making a $11 billion deal, a headache for you that is going to make four airlines, american, united and deltand southwest that accounts for 90% of all domestic flights. fewer carriers and fewer planes but the same but not more passengers. are you catching the drifted here? >> it's not a good drift. two ceos says nothing is going wrong, places will be low. prices are going to go up. we saw prices go up after the delta merger as much as 20% and over the past 12 years, prices have gone up 27% but that doesn't include baggage fees and extra leg room fee. they are only going to go higher. >> i cringe when i heard the news. it's already a poor experience. jet blue, i'm looking what about a laker star? i know survival in the business is terrible but as a flyer i cringe when i heard this county. >> they have to do this. >> they don't. what are you crazy? why are they doing it then? >> neil: gerri's point it's going to lead to higher prices? >> what is the solution? we know that prices are going up. this is lousy industry. if the barriers to entry are too high, that is what we to have address. we are

by merging and creating a networking like delta and united we can pay our employees more and we have agreed to pay them the same as delta and united. in addition, when we talk to people in the hubs we talked about so many times today, they don't talk to us about price issues or price concerns. they talk us to about finding ways for there to be more service to grow the hub, finding ways to create more december makes for travel. all of that can be accomplished by the merger, congressman. that's what we're trying to do today. >> well, you're both doing okay now. you know, what i hear you saying is that it may get tough for later, and we want to be prepared and so we're going merge now. and i'm not sure if goes along with the american antitrust institute. do either of you know what the economics scholars are thinking in terms of this kind of discussion, mr. sagers? >> yeah, i mean, there's a lot of study of airline fare changes, and it's in some dispute, but there's substantial evidence that on specific city pairs prices go up when concentration goes up. and we hear a lot, by the way, --

united continental. why? >> yeah. when you look at the transaction that was announced today, it is $11 billion transaction. and i think deltat was about $13.5 billion in equity value and united was 8.5 billion in equity value. arguably the united and delta root structures are going to be much structure than the route structure american and us airways will have. they won't have the big pacific division. yes, american is big on transatlantic and south america but really so are united and delta. we think if american, the new american deserves to sell at 11 billion, united deserves to sell at least from that level because from a balance sheet perspective the united balance sheet is two years ahead of where this combined balance sheet is and so on. tracy: do you worry about union push back on this deal at all? >> no, no, we don't primarily because they negotiated a mem up did of understanding with all the unions to contemplate exactly this outcome. ashley: does size matter in the airline industry? so much has been made about how big this deal is but it really matter?. >> well, we think it does, yes. it is one of those cases wher

united and delta that can compete strongly against us.you've been -- it sounds like you need a little bottle of water over there. here i go. dare i bring up marco rubio. but you've been pushing for the merger for a long time why and why now? >> well, it makes sense now. it's made sense for a while, we think, but sometimes all the planets need to align and it's taken a while for us to get here but fortunately we've come to an agreement it makes sense for all of our customers and employees and investors and we couldn't be happier. >> what's the benefit for american airlines. american hasn't done so great litly. what's the benefit for american with this emergencier? >> well, you know, at american, we've been in the middle of a restructuring which has brought down our cost structure and strengthened our bottom line but at the same time, we geeshet a new fleet of aircraft on the way, hundreds of new airplanes. we've launched a lot of new products and services and we've recently been refreshing our brand, so we've done a lot of new things. and

approved by anti-trust regulators, 86% of domestic flights would be handled by american and three other carriers: united, delta and southwest. already, analysts predict airfare will rise 5% across the board this year. some think the merger assures that beyond this year. "there will still be competition, but it does mean slightly higher fares." as for frequent flyers, miles on both carriers will be combined. but miles earned on u.s. airways, currently applied to united, will shift to american, but not right away. in fact, it may take seveal months before passengers see any significant effect. the merger still has be approved by federal anti-trust regulators, american's bankruptcy judge and shareholders of u.s. airways. carnival is working to get passengers home following a four-day cruise that turned into a more-than-week-long nightmare. the triumph cruise ran into trouble last weekend when an engine fire left the ship adrift on the ocean. carnival is offering passengers $500 on top of paying for their travels home. the company estimates repair costs will cause an 8- to 10-cent drop in earnings per share. but t

