Delta and Northwest Close the Deal
After months and months of speculation, talk and hesitation, Delta and Northwest have done the deed: they're merging. In the process they're creating the world's largest airline. The news came this evening at 7:00 central time. The big question now: what does it mean for us? Consider our situation: Delta provides our service to Atlanta and Cincinnati. Northwest provides our service to Minneapolis, Memphis and Detroit. That's five of our 12 destinations. We will be affected. The question is how— good or bad?
Early details indicate the Northwest name is history. A Delta press release says:
"The new airline, which will be called Delta, will provide employees with greater job security, an equity stake in the combined airline, and a more stable platform for future growth in the face of significant economic pressures from rising fuel costs and intense competition. Small communities throughout the United States will enjoy enhanced access to more destinations worldwide."
"Small communities" would be us. This quote implies that the combined network of the two airlines (meaning all the different places that they currently fly), will benefit us. The Delta PR department is working overtime. Check out this web page–it says, "Missouri will benefit from single carrier access to over 390 worldwide destinations." That's good to hear, but I'm from Missouri: Show-Me.
The timing of this merger is likely based on a couple of things: 1) the price of oil recently breaking the $100 a barrel barrier, and 2) they want to get the deal done before the November general election–if the Democrats capture the White House, a merger is less likely to be approved (or so the thinking goes). But even with a Republican administration currently in control, there is obvious concern that the Department of Justice won't approve the deal. Check out this web page; among other things it says, "Contact your elected officials. Let them know that you are in favor of this airline merger and that we need their support."
So what does this news mean for us right now? Not much. Assuming this deal is approved by the feds, it will take months to find out how we're affected.
Read this story from Reuters for early deal details. Meanwhile, rumor has it that a United/Continental merger is close to announcement...
Kent
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