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Btriple7
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Air France/KLM/Delta/Northwest - One Company?

Fri Dec 16, 2005 10:49 am

I just read an article about Air France/KLM aiming to create a single company with Delta Airlines and Northwest Airlines. I was a bit surprised when I saw the article.

Quote:

AFX News Limited
Air France-KLM aims to develop single company with Delta, Northwest - report
12.06.2005, 02:41 AM

PARIS (AFX) - Air France-KLM sees a joint venture with Delta Air Lines as a step toward the long-term goal of a single entity uniting Air France, KLM, Northwest Airlines and Delta, the daily La Tribune said, without citing sources.

It quoted Air France-KLM financial director Philippe Calavia as saying the Delta joint venture must await the US airline's emergence from bankruptcy protection, which he said would not be for 1-2 years.

In October, Air France-KLM chief executive Jean-Cyril Spinetta called for closer ties with US airlines. He said these would not involve equity transfers or merger agreements but would be based on the model of the close partnership between its KLM unit and Northwest.

paris@afxnews.com

SOURCE: http://www.forbes.com/markets/feeds/afx/2005/12/06/afx2371477.html

To be honest, I am skeptical. I just can not see Delta wanting to merge in to Air France/KLM -Northwest maybe, but not Delta.

I will admit, however; if DL did merge into AF/KLM, I could see their service quality going up (which would be nice as their service is nowhere close to AF/KLM).

As always: all opinions and constructive criticisms are welcome.

Best Regards,
Btriple7  santahat 
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AirRyan
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RE: Air France/KLM/Delta/Northwest - One Company?

Fri Dec 16, 2005 11:53 am

Let's just say that much to my surprise, NW is actually considering this. Since NW owns preferred stock in CO that prohibits CO from merging with any other carrier, NW is in the drivers seat here if it comes to breaking the codeshare agreement with CO and taking over DL with the aid of KLM and Air France.
 
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Btriple7
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RE: Air France/KLM/Delta/Northwest - One Company?

Sat Dec 17, 2005 5:54 am

Quoting AirRyan (Reply 1):
NW is in the drivers seat here if it comes to breaking the codeshare agreement with CO and taking over DL

Somehow I see it the other way around. I see DL taking over NW, not NW taking over DL.
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flydl2atl
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RE: Air France/KLM/Delta/Northwest - One Company?

Sat Dec 17, 2005 6:02 am

Both NW and DL are BANKRUPT! Neither one will be buying anybody. If there is a "merger" it will be at the hands of outside forces...but neither DL nor NW is in the driver's seat here.
 
Electech6299
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RE: Air France/KLM/Delta/Northwest - One Company?

Sat Dec 17, 2005 10:18 am

Quoting Btriple7 (Thread starter):
single entity uniting Air France, KLM, Northwest Airlines and Delta

With all the serious discussions this past week, I just can't resist:

Do you think they will make NW replace the DC-9's?  Big grin
Send not to know for whom the bell tolls...it tolls for thee
 
FriendlySkies
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RE: Air France/KLM/Delta/Northwest - One Company?

Sat Dec 17, 2005 11:02 am

Quoting Electech6299 (Reply 4):
Do you think they will make NW replace the DC-9's?

Of course not! That's the long-awaited regional fleet replacement for AF!
 
jetdeltamsy
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RE: Air France/KLM/Delta/Northwest - One Company?

Sat Dec 17, 2005 11:08 am

Quoting AirRyan (Reply 1):
Since NW owns preferred stock in CO that prohibits CO from merging with any other carrier,

Didn't Continental buy their was out of that deal several years ago?
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
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breiz
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RE: Air France/KLM/Delta/Northwest - One Company?

Sat Dec 17, 2005 10:33 pm

Quoting Btriple7 (Thread starter):
I just read an article about Air France/KLM aiming to create a single company with Delta Airlines and Northwest Airlines.

Is this possible in practice? Isn't there US laws forbidding foreign companies to buy more than 50% of the shares of American companies?
Or if allowed, the company in question looses its status as American and what goes with it (slots allocation for an airline). See the example of DHL Worldwide which became "too" German and had to be renamed Astar Air Cargo in the US under a different ownership.
Please, American e-netters, enlighten me.
 
bobnwa
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RE: Air France/KLM/Delta/Northwest - One Company?

Sat Dec 17, 2005 10:45 pm

Quoting Jetdeltamsy (Reply 6):
Didn't Continental buy their was out of that deal several years ago?

CO did purchase most of the stock back, but as part of the sale of the stock by Northwest it received the rights to approve or not approve any CO merger.
 
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RE: Air France/KLM/Delta/Northwest - One Company?