and he risks u.s. airways being marginalized without getting the deal done. tried to do it with delta and united, failed twice. this is where he takes ceo of american. he worked with the labor unions as well as the creditors to get the deal done. >> rebecca as mentioned in the piece before flyers have been down this route before, what is in store for passengers with this new partnership? >> we have been down this route before and generally speaking when two major airlines merge, prices like you just heard in the piece, prices can sometimes have a price war. sometimes the consumer initially gets a better deal but over time, less competition in general means more prices. higher prices. >> rebecca jarvis, that's the hangup, all right. >>> later we'll talk to the ceos of american airlines and u.s. airways, they will be here with us to give us the inside story about today's big announcement and if it does mean higher prices for you, that's ahead on "cbs this morning." >>> meantime the nightmare aboard the carnival cruiseliner "triumph" could finally end today. passengers are stranded in grotesque con

and complex to integrate two big airlines. so what do you think executives over at delta and united continental were talking about today. are they going to be making any changes now that this merger is official? >> well, this is probably one of the most anticipated mergers ever, which again is the reason why it didn't have any effect on the stock prices today, i would guess. and these people were expecting it. they're planning for it. and they were, believing that the industry will benefit by having these two weaker carriers combine into what will eventually be one strong carrier. >> susie: and what about travelers. you heard suzanne pratt's report about ticket fares. a lot of people are concerned about it. you have been covering the airline industry for years. you've seen all of these mergers. what does this mean for ticket fares? >> ticket prices will solidify. we won't have the giveaways we've had for the five or ten years before. this was a trend that was developing already as airlines were better controlling capacity. and this will just add to that. it's still very competitive industry, however. you've got four rea

united states will be operated by one of four airlines. you are looking at delta, united, certainly american now the margest and southwest. when you look at the deal put together, look at how large american is going to be, relative to its competitors. it will be larger than united. larger than delta and significantly larger than southwest. further down the line, you see jetblue. but really, the big four in the country are the four you see there from american to southwest. what does this mean for ticket prices? you hear people say, when you have a merger like this, prices go up. the fact of the matter is this is likely to win antitrust approval and it is not expected to generate huge fare increases. most people look at this and say, there might be a few here and there but generally not soaring. where you will see a difference following this merger, we are already noticing it and that's with investors. look at shares of us airways. if you were in the stock over the last year, boy, did you take a ride in terms of expectation of consolidation. it is selling off today. down almost 9%. and then when you look at delta and united

and the us airway shareholders leaving u.s. travel dominated by four more jail airlines. the american, united, delta and southwest. they would control three 40s of all airline traffic in the country. >> and the weather outside, i would put five bucks on delays flying into sfo. >> you are saying the weather is frightful in. >> fogful. >> fogful. >> okay, register that and trade man it. here is a look at what is going on, milder this morning. we have mid-30's around santa rosa and novato. everyone else including napa, is in the upper 30's to mid 40's. san francisco is at 47. san jose is at 42. we will hang out in the mid-30's to mid-40's with fog around the north bay and parts of the bay shoreline through 7:00. it will fade quickly. we will see sunshine faster today and temperatures will be nearing 60 by lunch hour. if you are headed out for an early dinner we have sunshine and temperatures in the mid-to-upper 60's and clear and mild for evening festivities on valentine's day and low-to-mid 50's. not a heavy coat needed this time. a warmest day tomorrow will be in the mid 60's to 70 again, and winds will shift on sa

and wall street wins. if this deal goes through, just four carriers, american, united, delta and southwest, would control 70% market. and while that could mean higher prices across the board, some say the merger could actually prompt fare wars causing prices to drop in big cities with most of the major airlines serving the same routes. >> prices could also go down because those fewer competitors are competing for the flying public. >> reporter: but whether fares go up or go down, don't switch frequent flyer programs yet. >> in the near term there probably is not going to be any change. >> reporter: the deal still needs approval of the federal regulators and the justice department and that could take months. if aevidence proper the combined airline -- if approved, the combined airline will fly under the name of american and frequent flyer points from both airlines will be hon order. the fewer honored. >>> pope benedict xvi held a meeting with priests today telling them he will be hidden from view when he steps down at the end of the month. he says he will live a life of prayer in a former monastery inside the

