The New Delta?

B

B.O.B.

Guest
Could Delta and Northwest merge?

By Marilyn Adams, USA TODAY

Delta Air Lines (DAL) and Northwest Airlines (NWAC) entered bankruptcy court together this week, and few will be surprised if they emerge together — as a single combined carrier.

The twin Chapter 11 bankruptcy filings Wednesday night, almost simultaneous and in the same New York courthouse, are leading many industry experts to believe the carriers may be exploring a merger within bankruptcy protection.

"I wouldn't be at all surprised," Benchmark analyst Helane Becker said Thursday. "In the past, these two airlines have talked and they have very little route overlap."

JPMorgan Chase analyst Jamie Baker said his firm "already has coined the term 'Delta Orient,' " a play on Northwest's former brand name, Northwest Orient.

Atlanta-based Delta is concentrated in the East and launches more daily flights across the Atlantic than any other carrier. Eagan, Minn.-based Northwest is concentrated in the Midwest and has a strong route structure in Asia.

The minimal route overlap is considered an advantage with federal regulators.

Airlines proposing a major merger would have to convince government regulators that the combination would not significantly reduce competition, or that one or both of the airlines would fail without the merger.

Northwest declined comment when asked about a merger with Delta.

In a conference call Wednesday, Northwest CEO Doug Steenland said the timing and location of the filings was coincidental. He added he has long believed consolidation among airlines is likely.

Delta spokeswoman Chris Kelly said Delta "expects there will be more consolidation in the industry. Right now, Delta is focused on its own restructuring efforts."

The twin filings, outrageously high fuel prices and declining hope for financial relief from the government could spark a round of merger talks as the remaining big troubled airlines scramble for partners.

A judge today is expected to approve a merger between US Airways and America West Airlines.

Five big potential partners remain: United Airlines, Delta and Northwest, all of which are now in bankruptcy protection, as well as American Airlines and Continental Airlines.

A merger of No. 3 Delta and No. 4 Northwest would propel the combined airline to the front of the industry pack.

It would pass American and United and become the biggest airline in terms of revenue passenger miles, according to an analysis by Back Aviation Solutions.
 

JFK777

Veteran
Aug 20, 2002
694
0
Delta & NW would make an excellent merger. With Hubs at CDG & AMS in Europe and Tokyo no other airline would have such hubs abroad. In the USA DTW, MSP, ATL and Salt Lake would give Delta NW hubs across the land. The fleets could be a problem but then Asia flying and European flying are two different animals.

NW's 747 fleet works well in Asia for obvious reasons, Delta's 767-30ER(about 60) work well flying to Europe and don't forget Argentina, Chile & Brazil. Both have 757 with P&W engines. The mismatch is in the short haul, DC-9 & A320 are the NW's core vs. Delta's MD-88 and 737's. Given the price of Fuel and their age NW's DC-9 are gone. Given the number of A320, MD-88 and 737 this combined monster would have, most of these airplanes would serve the rest of their lives with Delta NW. NW A330 provide an interesting bridge: Though purchased primarily for DTW to Europe, NW uses them from the west coast to Japan as well. A330 could be sold but what replaces them? Delta's 777 are great but with only 7 the fleet is too small. NW's 787 order with more 777 should be the core of the Asian, Pacific & Deep Latin American fleet.
 

TheDog2004

Senior
Mar 26, 2004
267
0
There are issues with a Delta-Northwest merger other than fleet commonality (nevermind Delta pilots LOATHE Airbus). The corporate cultures are completely different. A merger would be difficult in so many ways that I'm wondering if people look at anything other than route networks when considereing it.

While not as good as they used to be, Delta's management employee relations are far better than the poisonous environment that now exists at Northwest. Northwest's cynical dealings with AMFA - where they clearly were out to flush the union IMHO - really should worry anyone.

It's oil and water. Yeah, the route network is pretty, but the rest of the beast would be very ugly.
 

FrugalFlyerv2.0

Veteran
Oct 29, 2003
2,930
3,414
TheDog2004 said:
There are issues with a Delta-Northwest merger other than fleet commonality (nevermind Delta pilots LOATHE Airbus). The corporate cultures are completely different. A merger would be difficult in so many ways that I'm wondering if people look at anything other than route networks when considereing it.

It's oil and water. Yeah, the route network is pretty, but the rest of the beast would be very ugly.
[post="302092"][/post]​

Could not a situation similar to AF-KL not work with DL-NW?
So far the KL-AF arrangement seems to be working well - or is it not?
 

WorldTraveler

Corn Field
Dec 5, 2003
21,710
10,721
AF bought KLM w/ a 5-8 year phase out of KLM's routes and identity (not sure of the exact time). DL and NW would not engage in such phase out commitments because there are no nationalistic issues involved and it probably doesn't make economic sense anyway. Make no mistake, though, KL is owned by AF and will not be a separate carrier in very many years.
 

Latest posts