Pilots agree Delta/North West merger
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Just had an e-mail from NWA World Perks - of all places(!) announcing that it's a done-deal. Will be called Delta Airlines.
Hmmmmm... any one remember that so-called 'merger' between Daimler and Chrysler.
= hundreds of millions in fees and bonuses, followed by near-bankruptcy within 2-3 years and ultimately a v.v. messy divorce....... those investment bankers just don't give up.
Hmmmmm... any one remember that so-called 'merger' between Daimler and Chrysler.
= hundreds of millions in fees and bonuses, followed by near-bankruptcy within 2-3 years and ultimately a v.v. messy divorce....... those investment bankers just don't give up.
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Details on http://money.cnn.com/2008/04/14/news/companies/delta_northwest/index.htm
The deal is for the merger of DL and NW with a stock swap between the two companies. It is subject to regulatory approval and that will be no mean feat to get the regulatory approval given the ownership of part of CO by NW and part of NW by KL.
There is also an undertaking to complete the negotiations and the impasse on the pilot seniority negotiations before the proposed merger is completed with a timeline of six months. Until then it is business as usual according to press reports.
If the merger goes through, it will be interesting to see how the fleet is reconfigured. As it stands, allowing for the disposal of the NW DC-9s, it will be a mixed Airbus / Boeing short haul and long haul and a regional fleet of Bombardier , Embrauer, ATR and SAAB.
Interesting times ahead and stories already of a possible UAL and CO merger in the press which will be in most respects bigger than the DL and NW merger, both dwarfing AA if it remains as it is.
There is also an undertaking to complete the negotiations and the impasse on the pilot seniority negotiations before the proposed merger is completed with a timeline of six months. Until then it is business as usual according to press reports.
If the merger goes through, it will be interesting to see how the fleet is reconfigured. As it stands, allowing for the disposal of the NW DC-9s, it will be a mixed Airbus / Boeing short haul and long haul and a regional fleet of Bombardier , Embrauer, ATR and SAAB.
Interesting times ahead and stories already of a possible UAL and CO merger in the press which will be in most respects bigger than the DL and NW merger, both dwarfing AA if it remains as it is.
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VAFFPAX Said
"Delta and NW both code share with Skyteam members (KLM and AF)... could be some consolidation of those routes since Open Skies came into place?" (sorry, new to forums & don't know how 2 Quote!"
Probably the most sensible comment so far.
AF is flying LHR to LAX under Openskies and British Airways is launching "Openskies".
But please see here also
http://www.baplane-bapilot.org/home.aspx
Let's remind ourselves of the Big Picture!!
"Delta and NW both code share with Skyteam members (KLM and AF)... could be some consolidation of those routes since Open Skies came into place?" (sorry, new to forums & don't know how 2 Quote!"
Probably the most sensible comment so far.
AF is flying LHR to LAX under Openskies and British Airways is launching "Openskies".
But please see here also
http://www.baplane-bapilot.org/home.aspx
Let's remind ourselves of the Big Picture!!
Show me the money
I really don't see how this will save any money.
The problem is fuel is up, fares are not. How will this increase fares?
They cut flights or even hubs and start ups will jump at the gates.
It will take a long time to get any economies of scale. Reminds me of Air Canada taking over Canadian. What a mixed bag fleet, dueling pilots, incompatible procedures etc Air Canada went bankrupt.
Seems like a deal only Wall Street would love.
20driver
The problem is fuel is up, fares are not. How will this increase fares?
They cut flights or even hubs and start ups will jump at the gates.
It will take a long time to get any economies of scale. Reminds me of Air Canada taking over Canadian. What a mixed bag fleet, dueling pilots, incompatible procedures etc Air Canada went bankrupt.
Seems like a deal only Wall Street would love.
20driver
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This is the letter being sent to Worldperks members, it went out a little early.
Dear [dixieflyer],
As a valued Northwest Airlines customer and WorldPerks® member, I wanted you to be among the first to hear that we have announced a merger with Delta Air Lines. Subject to regulatory review, our two airlines are joining forces to create America’s premier global airline which, upon closing of the merger, will be called Delta Air Lines.
By combining Northwest and Delta, we are building a stronger, more resilient airline that will be a leader in providing customer service and value. Our combined airline will offer unprecedented access to the world, enabling you to fly to more destinations, have more flight choices and more ways than ever to earn and redeem your WorldPerks miles.
You can be assured that your WorldPerks miles and Elite program status will be unaffected by this merger. In addition, you can continue to earn miles through use of partners like WorldPerks Visa®. And once the new Delta Air Lines emerges you can look forward to being a part of the world’s largest frequent flyer program with expanded benefits.