dug doug parker and/. >> before the deal you had two megacarriers in delta and united. now you'll have a third carrier, that is fully competitive with those two on a global basis. in fact in the global context, you have three global alliances, star, sky team and one world. this deal bringing u.s. air into the fold of american makes a stronger, more robust competitor. >> i guess as a regular flying looking at the industry, i know you will be the largest when all is said and done. but there are still only so many planes out there. demand has picked up, consumers are used to more crowded planes. good for you in the long run. but there is this concern about fees going up for everything from where you sit to what you get on plane. and it's turned out to be a ask you standings moneymaker for all airlines. billions have come off added fees. are we going to see more? >> well, there's clearly more of a trend of having customers pay for things they value most and not pay for things they would rather not purchase. that's been constructive for the industry. i think it has been one

united, delta and now american. the new airline will be based near the hub at dallas/ft. worth. a big loss for arizona, because us airways had been head quartered in suburban tempe. >>> police say the death of a 94-year-old man was the result of a homicide. he was found dead in his home last night. pat collins is in faurndia with the word his man and his wife have been a frequent targets for criminals. pat? >> reporter: doreen, imagine living to the age of 94 and then dying this way. a grid search by police tonight at the scene, looking for a possibility weapon. looking for signs of a break-in something that could lead them to the suspect, and this the first murder in alexandria in over a year. his first name was elmer, but just about everyone called him joe. joe, 94 years old, found dead inside his home last night in the del rey section of alexandria. police are calling it a case of murder. >> we all just loved him. he was i can't imagine anyone doing anything to hurt joe. >> they had complained about thefts at their home before. they have security cameras. they have security l

airline could keep fares in it check by keeping united and delta from using their influence to fares.dickases competition. it doesn't decrease competition. >> and another detail. the combined airlines expect the to offer more than 6700 daily flights to 56 countries. big, big deal. shannon, back to you. >> shannon: brenda, thank you. >> thank you. >> shannon: in other business news even in the face of a slow economy and stubbornly high unemployment more than half of small business owners in january said it is very or some what difficult to find a qualified employees they need to staff their firms. according to the latest wells fargo gallup small business index survey, 53% of those surveyed report they struggled to get the right people on their payrolls. the same as january of last year and one in four says the difficulty has hurt their business this the last 12 months. >>> she is a real life fairy godmother. meet the woman turning high school girls into cinderellas. ♪ try running four.ning a restaurant is hard, fortunately we've got ink. it gives us 5x the rewards on our internet, phone ch

. >> hi, lindsey, so now there are only three, three major airlines am we've got united continental, delta, and if this deal goes through, u.s. air, american, american airlines, so each of these airlines has been bankrupt at one point or another. so are we done now with bankruptcies and mergers? is this it? >> i certainly hope so, that we're done with bankruptcies. they've all been through the process just like you mentioned and through the process they've been able to drill down and examine their expenses. and right size things like pension, labor, and leasing costs. and they've been able to emerge leaner and stronger, they've also gotten smarter about charging for baggage fees, charging for food and charging to get on the plane earlier is so i think they're all getting to a better point. but a lot, they all have room to grow. >> well, you know, american was fighting this merger all along. and we still don't know if it's going to go through. but it wanted to stay independent. from what you have been reporting, do you think that american is better off being part of u.s. air or would it have don

