Am I the only one who sees parallels here? Is there some regulation against airlines raising their fares? If they can’t raise rates, because of too much competition, doen’t that mean there are too many airlines?
Umm, I haven’t studied the subject and don’t know their financial sheets, but I tend to doubt that a Delta-Northwest merger would collapse, leaving people without air travel.
Reasons: (1) Airplanes don’t have infrastructure to loot or deteriorate. Explanation: The air is free, the passenger terminals are paid for by taxpayers, the control system by the FAA, and (indirectly) most commercial pilots serve their apprenticeship in the military. Therefore there is much less incentive to loot the core business under guise of a conglomerate.
(2) Assuming (1) above is true, the business of carrying freight and passengers in commercial flights is how the airlines are supposed to make money. Explanation: the “legacy” carriers like American, United, Northwest and Delta have not done well at profitability for many years now. Scuttling duplicate routes is one way to cosolidate and rationalize the passenger load. It might also have the benefit of driving down the bidding price for the most coveted “slots” (terminal space) at the airport.
(3) There is a little more government involvement among the legacy carriers than there was over Penn Central and Enron. Explanation: In 1967-8 the powers that were, weren’t interested in l-d railroading, just what today we’d call the NEC. Financially, the legacy carriers have failed already: look how long United was in receivership. But clearly there’s a federal priority that the nation’s system continue to serve most people – and turn a profit.
That doe
I avoid both carriers like the plague. If it weren’t for occasional family business in Minneapolis I’d never get on Northworst. [tdn]
Oh, I DESPISE Northwest. Rude, delayed, regimented, rude again. I’ve never had a happy flight with them.
The same thought occured to me – two weak carriers using a merger to cover up/postpone facing their problems.
I don’t understand where or how any significant savings will result from this combinaton. They have seperate hub cities, and I don’t know of a lot of routes on which these two are in direct competition. Their international destinations are different. You can eliminate a lot of one set of headquarters staff, and I’m sure there are provisions for top management bailouts; but I doubt that is going to make a significant difference.
I also think it is a very negative sign that carriers signed off on the basic terms of the deal some weeks ago, but they held off announcing it until the pilots union agreed on a plan for the integration of their senority lists. The pilots couldn’t do that, which seems very much like the problems encountered in the PC deal – us vs. them.
Since the very late 1930s, and especially in the period 1960 to about 1990, commercial air took long-distace rail travel’s constituency away, almost down to zero. That is no longer the case. Passenger rail traffic in this country is taking off, and the airline’s hordes are dropping. That doesn’t mean that we’re going to see parity anytime soon. Long-distance rail traffic is --what?–about one or two percent of commercial air passenger miles? Most airline mergers in this country have worked well. Having a hub means having a hub – a carrier can pull out of one to eliminate it or go in with its former rival’s hub – we’re not talking roundhouses here, just operations.
There are going to be fewer flights in the future and they will cost more if for no other reason the cost of jet fuel is going up just as the cost of gasoline is, if not more so. As the competition for the closest in parking “slots” for the plays grows less intense, the price will probably drop. Since there will be fewer flights, hopefully this will give the air-traffic network a chance to considate and overhaul. Passengers will still feel harried and hassled at air terminals, but there’s probably going to be less lateness, and it will probably be easier to change planes.
Who do I really feel sorry for? Boeing. It may be hard for them to sell Dreamlines in this country if the airlines are already trying to get rid of 757, 767, MD-80 and the occasional Airbus.
Typically, airlines at hubs lease those concourses and jetways and pay a premium to “keep someone else from using them” at airports. Yes, it’s not brick and mortar like a roundhouse, but theycan’t just walk away from them without penalty,either. They do have the advantage of not paying property taxes. At other airports, they pay to land, pay to use jetways, pay for the ticket counter space, they even have to pay to use the baggage claim belts. Some airports charge extra during “peak hours”. Airlines don’t get a free pass on facilities. Have you priced airliners lately? You could buy a fleet from EMD or GE for the cost of one 757 (medium sized plane that carries about 180 pax).
