Panamair From United States of America, joined Oct 2001, 4722 posts, RR: 26 Reply 2, posted (7 years 6 months 3 days 18 hours ago) and read 12016 times:
Quoting UAL777UK (Thread starter): Well, its now being discussed within the Skyteam group as oppsed to just on here!!
Of course AF-KL would want such a merger - it would prevent them from having to choose between DL and NW as their key U.S. partner...it's easy for all these people (AF, KL, Minetta) to want such a merger because they don't have to deal with the horrible integration issues (not just of a DL-NW tieup but with any US airline merger in general), especially with disparate employee cultures, fleet issues, etc.
Litz From United States of America, joined Dec 2003, 1749 posts, RR: 0 Reply 3, posted (7 years 6 months 3 days 18 hours ago) and read 12016 times:
If this were to happen, it would happen over a lot of people's kicking, screaming bodies ....
Other than a nice route overlap, there's just not much synergy there.
Different fleet types, way way different labor structures (nonunion labor and union labor mixed together is a bad, bad situation that's just too volatile to think about), different business models, just waaaaaaaay different pretty much alltogether.
Not to mention that DL has made it very clear that they intend to go it alone. and I'd be shocked if NW felt any different.
And yes, this has been discussed to death here ... general summary is : we'd believe it when we'd see it.
Joost From Netherlands, joined Apr 2005, 3138 posts, RR: 4 Reply 4, posted (7 years 6 months 3 days 18 hours ago) and read 11983 times:
It's one of the most obvious mergers in the US for a long time. Both are struggling and already have a very close cooperation, they codeshare on many routes, are both in SkyTeam, have transatlantic partners that already one entity.
Fleet commonality is hardly there, but with the number of aircraft both carriers are flying, this will not be an issue at all. And for replacement orders that will be shortly for both carriers (NW and the DC9s, DL with its 732s) they can have commonality advantages as they will be able to place a larger order.
For hubs, I would think that MEM and CVG will be downgraded to 'focus' cities. If the new DL-NW entity gets full ATI with KL-AF (that will be an important reason to merge), expect the MEM-AMS to be chopped in favour of more AMS-ATL flying and similarily, CDG-CVG will be reduced in order to boost CDG-DTW. It's a lot of rationalizing.
In my opinion, if both carriers can come to a good agreement, a merger can be a very good move; and this is the time: the economy is on it's way up, revenues will likely increase and this is very helpful to cover the enourmous costs of a merger; in order to be a more healthy and stable company once we have the economy slowing down again.
Drerx7 From United States of America, joined Jun 2000, 4962 posts, RR: 8 Reply 5, posted (7 years 6 months 3 days 18 hours ago) and read 11963 times:
First of all--this KLM guy is no authority to run and say that the merger is 'a real possibility'. Such a merger would not make it past the US gov't without some serious shedding of mass on one or both DL/NW sides. He is merely postulating like we do on a.net.
Not really an issue. A rule of thumb says that advantages of fleet commonality work up to 50 planes per type, after the 50th plane, incremental costs per extra plane remain similar. Both carriers have such a strong fleets that it is not really an issue, and as I said in my earlier post, they have enough replacement needs to increase buying power for replacements. (787 to replace DLs 767s in the longer term?) AF and KL also have different fleets especially on short-haul, and this also works out good.
Quoting Litz (Reply 3): way way different labor structures (nonunion labor and union labor mixed together is a bad, bad situation that's just too volatile to think about),
Agreed, this is a real challenge. But didn't US and HP also differ very much on this aspect?
In what sense? Both seem to be typical examples of network carriers, operating high-frequency flights with varying equipment from hubs. Both carriers are strong transatlantic players and offer connections from US to Europe. Both are old legacy carriers, now cutting costs everywhere they can. Again, to take the example of US-HP, their business models seemed to differ way more than NW and DL.
Quoting Litz (Reply 3): Not to mention that DL has made it very clear that they intend to go it alone. and I'd be shocked if NW felt any different.
Nwab787techops From United States of America, joined Feb 2006, 219 posts, RR: 0 Reply 8, posted (7 years 6 months 3 days 18 hours ago) and read 11899 times:
I don't think we are going to see any mergers. DL and NW don't have the money to pay the bill, never mind the 100s of millons it would take for a merger. The only time you would see something like that, is if other airlines where in merger talks say CO and UA. Maybe you would see talks of a NW/DL merger, but even then I think AA would be first in line before DL in a merger to keep up with UA.
ORD From United States of America, joined Jul 1999, 1371 posts, RR: 1 Reply 10, posted (7 years 6 months 3 days 18 hours ago) and read 11833 times:
Quoting Nwab787techops (Reply 8): DL and NW don't have the money to pay the bill, never mind the 100s of millons it would take for a merger.
