Delta and Northwest Announce Merger

"For consumers, the downside is that the airlines that merge are going to be trying their hardest to take planes out of the mix, to take destinations out of the network, and, therefore, they can have fewer choices and higher prices," Richard Aboulafia, aviation consultant with The Teal Group, told ABC News Friday.

For airline employees, the merger is also likely to create a new landscape.

Atlanta-based Delta employs nearly 49,000 people, while Minneapolis/St. Paul-based Northwest employs another 30,000. The airlines would be tasked with trying to merge their staffs, unions and operating systems.

Delta and Northwest also fly just one type of jet in common, meaning consolidating their fleets will be difficult. Delta operates a fleet of nearly 600 aircraft and Northwest operates a fleet of more than 500.

For pilots in particular, the effort to merge Northwest and Delta has been tricky. The merger has stalled in recent months because the 11,000 pilots employed by the two airlines could not come to an agreement on integrating their seniority lists.

Many say the merger could also set off a ripple effect throughout the industry and prompt other carriers to merge. That would result in even less competition and fewer choices for passengers.

"There's a feeling that if Delta and Northwest do create the biggest carrier, that everyone else will want to follow," Aboulafia said. "It's the theory of the musical chairs, basically. They could easily be followed by Continental and United — they're considered the most likely follow-on merger."

Next Steps

Now that Delta and Northwest managements have agreed on a merger, the Department of Justice also needs to sign off on the deal. Experts said there's a rush for that to happen sooner rather than later because the airlines expect it would be more challenging for the merger to go through during a possible Democratic administration.

Still, the airlines are confident the deal would be good for business, allowing Delta and Northwest to merge their strengths, especially in different areas of the international market. Delta flies to Europe while Northwest flies to Asia.

"There's real synergy between the two networks," Aboulafia said. "It's, arguably, from a geographic standpoint, from a network standpoint, the best possible merger."

-- This embed didnt make it to copy for story id = 4650633. -- This embed didnt make it to copy for story id = 4650633. -- This embed didnt make it to copy for story id = 4650633. -- This embed didnt make it to copy for story id = 4650633. -- This embed didnt make it to copy for story id = 4650633.
Page
  • 1
  • |
  • 2
Join the Discussion
blog comments powered by Disqus
 
You Might Also Like...