CIDflyer From United States of America, joined Apr 2005, 2472 posts, RR: 3 Posted (7 years 9 months 1 week 5 days 5 hours ago) and read 4795 times:
There was a brief in the Detroit Free Press today about the potential merger scenarios for Northwest, one being the obvious DL/NW hookup we have heard for so long, but the other one was about CO potentialy buying NW, which is the first time I have actually seen something about the two mentioned as possible merger partners in the press.
Would a CO/NW merger be beneficial? The routes are complimentary, CO strong in the east, south, Europe and Latin America with NW strong in the midwest and Asia. Which name stays? MEM would probably be absorbed into IAH and CLE would probably go in favor of DTW. Let the speculating begin....
STT757 From United States of America, joined Mar 2000, 17243 posts, RR: 50
Reply 4, posted (7 years 9 months 1 week 5 days 5 hours ago) and read 4750 times:
Quoting Jetdeltamsy (Reply 2): I don't know how it would play out regarding which would be the controlling entity, as NW owns a chunk of CO.
NWA does not own any piece of CO, they did at onepoint about 8-9 years ago but CO but all of NWA's shares back. NWA does own one single voting share known as the "Golden Share" which they can use to block takeover of CO.
ATCT From United States of America, joined Mar 2001, 2475 posts, RR: 35
Reply 7, posted (7 years 9 months 1 week 5 days 5 hours ago) and read 4703 times:
The companies have complete different corporate structures, fleet systems, labor relations, and heck even quality of service. (I know that can be debated...but Northwest isnt exactly screaming quality in the things they do)
"The way to get started is to quit talking and begin doing." - Walt Disney
DL767captain From United States of America, joined Mar 2007, 2539 posts, RR: 0
Reply 9, posted (7 years 9 months 1 week 5 days 5 hours ago) and read 4686 times:
It could work. The golden share thing could play a big role and make it easier. Their fleets are a problem though, i'm sure if continental was the buyer the boeing fleet would be the leader while the airbus fleet would be slowly fazed out. CO would probably get rid of the DC-9s (i know everyone will kill me for this) not all at once but gradually since CO seems to like newer more efficient planes. NW A320s (the newer ones) could replace the oldest 737s and maybe retire the oldest ones by selling them and make some money. 757s both variants would compliment CO's along with the 787, but they have chosen different engine manufacturers although delivery isnt for a while maybe they can change manufacturers. A330s would compliment Europe routes and the 777s could move to other asia routes that need more capacity. 747-400 would stay for asia routes, might even move to the 747-8 for added capacity and commonality with the 787. I do not know however the engine manufacturers favored by both airlines so that could be a problem.
NW gets europe flights and CO gets the asia flights. i think their hubs work together with few overlaps. CO would also get the KLM friendship. But the fleet difference could hurt things.
If this happened then DL and UA would definitely have to merge, their fleets make things better and UA would get a south east hub (ATL) like they wanted and DL would get asia routes. Fleet commonality is much better with only A320s to deal with.
It would be very interesting to see an A330 in CO colors though
JetBlueGuy2006 From United States of America, joined Jan 2006, 1697 posts, RR: 1
Reply 12, posted (7 years 9 months 1 week 5 days 4 hours ago) and read 4571 times:
Here is a little bit of info on the Golden Share:
Quote: Northwest's golden share is a special voting series of Continental preferred stock it owns in connection with its marketing alliance with Continental, which runs through 2025. Northwest could use those shares to block a merger of Continental with another major airline -- if the combination required a vote by Continental shareholders. Even with the golden share in place, however, Continental could buy another airline without interference from Northwest if that transaction didn't require Continental shareholders' approval.
Avek00 From United States of America, joined Oct 2004, 4474 posts, RR: 20
Reply 13, posted (7 years 9 months 1 week 5 days 3 hours ago) and read 4490 times:
Virtually all the synergies of a merger have already been realized through the existing alliance with none of the downside associated with a merger. So what's the point of a merger except as a last-ditch competitive response?
Jetdeltamsy From United States of America, joined Nov 2000, 2987 posts, RR: 7
Reply 16, posted (7 years 9 months 1 week 5 days 2 hours ago) and read 4303 times:
Quoting Avek00 (Reply 13): Virtually all the synergies of a merger have already been realized through the existing alliance with none of the downside associated with a merger.
Oh; No way.
