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From the ramp to the gate to the cockpit to HQ, airlines are built and run by people. So when labor strife is afoot, as it is for Delta Air Lines (NYSE: DAL  ) and Northwest Airlines (NYSE: DWA  ) over a pending merger, it's time to ask: Can these carriers pull up in time?

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For its part, the International Association of Machinists issued a statement after Northwest shareholders approved the deal last week. Here's Union General Vice President of Transportation Robert Roach, Jr.:

The same lack of regulation that unhinged our financial markets has created cyclical havoc in the airline industry for the past 30 years, leading to countless airline bankruptcies. The government must stop treating symptoms and start curing the illness plaguing the airline industry. Mergers will not help troubled airlines; sane federal regulation of the industry will.

So let me get this straight. Airlines made stupid bets on bad debt, and they'll now plunge into bankruptcy wholesale without a federal bailout? It's eerily reminiscent of my semi-serious call to nationalize the airlines from April.

Roach is partly right; mergers alone won't cure what ails the airline industry. It needs a total overhaul. But is additional federal regulation the answer? I doubt it. Too many airlines are flying today.

Instead, I agree with the leaders of Delta and Northwest, who in the spring were calling for a 15%-20% fare increase to offset oppressive fuel costs. But carriers also need to get creative. They need to learn from Apple's (Nasdaq: AAPL  ) retail innovations and craft an in-flight experience that's unique and, for them, profitable. (I've got several ideas about that.)

Unions have a right to complain. Workers are being paid less to do more. But opposing a merger because, well, it's a merger, and because jobs will be lost, makes no sense. Neither does a federal handoff.

Want to improve the working environments for your members, Mr. Roach? Great. Let's see you debate the merits of the current approaches. Is it better to nickel-and-dime customers via bag fees and $1 coffee, as U.S. Airways (NYSE: LCC  ) plans? Or are new services in order, as UAL's (Nasdaq: UAUA  ) affinity innovations suggest?

Or maybe there's another answer. Just be sure that it's better than "mergers stink and it's time for the Feds to step in." They're a little busy right now, sir.

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Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. He hunts for the best of tech as a contributor to Motley Fool Rule Breakers. Here's how to try this market-beating service free for 30 days. See all of Tim's Foolish writings. The Motley Fool's disclosure policy labored over whether to have beer or wine during last night's dinner date with the Fool's trading guidelines.

Read/Post Comments (3) | Recommend This Article (4)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 29, 2008, at 2:14 PM, joenyt wrote:

    The Machinists Union is supporting federal legislation because stupid airline executives are unable to charge enough for fares to cover the cost of providing their service. The IAM is not calling for complete regulation, but for sane, not Foolish, pricing so passengers won't get charged a fee for using toilets. Read Mr. Roach's testimony at and learn somethiing.

  • Report this Comment On October 10, 2008, at 2:31 PM, OHCITY wrote:

    "...Northwest Airlines (NYSE: DWA) over a pending..."

    There's a typo in the above article, DWA should be NWA.

  • Report this Comment On October 13, 2008, at 9:53 AM, NotBrainSurgery wrote:

    The IAM is making this statement becasue they see thier revenue base slipping away. They stand to lose a lot of dues revenue when the larger primarily non union Delta absorbs the smaller NWA and they get ousted.

    I love the post citing stupid airline executives not being able to charge enough fares. As if that's the solution...there's a big board room and one guy says hey we need to make more money anyone know how we can to that and another pipe's up we could raise our prices....nah that'll never work".

    Revenue Management in the airline business is one of the most complicated and sophisticated supply and demand excercises in business today.

    Mr. Roach has little to teach and I wouldn't go referencing him to educate anyone unless it's how to prey on the average workers fears.

    The NWA DL combination will add revenue streams and decrease unit costs so that the worker is protected by a healthy company, this is the only thing that protects a workers job.

    As for innovation's, the addition of WiFi to Delta's planes, ease of check in from your Blackberry, International lieflat seats, top tier customer service rankings the past 5 years....I think they are positioned to do very well.

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