Delta Acquires Northwest ... Now What? | Peter Greenberg Worldwide

Delta Acquires Northwest … Now What?

Delta Northwest Merger After months of speculation, Delta Air Lines announced Monday that it acquire Northwest Airlines for about $3.1 billion, a move that will create the world’s largest airline and may lead to a series of other deals. The new carrier will operate as Delta and be based in Atlanta, with Delta CEO Richard Anderson serving as CEO.

The new carrier will have more than 800 jets. Delta said the carrier will maintain the nine hubs of both airlines, including Atlanta, Detroit, Minneapolis/St. Paul, New York, Amsterdam and Tokyo, with 6,400 daily flights serving more than 390 destinations in 67 countries.

“Delta and Northwest are a perfect fit,” Anderson said Monday. Delta is currently the leading U.S. airline in the trans-Atlantic market with a strong domestic presence in the Northeast, South and West. Northwest is a strong player in the upper Midwest.

The merger needs the approval of the Department of Justice, which will examine routes flown by bother Delta and Northwest to determine whether it violates antitrust laws. This process could take several months. Executives at Delta and Northwest said they are aiming to close their deal by the end of this year, before the “merger-friendly” Bush administration leaves the office.

Pilot Radio Talking The merger has been opposed by members of Congress, and two of Northwest’s largest employee unions—including its pilots. Delta made a deal with its pilots over the weekend, but Northwest pilots have yet to work out a deal.

“No pilot group is going to put up with this. No amount of money can sustain a carrier which creates this level of discord,” Northwest pilot chairman Dave Stevens wrote in a memo late Monday.

As for the effect on passengers, it’s hard to say. Fewer airlines mean less competition, which may translate into higher fares where the two carriers have competing routes. In general, though, there is relatively little overlap between Delta and Northwest’s current routes.

However, the announcement may spur other airlines to consolidate, particularly Continental and United. Some experts say that if other major carriers negotiate their own deals, we could end up with three mega-carriers controlling about 80 percent of the nation’s air traffic.

Related links: Associated Press, USA Today, CNN

Previous Coverage:

Impending Drama: Merger Mania

Frequent-Flier Follies: Why Airlines Don’t Make Good Banks

Airline Mergers and Crash-Landing Investigations

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JO

I'm just waiting for more half truths from "Half-truth Peter" on the DL/NW deal. He'll tell us all the bad things that are going to happen but forget that the alternative may be more bankruptcies and Amtrack. Why don't you ask to testify at the hearings. You seem to know all the answers. By the way Peter, I only listened to your show for about 10 min. Sat and found at least a couple more half truths and outright mistakes. Please go find someone that really knows what an AD is and how it is issued and followed and stop telling us that the FAA issues aircraft service bulletins. Good grief, you are supposed to be a journalist. At least get your facts straight. Also, you imply that the airlines don't calibrate their scales (overweight bag comment) and thereby rip off the customer. It's the law - they have to calibrate them - and it's done by a certified third party. If I were a democrat I would see a lot of similarities between you and Rush L. At least Rush is entertaining. I'm going to once again write to my local station manager and ask that he not renew your contract. The local polka party would be a better choice.