The combined Delta Air Lines will serve more U.S. communities and connect to more worldwide destinations than any global airline. Our hubs – both Delta’s and Northwest’s – will be retained and enhanced. We will be the only U.S. airline to offer direct service from the United States to all of the world’s major business centers in Asia, Latin America, Europe, Africa and around North America.
Both airlines bring tremendous strengths to this new partnership. Our complementary service networks form an end-to-end system that is truly greater than the sum of its parts. This is a merger by addition, not subtraction, which means all of our hubs – both Northwest’s and Delta’s – will be retained. In addition, building on both airlines’ proud, decades-long history of serving small communities, we plan to enhance global connections to small towns and cities across the U.S.
While we work to secure approval of our merger, which may take up to 6 to 8 months, it will be business-as-usual at both airlines. We will continue to operate as independent airlines and the people of Northwest will remain focused on providing you with the very best in safe, reliable and convenient air travel. At the same time, both airlines will be planning for a seamless integration of our two airlines, one that delivers to you the enhanced benefits that will earn – and retain – your preference.
As we work through this process, we will keep you informed at every step along the way. Thank you for your business and we look forward to serving you on your next Northwest flight.
Sincerely,
Bob Soukup
Managing Director, WorldPerks
Dear [dixieflyer],
As a valued Northwest Airlines customer and WorldPerks® member, I wanted you to be among the first to hear that we have announced a merger with Delta Air Lines. Subject to regulatory review, our two airlines are joining forces to create America’s premier global airline which, upon closing of the merger, will be called Delta Air Lines.
By combining Northwest and Delta, we are building a stronger, more resilient airline that will be a leader in providing customer service and value. Our combined airline will offer unprecedented access to the world, enabling you to fly to more destinations, have more flight choices and more ways than ever to earn and redeem your WorldPerks miles.
You can be assured that your WorldPerks miles and Elite program status will be unaffected by this merger. In addition, you can continue to earn miles through use of partners like WorldPerks Visa®. And once the new Delta Air Lines emerges you can look forward to being a part of the world’s largest frequent flyer program with expanded benefits.
The combined Delta Air Lines will serve more U.S. communities and connect to more worldwide destinations than any global airline. Our hubs – both Delta’s and Northwest’s – will be retained and enhanced. We will be the only U.S. airline to offer direct service from the United States to all of the world’s major business centers in Asia, Latin America, Europe, Africa and around North America.
Both airlines bring tremendous strengths to this new partnership. Our complementary service networks form an end-to-end system that is truly greater than the sum of its parts. This is a merger by addition, not subtraction, which means all of our hubs – both Northwest’s and Delta’s – will be retained. In addition, building on both airlines’ proud, decades-long history of serving small communities, we plan to enhance global connections to small towns and cities across the U.S.
While we work to secure approval of our merger, which may take up to 6 to 8 months, it will be business-as-usual at both airlines. We will continue to operate as independent airlines and the people of Northwest will remain focused on providing you with the very best in safe, reliable and convenient air travel. At the same time, both airlines will be planning for a seamless integration of our two airlines, one that delivers to you the enhanced benefits that will earn – and retain – your preference.
As we work through this process, we will keep you informed at every step along the way. Thank you for your business and we look forward to serving you on your next Northwest flight.
Sincerely,
Bob Soukup
Managing Director, WorldPerks
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So, any predictions as to who'll be the next couple to walk down the merger aisle?
CO/UA may seem an odd pairing, and I wouldn't be surprised if AA threw a spanner in the works...
CO/UA may seem an odd pairing, and I wouldn't be surprised if AA threw a spanner in the works...
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I really don't see how this will save any money.
2. There are inefficient aircraft being flown.
3. A large percentage of the current passenger strata will simply not fly if they have to pay anywhere near a sustainable fare.
4. The end result of the merger will be a company about the size of Delta now, with a few more asian routes. MSP, MEM and CVG will cease to be hubs. The DC-9's will go away. Most CRJ's will go away. The end result will be a businessman's airline.
You know, my father flew for NWA from 1968-1999, retiring as a 747-200 captain and check airman.
I have an old first-class menu from around 1972. On the back is the old NWA route structure. They served, maybe, 10 cities in the U.S., all of them feeding to these massive trunk lines across the pacific, where the network was much more extensive.
No, you couldn't fly NWA from Pensacola to Dayton back then. But they were so in the black that they wrote checks for 747's, and owned most of the hotels they stayed in around the world.....