DL and NW don't need the money for a merger. Investors foot the bill. That's exactly what happened with US Airways and America West.
Quoting Nwab787techops (Reply 8): The only time you would see something like that, is if other airlines where in merger talks say CO and UA. Maybe you would see talks of a NW/DL merger, but even then I think AA would be first in line before DL in a merger to keep up with UA.
CO and UA have already had merger talks. Nobody knows how serious they are, but they have happened. Even industry guru Mike Boyd has said UA is positioning themselves to possibly merge with CO.
As for AA, I don't see them getting approval to merge with DL, NW or CO. When you look at the stats they are already so much larger than #2 UA. If they merged with another big airline I think they would simply be too large for the goverment to accept.
Alitalia744 From United States of America, joined Mar 2000, 4710 posts, RR: 46 Reply 14, posted (7 years 6 months 3 days 18 hours ago) and read 11745 times:
Quoting Isitsafenow (Reply 11): Fleets......The MD-80's are gone in favor of the newer scarebuses.
The DC-9 will be phased out slowly in favor of newer EM-175's or 190's.
Im not sure what will happen to the 737-800. Perhaps nothing.
Something big must go. We have 777.767,A330 and 747-400. All of these are
Thats my uneducated guess.
if it happened (and i pray to god it doesn't) fleet would probably become:
MD88s (or A319s but not A320s, DL loves their 738s)
Joost From Netherlands, joined Apr 2005, 3138 posts, RR: 4 Reply 16, posted (7 years 6 months 3 days 17 hours ago) and read 11714 times:
Quoting Columba (Reply 12): If true would that mean that this new airline would drop the A319/A320 and A330 ?
Highly unlikely. Those planes are new and they have lots of 'm. An airline won't go for fleet commonality just because it looks cool in the in-flight magazine. They fleet of 100+ Airbusses is that large that it already has all advantages of fleet commonality.
When you compare a fleet of 1 aircraft to a fleet of 20 aircraft, keeping 20 doesn't cost 20 times as much as keeping one, it will cost 15 or 16 or 17 times as much. So you have an advantage.
Keeping up a fleet of 200 identical aircraft costs twice as much as keeping 100 aircraft. There is no further advantage.
Example (numbers purely fictious)
Imagine you have 1 one aircraft, you will keep one spare landing gear in your inventory. You hardly ever need it, but in case you need it, you need to have it, as ordering a new one or reparing takes several days and you can't miss your plane for a week or so.
When you fly 20 aircraft, you can still do with one spare landing gear. It's is very unlikely that 2 aircraft have a broken gear exactly in the same week, so if one breaks down, you repair it or order a new one. Here you see a cost advantage.
When you fly 100 aircraft, it happens more often that the landing gears break, so you keep 5 gears in your inventory. There is no cost advantage over flying 100 aircraft and having 5 spare gears, or 20 aircraft or 1 spare gear.
Of course, numbers differ and the spare part / aircraft ratio differs from part to part. But in general, from 50 aircraft there are not so much further advantages in maintenance; there are when buying, though.
So for new airplanes as the 320s flying for NW or the 738s of Delta, replacement for the sake of commonality is a waste of money. When replacing the DC9s, MD80s, 737 first generations, etc by new A320/737NG/A320RS/737RS, commonality is available and you have more buying power when ordering 200 than when ordering 100.
Quoting Drerx7 (Reply 5): First of all--this KLM guy is no authority to run and say that the merger is 'a real possibility'.
By the way, he also was the one that said KLM would 'reconsider' it's cooperation with NW after 2010 and hinted at going with Delta, along with AF. He and Spinetta wil also be the ones that will eventually make that decision. I would think that for NW it is a highly unfavourable situation to lose all the KLM feed...
Mptpa From United States of America, joined Feb 2006, 539 posts, RR: 0 Reply 17, posted (7 years 6 months 3 days 17 hours ago) and read 11650 times:
Besides the uncommanility of the fleet types, it does offer some incentives:
- DC9/B737-200 - Gone. Replace with EMB195
- A320/319, B738 - Replace with just B737/8 or A320/19
- B757, B767, A330 - rationalize with B787
- B744, B777 - Rationalize/modernize with B748i and B773
- B72F - Replace with some rebuilt B744(F) and B77F
ATL, DTW, MSP - Keep
MEM, CVG, SLC - reduce to focus cities
JFK - Reduce to a super focus city, move most to DTW where the facility is MUCH better
NRT - make this more a super hub
NWA would operate and expand the Asia Pacific routes plus fortify the Cargo ops
DAL would be used to operate and expand the Europe, Middle east, Africa routes using CDG and AMS and hubs
Incitatus From Brazil, joined Feb 2005, 3931 posts, RR: 14 Reply 19, posted (7 years 6 months 3 days 17 hours ago) and read 11605 times:
Quoting Joost (Reply 6): Not really an issue. A rule of thumb says that advantages of fleet commonality work up to 50 planes per type, after the 50th plane, incremental costs per extra plane remain similar.
