A good take on the merger reasons

[GSEMAN]

I certainly would find the size of the New Delta Unions a force to be reckoned with for demanding industry leading contracts (NOT just pay) or STRIKE while the iron is hot! (which means with in the first year of approval of merger)


But a Delta-Northwest deal, even if agreed to by both managements, is not certain to take place.

United Airlines parent UAL Corp. (UAUA, Fortune 500) failed in its attempt to complete its purchase of US Airways that was announced in 2000. Concerns about the impact on passengers and airfares is likely to bring intense scrutiny of this deal from both Congress and antitrust regulators here and in Europe.

Delta and Northwest also could run into trouble with the pilot unions for both companies even though the airlines do not necessarily need the approval of these unions for a deal to go through.

Delta and Northwest both filed for bankruptcy court protection at almost the same moment in September 2005, and used that process to significantly reduce their capacity and labor costs.

Delta had to fend off a hostile takeover attempt by US Airways (LCC, Fortune 500) in late 2006 and early 2007, just before it emerged from bankruptcy in April 2007. But since that battle, its management has said it was open to the right combination.

Delta posted 5% growth in the number of miles flown by paying passengers last year, which is better than the industry average. In fact, it is the No. 3 carrier by that measure, behind only United and AMR Corp.'s (AMR, Fortune 500) American Airlines.

Still, after making money in its first six months out of bankruptcy, it returned to a loss of $70 million in the fourth quarter in the face of high fuel prices, and it has said it expects to lose money in the current quarter as well.

Northwest, which emerged from bankruptcy in May 2007, is the nation's No. 5 carrier. It had flat traffic last year and essentially broke even in the fourth quarter, posting an $8 million net loss after two quarters of profit. It is forecast to see a bigger loss in the first quarter though.

Northwest was the No. 4 airline in the country when it entered bankruptcy, but it has shaved capacity enough to fall to No. 5, just barely ahead of Southwest Airlines (LUV, Fortune 500), the carrier that has helped reshape the industry by devising a lower-cost business model than the traditional hub-and-spoke system used by more established carriers.

A deal announcement could open the way for No. 4 Continental Airlines (CAL, Fortune 500) to hold its own merger discussions. Northwest has held a so-called "golden share" of Continental, which allows it to block a deal for its codeshare partner. But it loses that veto by entering its own combination. There are rumors that United and Continental are eyeing their own combination.

Consolidation would come at a tumultuous time for the industry. Earlier this month, low-cost airline ATA filed for bankruptcy and said it would cease operations. Last week, Frontier Airlines also filed for bankruptcy protection but said it would continue flying during its reorganization.

Also this past week, American was forced to cancel thousands of flights due to safety inspections of its MD-80 jets.

- CNN contributed to this report. To top of page http://money.cnn.com/2008/04/13/news/compa...sion=2008041407

With time, most will find that union representation is unnessary at Delta. One only needs to talk to people from WN & PA. I have many friends from these two companies and I respect what they have brought to our company. We must all come together as a team now. Our survival in this industry counts on that.

 

[North by Northwest]

With time, most will find that union representation is unnessary at Delta. One only needs to talk to people from WN & PA. I have many friends from these two companies and I respect what they have brought to our company. We must all come together as a team now. Our survival in this industry counts on that.
[/quote/]

Please...save that mush for breakfast. Your non union days are over...IF, this passes. Delta's "lowest costs" of the legacies says plenty of the brainwashing that has occurred. Which falls in line with the equity peanuts proposed for the other 65,000 employees vs. pilots. My GOD ...some of you people must love living under the boot print. THANK GOD the majority of Delta people have some brains! "WE" won't be doing anything...The Sun hasn't set on the Redtail by a loooonnggg shot.

 

[lineguy43]

Please...save that mush for breakfast. Your non union days are over...IF, this passes. Delta's "lowest costs" of the legacies says plenty of the brainwashing that has occurred. Which falls in line with the equity peanuts proposed for the other 65,000 employees vs. pilots. My GOD ...some of you people must love living under the boot print. THANK GOD the majority of Delta people have some brains! "WE" won't be doing anything...The Sun hasn't set on the Redtail by a loooonnggg shot.
[/quote]

Man are you on the company Kool Aid or what? Just out of curiosity how long have you worked for nwa and what do you do there? If I can be so bold.