Sun Dec 18, 2005 4:26 am

Quoting Btriple7 (Thread starter):
I will admit, however; if DL did merge into AF/KLM, I could see their service quality going up (which would be nice as their service is nowhere close to AF/KLM).

No US carriers service is up to the quality of a foreign carrier.

We want the lowest fares possible here, and are in denial that you don't get European level service with those low fares.

More on topic, this is nothing more than speculation and loose talk. This is a long ways off and a LOT has to happen for this ever to occur.

B
 
hjulicher
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RE: Air France/KLM/Delta/Northwest - One Company?

Sun Dec 18, 2005 9:50 am

I disagree, I remember reading somewhere that NW was trying to get DOT approval for them to share services with AF. I remember reading that NW wants the same partnership with AF as they have with KLM currently. The only problem to this is, is that if they were to merge, the three would be the most dominant of the atlantic, especially if KLM can codeshare with Delta, and NW can code share with AF in the way that they sell half or a quarter of seats on those flights. So in end, NW wants something like it has with KLM for AF, and since Delta is partners with both AF internationally and NW domestically, if AF and NW were to join, then by circumstance, DL merges with KLM in the same way. This four way super alliance with-in skyteam dominants all flights over the atlantic, and it is speculated that the ability to determine prices will monopolize this particular market. However, NW's desire to merge with AF is seen with AF beginning service into detroit at NW's request. Hence, AF passengers are able to connect onto Northwest flights, but the price structure is different than had AF passengers connected onto a delta flight. If AF and NW do merge, then I can see several more flights from Paris into Detroit. I also remember than, NW wanted to focus flying to skyteam hubs to facilitate passengers better by getting to them where they need to go by codesharing rather than directly flying them to the final destinations.

NW would increase flights to AMS, and CDG
NW would begin service to MXP, and FCO (year-round) for Alitalia connections.
NW may begin service to PRG
NW would not service other european cities than it currently does because the focus in hub-hub flying, and then connecting passengers. This is attempt by NW to strengthen their atlantic presence.

If you want more information, I remember reading an article in the Detroit FreePress from last summer talking about NW's plans.
LH 442
 
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jetjack74
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RE: Air France/KLM/Delta/Northwest - One Company?

Sun Dec 18, 2005 10:13 am

Most of this because Star and Oneworld alliance members are trying to enact anti-trust concerns against the alliance citing that several markets are threatened with a monopoly between these cities, CDG, AMS, JFK, ATL, DTW, and MSP. A merger between these carriers would erase this threat.

Quoting Breiz (Reply 7):
Is this possible in practice? Isn't there US laws forbidding foreign companies to buy more than 50% of the shares of American companies?

50% of US Airlines, not American companies. At this time, yes. There is a provision being lobbied to allow more than 51% foriegn investment in US airlines, but not outright foreign ownership. Doubt that would happen anytime soon.

Quoting Jetdeltamsy (Reply 6):
Didn't Continental buy their was out of that deal several years ago?

They did, but NW still has voting rights in CO, and is key vote in CO if they're attempted to be acquired

Quoting Btriple7 (Reply 2):
Somehow I see it the other way around. I see DL taking over NW, not NW taking over DL.

Neither, it would most likely be a merger, not a takeover, unless one or the other becomes more solvent then the other. Outside investors could provide the financial support to one carrier to buy the other, then it could become a takeover.
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letsgetwet
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RE: Air France/KLM/Delta/Northwest - One Company?

Sun Dec 18, 2005 10:21 am

Quoting Jetjack74 (Reply 11):
NW still has voting rights in CO, and is key vote in CO if they're attempted to be acquired

But there is nothing to stop CO from acquiring another carrier.
 
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Btriple7
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RE: Air France/KLM/Delta/Northwest - One Company?

Sun Dec 18, 2005 11:27 am

Quoting Jetjack74 (Reply 11):

Neither, it would most likely be a merger, not a takeover, unless one or the other becomes more solvent then the other. Outside investors could provide the financial support to one carrier to buy the other, then it could become a takeover.

When two companies merge, there is always a more dominate company. This company is usually (Keyword: usually) the more financially stable one. The dominate company is the one that will lead the way in the merger. In this case, that would be Delta. I'm sure some would disagree, but this just my opinion.

By the looks of things, both DL and NW would need to have complete agreement in order to pull the merger off. If one company held out on something (ie. one wants to have complete control of a particular market while the other won't let them), the merger would flop. I'm sure their oversea's counterparts will step in to help if DL and NW do decide to merge.

Regards,
Btriple7  santahat 
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amirs
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RE: Air France/KLM/Delta/Northwest - One Company?

Mon Dec 19, 2005 1:04 am

Quoting Breiz (Reply 7):
Is this possible in practice? Isn't there US laws forbidding foreign companies to buy more than 50% of the shares of American companies?

Its actually 24.9%