Two separate corporate structures including two sets of executive officers, two sets of reservations systems, two sets of accounting departments, two sets of sales departments...two of virtually everything.
Synergies of a marketing alliance are NOTHING like a full-on merger (in the case of NW and CO).
Tired of airline bankruptcies....EA/PA/TW and finally DL.
JEdward From United States of America, joined Nov 2005, 134 posts, RR: 0
Reply 17, posted (7 years 9 months 1 week 5 days 1 hour ago) and read 4266 times:
Quoting Jetdeltamsy (Reply 16): Two separate corporate structures including two sets of executive officers, two sets of reservations systems, two sets of accounting departments, two sets of sales departments...two of virtually everything.
Synergies of a marketing alliance are NOTHING like a full-on merger (in the case of NW and CO).
Within this is the assumption overlapping departments can be integrated into each other in a productive (ha!), calm (haha!) way that won't eat up a good portion of the so called 'synergies' (hahahahaha!) and result in a net negative.
...to say nothing of what integrating the other workforce (pilots, FA's, etc.) would due to the bottom line.
You also seem to dismiss the fact that codeshring at its peak form implies price collusion as anti-trust immunity is granted to the various parties to essentially collude.
I'm with Avek00 on this one; unless absolutely critical I doubt the proclaimed savings from a merger do not justify the pain such an action would cause...especially when the majority benefits of a merger can be realized through codesharing.
As Christ died to make men holy, let men die to make us rich. --S.C.
Coewraatysaz From United States of America, joined Jun 2006, 196 posts, RR: 0
Reply 19, posted (7 years 9 months 1 week 4 days 23 hours ago) and read 4151 times:
Quoting Toxtethogrady (Reply 5): If they had similar fleets and compatible employee groups, maybe, but these are two ethnically different carriers united by a common alliance grouping. It would be a tough fit.
Which is essentially the same situation in a CO/UA merger? Except so many ppl seem to think we are the best possible combo.
Continental Airlines: Trabajar con empeÃ??Ã¯Â¿Â½Ã??Ã?Â±o, Volar con PasiÃ??Ã¯Â¿Â½Ã??Ã?Â³n
Jetjack74 From United States of America, joined Jul 2003, 7458 posts, RR: 49
Reply 20, posted (7 years 9 months 1 week 4 days 13 hours ago) and read 3977 times:
Quoting AA737-823 (Reply 15): Northwest, by far, prefers Pratts:
747- PW4000 and JT9
Our 787 aircraft will be RR-powered. In the future of outsourcing, fleet commonality is of little relevance. In about 5-10 years, it won't matter what the commonality would be in fleets except for purposes of cabin crewtraining which can be done in a year.
I would agree that CO has better customer service and is running a good airline, but in what regard is it stronger. Its route system, and financial structure are less or at best equal to Northwest. Not sure that he financial community who would have to support such a merger would agree with you.
I think CO is still the stronger financially based on balance sheets and structurally based on their growth rate; but, if NW can maintain their terrific 3rd quarter earnings, they'll be able to reduce their debt burden quickly. Then it will be a contest.
A real weakness of NW is their route structure; it lacks strength on either coast - where the higher margin business is. They really need to bulk up on one or both coasts. I'd say NW needs to acquire somebody - and Midwest certainly isn't the one. They need US, JetBlue or Alaska. CO would be too expensive, too big a bite, and too big a risk of customer attrition (not that US would be easy).
The best time to plant a tree is today. The second best time is tomorrow.
DeltaL1011man From United States of America, joined Sep 2005, 10252 posts, RR: 16
Reply 23, posted (7 years 9 months 1 week 4 days 11 hours ago) and read 3802 times:
Quoting DL767captain (Reply 9): If this happened then DL and UA would definitely have to merge, their fleets make things better and UA would get a south east hub (ATL) like they wanted and DL would get asia routes. Fleet commonality is much better with only A320s to deal with.
1) if it happens u need to change your name (UA767cap.)
2) the state of GA would keep it in the courts tell the new press in 09
3) why do they have to merge with UA? they could just buy AS and get the SEA and LAX hubs then go to Asia by them self's
4) fleet commonality means pretty much nothing in these types of mergers
i still think it will be DL/NW(SkyTeam) and UA/CO(Star) then AA will just pick up some stored A/C from the to airlines and grow off of that and some old TW routes they have.