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Savings
20Driver,
You may well be right, but the theory is that when you throw 2 operations in the same field together - there are some one time synergies - that can be massive - and there will be some ongoing operational synergies that will show up repeatedly on the bottom line, every year. See Huck's post for some details.
This is especially true on the international networks I expect - thake somewhere that both airlines fly to - they only need one set of staff (all be it perhaps slightly expanded) and can probably reduce gate requirements and due to new mass get better deals from local suppliers.
That is the theory - practice - good mergers are rare (there is always blood and often a lot of bad feelings) and efficient mergers ever rarer. I've been in 12 takeovers or mergers and 2 were very successful the others so-so - but all were painful.
The biggest risk is the good people leave of their own accord and you are left with the worst of both bunches!!!
The solution for anybody involved - keep your head down - work perfectly and very quickly - be helpful, polite and efficient, if not friendly, towards your new colleagues and management - get as many brownie points with the customers as you can - for the new company (and automatically for yourself)
Good luck to all and for those willing to move - think of China, India or the UAE, if your family/partner situation allows - that's where the work is.
You may well be right, but the theory is that when you throw 2 operations in the same field together - there are some one time synergies - that can be massive - and there will be some ongoing operational synergies that will show up repeatedly on the bottom line, every year. See Huck's post for some details.
This is especially true on the international networks I expect - thake somewhere that both airlines fly to - they only need one set of staff (all be it perhaps slightly expanded) and can probably reduce gate requirements and due to new mass get better deals from local suppliers.
That is the theory - practice - good mergers are rare (there is always blood and often a lot of bad feelings) and efficient mergers ever rarer. I've been in 12 takeovers or mergers and 2 were very successful the others so-so - but all were painful.
The biggest risk is the good people leave of their own accord and you are left with the worst of both bunches!!!
The solution for anybody involved - keep your head down - work perfectly and very quickly - be helpful, polite and efficient, if not friendly, towards your new colleagues and management - get as many brownie points with the customers as you can - for the new company (and automatically for yourself)
Good luck to all and for those willing to move - think of China, India or the UAE, if your family/partner situation allows - that's where the work is.
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Huck, how can there be excess capacity when all we read about is rising load factors (85-90% across the board now) and in fact most flights are operating full ?
I think the fundamental problem is still one of costs exceeding revenues.
I think the fundamental problem is still one of costs exceeding revenues.
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As I understand it, there are those who pay their way (first, business class, late walk-up coach class).
Then there are those who don't ($375 round-trip JFK-CDG, but only if you book in advance, non-refundable).
So load factors don't mean squat, and are more of an annoyance.
For instance: this weekend I had to fly over to europe for a maintenance test flight. Hair on fire, be there yesterday, AOG (aircraft on ground) etc. In four hour's notice I got a round-trip business fare for $6000.
The last leg, on the way home, was on a pitifully cramped RJ operated by Pinnacle airlines. Sitting beside me was a woman flying DTW-BHM to visit her daughter. I know from experience that if she shopped early and used the internet she paid ~$280.
Therefore, you could cull her from the list and not make a hiccup on NWA's bottom line, in the grand scheme of things.
As good a definition of the Free Market as you can get.....
Then there are those who don't ($375 round-trip JFK-CDG, but only if you book in advance, non-refundable).
So load factors don't mean squat, and are more of an annoyance.
For instance: this weekend I had to fly over to europe for a maintenance test flight. Hair on fire, be there yesterday, AOG (aircraft on ground) etc. In four hour's notice I got a round-trip business fare for $6000.
The last leg, on the way home, was on a pitifully cramped RJ operated by Pinnacle airlines. Sitting beside me was a woman flying DTW-BHM to visit her daughter. I know from experience that if she shopped early and used the internet she paid ~$280.
Therefore, you could cull her from the list and not make a hiccup on NWA's bottom line, in the grand scheme of things.
The biggest risk is the good people leave of their own accord and you are left with the worst of both bunches!!!
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Originally Posted by gofer
You may well be right, but the theory is that when you throw 2 operations in the same field together - there are some one time synergies - that can be massive - and there will be some ongoing operational synergies that will show up repeatedly on the bottom line, every year.
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The Deltoids got a LOA with 24 months furlough protection, wonder who will hit the streets when the NWA DC-9's are parked after the merger?
NWA MEC says they will torpedo the deal, we'll see...
NWA MEC says they will torpedo the deal, we'll see...
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Whenever I think of NWA I think of Garrison Keillor and that piece reminds me why. 