Note that both carriers are SkyTeam members, so they already share and coordinate schedules and tickets to over 390 destinations. They are saying that there will be no large-scale layoffs and they will keep all their hubs open. Maybe they will, for a while. But, I’ll bet you will see in cities where they both fly, some reductions in staff and flights, to boost load factors (how full each flight is) and save fuel by not flying nearly empty planes.
About the best way to generate savings will be eliminating overhead: beancounters, lawyers, VPs and executives. Maintence facilities are already stretched thin, so it would be suicide to keep cutting unless they have overseas contracts already in-place. The big question is will they eliminate NWAs “mainbase” at MSP or Delta’s HQ in ATL? Best bet: they consolidate some in one the rest in the other. They have already announced that the Delta name will survive. Maybe they will keep the WorldPerks frequent flyer program in favor of Delta’s. NWA planes have gone through 5 paint schemes in the last 14 years.
NWA has said for years it wanted to shed the name Northwest as it is too limiting when they in fact cir
Wasn’t Northwest once known as Nortwest Orient Airlines?
How do you take 2 bankrupt airlines, in a market situation where no one seems able to raise rates or cut costs, and merge them into profitablility? ( ConAir? [xx(] )
Was Not Northwest Airlines a railroad at one point…
…I believe Northern Pacific railroad helped start and run the airline and used the ying-yang as there logo…Like CP air and Air Canada (CN money) and BAF (Burlington Air Freight)
edit: To answer Murphy Siding’s quetstions.
A long time ago. They dropped the “Orient” during the Republic Airlines merger.
I’m guessing, by lowering overhead costs per ASM (available seat mile) by having fewer executives’ salaries to pay, paying less gate rent by coordinating schedules so they only need 4 jetways in a city instead of 6 or 7, retiring older, less-fuel efficient aircraft, etc.
In the United States, North Central Airlines (now part of Northwest) was established by the original Wisconsin Central RR and Northeast Airlines (now part of Delta) was established by B&M. Burlington Air Freight was strictly a forwarder, not an operator. In Canada, Trans-Canada Air Lines (later Air Canada) was a Crown Corporation and, as such, was treated as a subsidiary of CNR. Canadian Pacific Air Lines was a separate operation under the Canadian Pacific umbrella.
I’m not so sure BN Air Fright was strictly a forwarder. I seem to remember loading a lot of aircraft painted Burlington Northern and BAX in a former life. Even if they were wet-leased planes, I think they crossed over that line.
Yes, BN Air Freight, BAX Global, had wet leased airplanes. Its kind of funny that they are again owned by a railroad, Deutsche Bahn.
Big article in todays Minneapolis Star Tribune on the front page about the merger. Personally I don’t think it’s going to help anything and it’ll be a big disaster.
I’m with you - I’ll never fly again if I have my way (and I’ve not flown since 2000). I loath Northwest and that [censored] MN Rep. Jim Oberstar for that state-funded rip-off that gave Northwest something like $800 million in state funding and tax breaks to build an aircraft repair facility up near Duluth that never happened.
I vacation in the Midwest by chasing trains and watching minor league baseball. If Amtrak can’t get me there - it’s Hertz.
All you boys and Girls, can say what you wish pro or con, but several million in the Atlanta area say the merger with Dl/NW, is a mighty fine thing to have happened.[#welcome]
Despise away. I can come with stories of stupidity on both sides of the ticket counter.
signed former NWA employee.
The sad thing is, Delta used to be one of the two or three best, if not THE best, airline in the country. Nowadays they live up to their nickname, Doesn’t Ever Leave the Airport. That plus Northworst doesn’t bode well.
I fly Delta routinely on business between San Antonio, TX and Norfolk, VA via Atlanta. Always a plesant trip…Always on time…Always with a pleasant crew.
Are you SURE you were on Delta???
The manner and quality of domestic flight is so low that I almost nevre hear anything complimentary about the domestic carriers, and only rarely the “surprises” like leather seats on the non-legacies. I have heard that Continental gets better ratings than AA or UA for food and service. Anyone out there love/hate Continental Air Lines?