united shareholders will own 28% of the stock while american shareholders will own the remaining 72%. this deal will help rescue it from bankruptcy and allow it to compete with the likes of delta and united, both of which a gone through mergers. >> we will be delivering the most value to our owners and the greatest benefits to our customers and our people. >> there are still hurdles to clear. at new york's jfk, passengers wondered what it meant for them. after this deal goes through, around three-quarters of all u.s. air traffic will be left in the hands of four major airlines -- american, continental, delta, and southwest. for frequent fliers, that raises the question, will this still be good for them? will it raise ticket prices? >> my first question is will i be able to use my air miles, etc.? >> nothing ever gets cheaper, and i do not think the merger is going to make flying any cheaper. >> to preserve competition, the u.s. justice department will want to bet the deal. when united merged with continental in 2010, the group had to sell some airport slots. american and u.s. airways may have to make similar concessions for this match to go ahead. bbc news, new york. >> it sho

deal and announced it overnight and it needs to i approved by american's bankruptcy judge leaving travel in the united states dominated by four airlines, american, united, delta controlling three quarters of all airline traffic. how much are you spending on your honey this valentine's day? the acknowledge american will spend $130 on gifts which is $18.6 billion for our collective total. the national retail federation survey shows $13.5 billion is spent on chocolates and $4.4 billion on diamonds and gold and silver and $1.9 billion on flowers. if you want to compare men and women, guys average $175 and ladies drop $88 on their sweetheart. >> no surprise on the later figures. breaking news from the ketchup world. >> in the market for used car, you may want a better deal on vacation. >> jane king explains all of this and tell us how much her husband is spending on valentine's day this year. >> we take it easy on valentine's day, my birthday is in january, we have christmas in december, valentine's is not big spending day. so it make sense that a lot companies are getting together, and ketchup make heinz agreed to sell itself to warren buff get in a deal worth $2

and i think -- get this. stop trading for a moment. i any united continental, delta, and u.s. air are all buy, buy, buy.t's right. screaming buy. did i just recommend three airline stocks? you bet i did. just like the rental car companies, which i despised because they compete against others so aggressively, and consolidating to a slap happeny, for the first time airlines are doing so too. i like the pending u.s. airways amr combination. a blessedly anti competitive home run. unless, of course, are yyou are frequent flier. you still -- are you still worried. still worried, i get that. this time about the possible that italy could cause ripples to the banking system because of the interconnect edness of the financials. it fell spell-checked okay. didn't that cause us to be down 200 points on monday? a big rebuttal. jpmorgan. this ran 1.68 after an analyst meeting. this country is not to be derailed by anything happening in italy. yeah. at least we see it for what it is. a main italian politics as opposed to our politicians won't bring down our banks anymore, which means we should stop focusing on the err

and u.s. airways made the big announcement. the two carriers are going to merge to create the largest airline. that means air travelers will now have just four big carriers to choose from. american, united, delta and southwest. in addition when the two airlines combine routes it will likely eliminate competition in some cities and push fares higher. >> we're definitely going to be looking at higher fares that's partially because fares have been declining continuously for the last eight years and they are going to have to turn up. but the lack of competition i'm worried will also play a role in it. >> reporter: regulators still need to approval the deal and the airline may have to make concessions. approval is also needed if american's bankruptcy judge. the news drove american airline's stock up to two preponderate $12. but it had the opposite effect for u.s. airways. >>> twitter is going to start ranking your tweeting. the number of followers and the popularity of your comment will factor in. >>> reports that european markets shrank. >>> people opposed to using drones were at today's hearings and said they're worried about privacy. but police said that drones would be useful. the hearing ended

and flight attendant's iunions if they are ironed out. the deal with bankruptcy court approval has antitrust regular tlierts. if all of this happens we could have four major carriers remaining american, united continental, delta and southwest. it raises pricing concerns but it could be a good thing for small airlines with less competition from the major carriers. >> it could save 1.2 billion in revenue and cost savings. >> yeah, all of this could be wrapped up by february 15th. >> speaking of cost cutting measures a 10,000 dollar bachelor degree? >> yeah. it sounds amazing. more governors are pushing the idea of making college affordable. it is popular among students and families who are frustrated with the ever rising tuition costs that aren't guaranteeing jobs upon graduation. college tuition has increased 40 percent while student loan debt tops a trillion dollars. students have the criteria to earn the degrees. they have novrn gores in florida, texas, wisconsin certain lawmakers embracing the challenge of the 4 year state university education honestly for the bargain price of 10,000 dollars. >> average cost for a four-year degree is 30,000 dollars. >> you would be hard pressed to find schools that low. so