That rule of thumb is not accurate.
Just consider two airlines. One Southwest style with 400 737-700s. The other has 50 737-700s, 50 737-200s, 50 A320s, 50 757s, 50 E-195s, 50 F100s, 50 DC9s and 50 Tu-204s.
Positiverate From United States of America, joined May 2005, 1590 posts, RR: 9 Reply 20, posted (7 years 6 months 3 days 17 hours ago) and read 11555 times:
Quoting UAL777UK (Thread starter): Well, its now being discussed within the Skyteam group as oppsed to just on here!!
Oh boy...another NW/DL merger thread.
His comments hardly qualify as "being discussed within the SkyTeam Group". It's just speculation by one executive within the group. In meetings on Capitol Hill Gerry Grinstein told policymakers and their staff that he would work to avoid a merger because it is so tough on the company integration wise.
DL787932ER From United States of America, joined Dec 2005, 597 posts, RR: 1 Reply 21, posted (7 years 6 months 3 days 17 hours ago) and read 11528 times:
Of course, seeing one of these has a unique appeal:
But I agree it seems unlikely, mainly because of the labor force integration problems. The completely disparate fleets (except for the 752) would work themselves out over time (in ten years, something like E190/737NNG/752/753/788/789/(something bigger?)). But integrating NW's unions with DL's mostly nonunion employees, especially with NW's current labor issues (it's pretty bad when one has to call a "truce" with one's own employer), is a scary prospect.
MEA-707 From Netherlands, joined Nov 1999, 4210 posts, RR: 36 Reply 23, posted (7 years 6 months 3 days 17 hours ago) and read 11489 times:
I believe they secretly work together much more then they would make believe to the anti trust patrol. Apart from the obvious codeshares, they announced Chapter 11 on the same moment last year. My guts feelings say there is a merger being prepared behind the scenes
nobody has ever died from hard work, but why take the risk?
Incitatus From Brazil, joined Feb 2005, 3931 posts, RR: 14 Reply 24, posted (7 years 6 months 3 days 17 hours ago) and read 11465 times:
Quoting Joost (Reply 22): Yes please. Your example is not close to the situation drawn here. Of course, a 737-200 or a DC-9 will have higher operating cost than a 737-700.
Consider two airliens:
one flying 50 737-700s and 50 A319s
one other flying 100 737-700s.
Between them, the costs won't differ by hugh numbers.
You are just looking at the parts inventory management aspect of the problem. And even with the 100/50-50 Boeing/Airbus case inventory management and maintenance won't look pretty. A large share of aircraft parts are what is called slow moving parts - they sit in inventory for a long time and demand is very random. Two fleets = duplicaton. Also... in this case Boeing does not use the metric system and Airbus does - more training for maintenance crews.
Besides parts management and maintenance, the mixed fleet will introduce additional complications in scheduling, crew training, revenue management and pricing, and recovery from weather disruptions. In short, don't do it.
25 1337Delta764: I hope this NEVER happens, no matter what Joost says. The cold hard fact is that mixing the fleets would be a disaster.
26 FlyGuyClt: What makes you think the "Delta" name will survive? What makes you think "Steenland" would still be there? Safe Flying
27 Milesrich: While the 737/800 and A-320/319 are competing types, the airlines own enough of both to keep them rather than dump them. The savings would be in elimi
28 Slider: Exactly right- it's not a terribly responsible thing to say, to incite all sorts of hysteria, tension or investor unease as a third party, albeit one
29 Joost: I don't totally disagree on you My main point is that when mixing a fleet of 100+ 737s and 100+ 320s, replacing one of them with something new way be
30 Jacobin777: I would hope not..those NW A330's are beauties...and like AF/KL, both have a lot of Boeing and Airbus in their fleets, with KL basically having an "a
31 FlyGuyClt: One thing that no one is realizing is. Is the Bankrupcty process being used to make the companies more compatible? To get ride of the "non" compatible
32 Panamair: No way..just because the facility is nicer at one doesn't mean that the airline should give up the world's largest airline passenger traffic market (
33 STT757: Out: Cincinnati, Memphis, Salt Lake City In: Detroit, Atlanta, Minneapolis, JFK, Narita
34 FlyGuyClt: Ah, someone who understands O and D traffic and the cash that goes with it. Safe Flying
35 STT757: The minute a merger involving DL, NWA or AA is announced CO and UAL will announce their merger.