Almost Done: Delta, NW to merge, Delta keeps name, HQ in ATL

[Alex T]

ATLANTA -- Delta and Northwest have reached agreement on the major points of their long-anticipated merger Thursday, according to an industry web site.

Aero-News.net reported that "unnamed sources say executives with Delta Air Lines and Northwest Airlines have reached agreement on major terms" of the deal that would create the nation's largest airline.

Officials at both airlines have not commented on the report.

The web site reported the joined airline will keep the Delta name and the headquarters will stay in Atlanta.

http://www.wsbtv.com/news/15253226/deta ... 0302142008 (http://www.wsbtv.com/news/15253226/detail.html?treets=atl&tml=atl_break&ts=T&tmi=atl_break_1_03190302142008)


Alex

[Alex T]

Update-- Article has been pulled but Houston is now Reporting it.

http://www.chron.com/disp/story.mpl/bus ... 39881.html (http://www.chron.com/disp/story.mpl/business/5539881.html)

[nwafan20]

That doesn't make it "Official" because no official announcement has been made, this is more leaks (again)

[JetBlueAirwaysFan]

True...
nwafan...I have to laugh. You are really hoping for this not to happen they way it looks like it will. :lol:

[Alex T]

That doesn't make it "Official" because no official announcement has been made, this is more leaks (again)


The article I had posted before it was pulled was deemed OFFICIAL Hence why I had it in the title.

Alex

[nwafan20]

True...
nwafan...I have to laugh. You are really hoping for this not to happen they way it looks like it will. :lol:

Oh, I know it will, just trying to keep the facts as facts.

[Iberia A340-600]

I have not paid too much attention to this matter nor formulated any particular opinion on it. However I can see were Matt is coming from because it is his favorite airline and it looks like the name and such will fade away but I am sure never forgotten. I mean look at TWA, there are some very serious die hard TWA fans still out there.

I feel that this merge, if it does indeed happen, ill largely benefit the flyers of the world and will bring around greater opportunities for Delta.

[Matt Molnar]

I feel that this merge, if it does indeed happen, ill largely benefit the flyers of the world and will bring around greater opportunities for Delta.
Unfortunately, history disagrees with this view. :)

[nwafan20]

This merger, if it passes approval, will create the worlds largest airline, creating a monopoly in many markets, meaning much higher prices for consumers and limited choices. = not good for consumers.

My last hope is that the DOT rejects the proposal :D

[Art at ISP]

It's going to pass, as are the other planned mergers.

Regarding pricing, we all need to buckle up and realize that airfares are WAY below where they were 20 years ago when adjusted for inflation. The current levels are not sustainable period, so with or without mergers, fares SHOULD go up.

This business is the only one I know of that does not base pricing on cost of goods or service plus markup.
We need to realize that $99 transcons should not exist.

[PhilDernerJr]

Though a separate issue, I agree about the transcons, but it also shouldn't cost anyone $1,200 to go to Albany.

There is a healthy middle ground and a saturation level that the indsutry needs to be at. A merger or death or two may still bring us to healthier levels. But then again, they always find a way to give the passengers the screwball.

[nwafan20]

If airlines can make money off of low fares, which has been proven, I.e. WN, plus the majors all posting profits for 2007 (Really good profits for some, like NW), why shouldn't fares stay that low? Why raise the cost for the simple sake of "Well, 20 years ago, adjusted to inflation, it was this"?

The market is being sustained at the current levels.

[hiss srq]

Southwest is feeling the sting now too Matt. No one is going to make a profit on first quarter based on current fuel and market fluxuations. The industry is not worth the blue juice you empty from the lav tanks right now.

[bonanzabucks]

A lot of people forget that most of the legacy carriers went into Chapter 11 within the last five years and during reorganization, their biggest creditors were investment bankers. These call the shots now, whether or not they actually know something about the industry (and in actuality, they don't). In Wall Street, mergers are pretty much all these guys know and the biggest thing they push. Part of the reason is because investment banks make most of their money negotiating and facilitating these things, but also because it's too conservative an industry to shake off the old methodology, even if it's wrong. Every time the word "merger" is mentioned between two companies, even if it's a rumor, their stocks shoot up. If the rumor is negated, stocks go down again. I should know...my last job was to analyze stocks. So, basically, these bankers are ordering these mergers not because they're concerned of the health of the industry (they bolt out as soon as they get the chance), but because this is just the way they do business. Most of these mergers these iBankers push are usually disastrous -- Bank of America's merger with Fleet and HP's with Compaq come to mind.

As far as airline profitability, you have to give credit to them for really slimming down their expenses and responding to the low-cost threat. Oil prices, however, are not something they can control. I was reading somewhere that oil prices account for over 50% of airlines' expenses now. This has risen from what was a third like three years ago. How much more can they streamline operations? How much more can they raise fares and merge without affecting passenger numbers? And how would these mergers affect the economy? This economy is based on transportation and we've been lucky that it's been cheap for the last twenty years. Transportation costs are rising and that will surely affect other aspects of the economy, not just the airline industry.

[hiss srq]

Approx. 700 dollars of every thousand dollars is spent on fuel in the estimates of USAirways,

[Art at ISP]

Phil,

What you said is what I have been saying all along. It's the fares, stupid.

We have advocated FAIR fares--like you said something in the middle. No more $99 transcons, but no more $1200 for BUF-ALB. There is a happy medium.

That said, it has not been proven that low fares are profitable-they are necessary marketing tools. Southwest is actually NOT the cheapest in many markets, but they market themselves to give that perceptiion--so they get business that way. Where they DO excel however is with unrestricted fares-their Y fares and high end fares are much lower than other traditional airlines, so it validates my point that if unrestricted fares were more REASONABLE (NOT CHEAP), more people would migrate a little higher (especially business travelers).

I know it's off topic, but again, consolidation and one or two failures would actually make the airline business more stable. The fact is one way or another, we are going to have to get used to paying more.

[Matt Molnar]

Deal could be announced this afternoon, both DL and NW's boards have scheduled emergency meetings for today where the deal could be approved.

[T-Bird76]

Well the only people that should be happy about this are the shareholders. The fact is this is a lose lose for everyone else. How many airlines are going to replace MEM as a hub or CVG or SLC?

[MarkLawrence]

As far as I remember, NWA doesn't have a West Coast hub and wouldn't that help NWA customers still having SLC as a hub?

[JetBlueAirwaysFan]

I have DL stock, how will this affect my shares?

[Matt Molnar]

Since DL is buying NW it shouldn't affect your shares at all.

[adam613]

I have DL stock, how will this affect my shares?

Your shares will probably go up right after the merger...sell before the combined airline tanks!

[JetBlueAirwaysFan]

I just found out what I had feared all along. My DL Shares went belly up after DL came out of Chapter 11.

[nwafan20]

I just found out what I had feared all along. My DL Shares went belly up after DL came out of Chapter 11.

Yeah.... Stocks before Ch. 11 are worth nothing.

[hiss srq]

The joke all day with pilots on frequency today has been "blah blah blah blah follow the Delta A319"

[JFKSTHEWAY]

This merger hasnt been in the books very long, and its starting to turn for the worst. All the hype surroundign the proposed merger now centers on what happens with the pilots. They are having issues with seniorority and and their respective unions which are in conflict. If this goes under, where will the companies go? UA? CO? AA?