segment we will look at two airline tactics – purging and merging.

Tactic 1: The Purge

It's a fact: an overloaded plane cannot take off safely, if at all. When airlines are weighed down with debt, out-of-control expenses and troublesome industry developments, they begin to purge their excess burdens. Staff cuts, the elimination of routes, aircraft fleet reductions, and overall capacity downsizing are an industry norm right now. With slowing economies in America and Europe, the trend is expanding. Asian carriers have cut flights as a result of rising costs and shrinking demand and U.S. carriers that once clamored for prized routes to China are asking authorities to allow them to delay the startup of these recently-won services.

What to look for:

The mention of capacity cuts and staff reductions should clue you in that the troubles ahead continue. IATA predicts over US$4 billion in losses for the industry in 2009 even with the stability of lower oil prices. Take a closer look at an airline's balance sheet when considering your next travel plans, especially if you intend to travel several months from now. Airlines with the least amount of disposable cash on hand are in the most precarious situations. While some carriers manage to fly through some form of bankruptcy protection or administration, others may simply cease operations. Buy healthy, buy early and make sure that your purchase is protected by some form of travel insurance or credit card purchase protection. Weaker passenger demand might mean lower prices during slow periods, but there is also a greater risk that a scantly solvent airline could collapse under the weight of growing industry pressures. Always have a plan B (or maybe C) if you happen to book a ticket on a financially weak carrier.

Tactic 2: Merge

Once clear of burdensome costs, airlines next turn their cleaner balance sheets into dance cards. They go in search of partners willing to share in resources that a single airline would find difficult to afford. Delta Air Lines and Northwest Airlines have cleared the final regulatory hurdle and are well on their way to becoming one huge airline. Lufthansa has been the busiest player in Europe, most recently adding Britain's bmi to its airline portfolio and moving up in the bidding for Austrian Airlines. Where airlines are not ready or able to merge, alliances are formed to ensure both market dominance and expanded network reach. British Airways, Iberia Airlines and American Airlines are the newest aircraft tails wagging at the alliance trough. With Continental Airlines looking to join United Airlines, Lufthansa and other major players in the Star Alliance, the emerging multi-carrier behemoths will undoubtedly battle to determine which group becomes the alpha dog in the global airline marketplace. Whether you see these actions as matches made in heaven or forced marriages with doubtful results, the lines in the sand will be drawn sooner than later.

What to look for:

There is one ironclad consumer law that we can always count on – the less competition there is, the likelier it is that we will pay higher prices for a product or service. Competition drives down prices, though some airlines argue that they can reach levels too low to turn a profit. If mergers and alliances ensure the survival of strong, healthy carriers, this is good for the industry. Yet, as one blogger commented on the Delta-Northwest merger, "sometimes mergers are like two really ugly people deciding to get married because they've convinced themselves that they're going to produce a good looking child." Mergers don't always work the way airlines say they will, and the customer could wind up with the short end of the deal.

IAPA supports strong and fair competition and it remains to be seen whether competition among alliances provides the same consumer benefits as competition among individual carriers. Our members can seek departures from alternate airports where competition is more prevalent if they find prices creeping uncomfortably skyward. Keep an eye on airports like Minneapolis-St. Paul (MSP) in the United States. The Delta-Northwest behemoth will be super-dominant; but with low-cost champion Southwest Airlines and its "Southwest effect" coming soon to MSP, fares may stay lower as a result. Also, be aware that merged airlines often take a while to be fully integrated. Labor battles over unions and seniority often emerge and reservations systems take time to be integrated. Expect to deal with each airline separately for quite some time after a merger, even though they are considered one – on paper. The good news is that frequent flyer programs are typically consolidated, giving you more miles on the merged airline if you had accumulated miles on each one separately.

In our next segment, we will look at ways airlines are defending their turf – not in the air or on the ground, but in cyberspace. Also, the fee-ding frenzy continues as airlines cling to the expectation that add-on charges are here to stay.