and u.s. airways made the big announcement. the two carriers are going to merge to create the largest airline. that means air travelers will now have just four big carriers to choose from. american, united, deltaely eliminate competition in some cities and push fares higher. >> we're definitely going to be looking at higher fares that's partially because fares have been declining continuously for the last eight years and they are going to have to turn up. but the lack of competition i'm worried will also play a role in it. >> reporter: regulators still need to approval the deal and the airline may have to make concessions. approval is also needed if american's bankruptcy judge. the news drove american airline's stock up to two preponderate $12. but it had the opposite effect for u.s. airways. >>> twitter is going to start ranking your tweeting. the number of followers and the popularity of your comment will factor in. >>> reports that european markets shrank. >>> people opposed to using drones were at today's hearings and said they're worried about privacy. but police said that drones would be useful. the hearing ended with no decision on whether the sheriff will move ahead and buy a drone. >>

and wall street wins. if this deal goes through, just four carriers, american, united, delta and southwest, would control 70%the u.s. market. and while that could mean higher prices across the board, some say the merger could actually prompt fare wars causing prices to drop in big cities with most of the major airlines serving the same routes. >> prices could also go down because those fewer competitors are competing for the flying public. >> reporter: but whether fares go up or go down, don't switch frequent flyer programs yet. >> in the near term there probably is not going to be any change. >> reporter: the deal still needs approval of the federal regulators and the justice department and that could take months. if approved, the combined airline will fly under the name american and both carriers say points earned on either carrier will be cross honored. >>> today is the day to celebrate love, right? coming up how some bay area businesses are cashing in on the contempt of valentine's day. >> judging by traffic trying to get on the bay bridge, san francisco is the be for valentine's day evening. 70 degrees

but after so many mergers in recent years, only four airlines, american, delta, united and southwest,ould be left with 70% of the u.s. market. while airfares haven't risen much in recent years, experts warn, less competition could ultimately drive up prices. >> if you're looking out over the next three or four years of your vacation plans you'll average between 5 and 10% airfare increases year over year once you hit 2014. >> concerned about the overall number of flights available, the cost of those flights. >> more and more mergers, prices are worse, choices are less. doesn't add up. >> reporter: for now, both usairways and american will continue to fly independently. passengers will fly the airline on which they're booked. and until the merger is complete, the frequent flier programs will remain separate. ultimately, a combined frequent flyer program could include tens of millions of people with more destinations to choose from, but all competing for that upgrade or the free trip. tom costello, nbc news, washington. >>> there is news tonight from the world of science. and this could

after delta bought northwest, and united and continental, and southwest, and they are 4 super carriersre. so by just the virtue of fewer choices there is a fear that they will get stuck behind the 8-ball, lay the elay them of thr concern. >> i think it enhances competition, before this deal you had two mega-carriers with delta and united, now a third that is fully competitive with those two on a global basis if you look in global context, you have their global alliances, sky, star, -- star, sky team and one world, this team bringing u.s. air why the fold of american makes one world that much stronger, and a more robust competitor with star and sky team. neil: i guess, as a regular flyer, and looking at industry now, you will be largest whether all said and done. but there is still so man planes out there -- the demand has picked up. consumers are used to more you'ded planes, but there is a concern about fees going up. from where you sit on the plane to what you get on the plane. are we going to see still more? >> well there is more of a trend of having customers pay for things they val

