After dancing around the situation the past several weeks in hopes that their pilots would actually have an agreement to make a merger run smoothly, Delta and Northwest have decided that the time is now, with or without an agreement with their pilots. They’ve announced a merger that will keep the Delta name and CEO moving forward and expect that the merger will close by the end of 2008.
Not surprisingly, the carriers are going out of their way to tell everyone how good this will be for the customers, very little of which I believe. Among other things, the release states that they are keeping all the current hubs, which just doesn’t make sense. Atlanta, Memphis, Cincinnati and Detroit are all relatively closely packed in the eastern part of the US. And one of the benefits of the merger was supposed to be the ability to reduce capacity to increase fares, and they cannot do that if they continue to run hub operations at all the existing hubs.
Oh, and they still haven’t figured out the pilot seniority integration issues, which could destroy the deal, much like it has the AmericaWest/USAir deal from a few years ago.
This was inevitable based on the relative weakness of the two airlines, but it will likely not be good for anyone in the short term, despite the assurances from Delta right now. Also, look for a United/Continental merger in the very near future as well. Odds of them sitting idle on the sidelines are very, very low at this point.
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