NWA/DELTA MERGER


#1

What do you think about this merger? It will make the largest airline!


#2

I don’ think it should go through. The only people who will benefit will be the upper management of both airlines. They’ll be less competition (bad for consumers) and massive layoffs (bad for employees).

The way the unions are, the integration of the seniority list will probably take years.


#3

I was wondering why Delta didn’t go for a larger airline. Maybe it would have violated merger laws?


#4

Several possible scenarios here.

  1. Delta could have gone “shopping” for an airline to merge with and Northwest was the first or only one to try a merger.
  2. Northwest could have approached Delta first about merging.
  3. Delta’s or Northwest’s managment could have felt the other airline was more compatible (e.g. fleet, route overlap, etc.) than any other airline.

The size of the airlines doesn’t really matter as much as getting governmental approval. Let me give you an example. Suppose Delta decided to merge with The Grace L Ferguson Airline and Storm Door Company (extra credit for the source of the airline title). It has one aircraft and its only route is also flown by Delta. The feds could deny the merger because they would see Delta as merging with the airline in order to lessen competition.


#5

If I remember correctly, a lot of Delta cronies have envisoned being the biggest airline… As for this merger, I think it should go through. As I have stated before, this will not be a win for consumers but I think this 1) looks at the interests of the shareholders (which a company should always do) and 2) stabilizes the industry more. I don’t want prices to go up but REALIZE that it has to happen and I ACCEPT that.

One of the great benefits is this: Lets say city A has 3 flights to Detroit (on 50 seat CRJ’S) and 2 flights to Cincinatti (on 50 seat CRJ’S). The combined airline can get rid of the 2 flights to Cincinatti, and replace the 3 flights to Detroit with 75 seat planes and get rid of those 50 seat regional jets. This will mean less seats in the market and therefore higher prices but this could lead Delta to a more profitable airline. Here is how I see there network and is a near clone of the one I layed out in another thread:
HUBS- in order of size
ATL- the mega hub lives on, takes some MEM traffic
DTW- serves east well, takes a lot of CVG traffic
MSP- a good transpacific gateway, continues stronghold in midwest
SLC- reduced, gives reach in west
JFK- serves the big city, good transatlantic gateway along with ATL

FOCUS CITIES
CVG
LAX
BOS- I start to question this focus city as Delta seems to be losing their strength here.
IND

DROPPED CITIES (as focus cities or hubs)
MEM
LGA

Anyway, I hope Pawlenty and the powers that be in Minnesota make Delta pay the money they own MSP. Minnesota has bailed out NWA over 1.5 billion and should pay for their failed commitments to the state.


#6

I would rather see massive layoffs then a whole airline shutting down because of the industy, and seeing even people unemployeed. I see it highly unlikely that a legacy carrier would shut down, but they will shrink and lay off. Layoffs are inevitable.

The only thing I don’t like in mergers is the massive bonuses the idiots that call themselves “CEO” will get.


#7

Remember Braniff and Pan Am? Both would be called legacy carriers today and both shut down.

There’s also Eastern, although their circumstances were slightly different.

On the international scene, Sabena and Swissair, both legacy carriers (which I take to mean airlines that have been in existence since the 1930s) both shut down.


#8

The way the unions are, the integration of the seniority list will probably take years.

Make that union…only the pilots at delta are unionized


#9

They will never drop their slots at LGA. LGA slots are a money machine.

I think this merger is good for the industry as a whole. Delta won’t get any real advantage from being the “biggest” airline.

I think this merger going through will fix a lot of the problems in the industry. The whole “other airlines will scramble to find merger partners” is media-driven BS.


#10

I’d say its good for the passengers depending on how Nelta goes about it. Sure higher prices, but it means quite a few more options should your flight cancel.


#11

Is Nelta the name they agreed on for the merger?


#12

I don’t mean dropping the city all together. I mean dropping it as a focus city. They already have a hub at JFK, and New York is not a fun place to compete with (Jetblue, Continental, American, US). The competitive aspect of New York most likely makes the focus city barely profitable, if not losing money. Take AA’s jfk-lhr route. Everyone thinks this is a huge money maker for AA when in reality there are a lot of international routes that make them more money.


#13

No, Nelta is not the name they picked. Delta has stated that they will be keeping their name throughout the process. I was being facetious.


#14

Thanks.


#15

The reason they wouldn’t use Nelta is that both Delta and Northwest are established names, and using “Nelta” or “DeltWest” wouldn’t make sense as they would lose brand recognition


#16

**Delta/Northwest merger approved by stockholders of both company.
**

Delta is to be the surviving company. Headquarters to be Atlanta.

The vote was 99% for the merge by Delta stockholders and 98% by Northwest stockholders.

If approved by regulatory agencies, the airline will be the world’s largest in terms of traffic and the largest in terms of revenue in the USA.

usatoday.com/travel/flights/ … s-ap_N.htm

iht.com/articles/2008/09/26/ … /26air.php


#17

The only thing left is regulatory approval from Congress. I can’t believe it takes Congress this long. I mean it should take a week to decide merger or no merger.


#18

Believe it or no, it required approval from that evil multinational government called the European Union. It has already been received:

European regulators clear Delta-Northwest merger

The Associated Press
Thursday, August 7, 2008

European regulators said on Wednesday that they had cleared Delta Air Lines’ proposed acquisition of Northwest Airlines, concluding that the transaction would “not significantly impede effective competition in the European Economic Area or any substantial part of it.”


The commission said in its statement that it took into account that Delta and Northwest already cooperate extensively on trans-Atlantic routes with the European SkyTeam member airlines, namely Air France, CSA Czech Airlines and Alitalia.

Source: Intertional Herald Tribune


#19

What control does the european regulators have in this decision? I mean, can they really block the merger.


#20

Who knows? I really think the EU is out of control. How any country could turn near-total control over to a body like the EU is beyond me.