and talk about airlines. look how bad they all are. the era of consolidation is over. so we'll have three big airlines, delta, continental and united. it's unlikely we'll see big increases in prices which is what will drive these stocks further. remember, airline stocks, many of them, sitting right near five-year highs. i've been asked about the solar stocks, and they are all up again today. these are very funny stocks. they move on momentum. there's been no news today. there's been talk about finally a stabilization in prices for solar panels recently. who knows, those things go up and down a lot. i would note, take a look at the etf. etf for solar stocks, guggenheim puts it out. they really all bottomed riding around the election and there's speculation after that there, of course, there might be tax cuts before the election or tax breaks might be removed. obviously that's not going to happen, and maybe that's been a little bit of an effect as well on the solar stocks. guys, back to you. >> welcome back, by the way. i know you loved leaving florida to come back to the northeast. heading towards the close here, we've got about 50 m

and u.s. air shareholders but if it goes through this leaves u.s. travel dominated by four major airlines: american, united, delta and southwest. they would control three 40s of all airline traffic. >> redwood city is the latest city on the peninsula to implement a ban on plastic bags voting march 11 to require shoppers to use re-useable bag or pay ten cents for a paper bag. if approve the ban take effect april 21, earth day. >> volunteers armed with flashlights are patrolling trailers in concord near the north concord bart station because the lights have been out for months after copper thefts. thieves struck again last week blacking out ten street lights. some residents do not feel safe. >> 4:30 in the morning on the bicycle, if i hit someone, we are going to the hospital. it would be nice if the lights worked. >> we install warnings so pedestrians know the lights are out as they enter the path. >> concord has spent $1 million to replace the stolen conner wiring. >> the world series champion giants are in arizona for spring cleaning with pitchers and catchers taking field for the first time yesterday already. l

the combined carrier will have american airlines' new look and its old name ranking ahead of united which joined continental in 2010 and delta which absorbed northwest airlines in 2008. >> the only way to survive at least some of the airlines believe is to merge together, grow and then don't overlap as much. >> reporter: with american in bankruptcy it will be up to a federal judge to decide if the deal will be a good one for its creditors. >> american if it had not done some sort of merger would have been inferior to its bigger competitors in terms of its net worth. >> reporter: the department of justice will also have to sign off on the deal. federal regulators will look at whether the merger will mean less competition. >> americans will have a monopoly on virtually every route they fly. >> reporter: if the deal flies the world's four biggest airlines would control nearly 70% of all air traffic. experts say ticket prices could take off as a result. >> even though people say that, you know, this particular merger of u.s. airways and american airlines isn't going to raise ticket prices, i don't believe that one bit. >> report

airways and america west, delta and northwest, contiinental and united, and southwest and airtran. "well, it's the business travelers who are the most nervous here. on the liesure end there's some much diversion to discount airlines. but you take places like philly, new york out east, there's a lot of concentration there and there could a few effects." that was depaul economics professor joe schwieterman. he does not foresee regulatory obstacles for amr and u.s. airways to merge. boeing is giving its customers a heads-up that dreamliner arrivals will likely be delayed. manufacturing on the troubled aircrafts will continue, but boeing has said deliveries that were expected in the near future are either delayed or at risk of being delayed. some carriers such as norwegian air are giving customers the option of changing flights to later dates. the dreamliner has been grounded since january 16th. the faa is still investigating the aircraft's battery issues. your tax refund may be delayed, and the heming and hawing by lawmakers in washington over the fiscal cliff is blamed. according to

there's cutbacks in flights and schedules. >> reporter: after delta bought northwest the decreased competition sent ticket prices up more than 20% between detroit and atlanta. the unitedontinental deal resulted in 30% price increases between chicago's o'hare in houston and newark and san francisco. the biggest factor pushing consolidation is the price of oil. fuel accounts for 33% of an airline's operating cost. that's more than doubled over the past decade. industry analyst darrell jempgins. >> the biggest changing point in the last decade and even more so than 9/11 was the price of jet fuel. that became so bad that everybody was looking at a kind of "last man standing" scenario. >> reporter: jenkins is more optimistic about other experts about post-merger fares. he says the big airlines will have to compete with discount flyers like jetblue. the new airline will keep the american name. federal regulators are likely to approve the merger as long as they are assured some measure of competition will be preserved in the areas where the airlines are dominant. >> pelley: a cruise that many would like to forget is finally coming to an end. that story is ahead. ai how did i