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Possible Northwest/American Merger?

Thu Jun 01, 2000 10:14 am

I would like to know your thoughts on a possible Northwest/American merger. I know they would be interested in the Pacific routes of Northwest's but what would they do with the domestic system. American already has a hub in Chicago what would they do with Minneapolis and Detroit.Also what would they do with the Airbuses and the DC-9 Fleet? By the way, this is my first post on here.  

RE: Possible Northwest/American Merger?

Thu Jun 01, 2000 10:44 am

I am for a NW/AA merger. Of course, the Pacific routes are very lucrative, but I think also the Memphis hub, and even the Detroit hub. I think MSP will go. The aircraft don't bother me that much since Boeing would gladly trade some 737's for the Airbus and DC-9's. Also, NW is rumored to be interested in the 777-100X for the DC-10, which would fit into the fleet nicely. The 747's will also be eventually phased out and replace with 777-300ER, etc. I bet Boeing wants to see this happen since the last time AA merged, they got 20 757's out of it.

The KLM tie-up is also nice and since BA and KLM are rumored to be in talks, it could be very intruiging (sp?) globally.

Also, if this does happen, I forcast a new livery for AA.


P.S. Welcome to the forum! 
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RE: Possible Northwest/American Merger?

Thu Jun 01, 2000 11:09 am

Welcome to the forum!

Personally I'm against an AA/NW tie up. I would kind of like to see the NW name live on, but that's beside the point. I personally feel that a continued code-share alliance with CO is better. The NW and CO networks complement each other nicely, and I like the way it works. Given a few improvements, that's my preference, although an Alaska Airlines being thrown in with NW/CO would also fit in pretty well.

Now, into the conjecture. First of all I want to point out that NW has a good Canadian route network. This is very important with AA is losing it's alliance with Canadian Airlines, and needs a new partner, or else it needs to add more routes on it's own into Canada, which is a fairly important international market for AA. NW has a very comprehensive network to Canadian cities, but this would also create some problems. For one thing, MSP (and DTW) are part of the reason why they have a strong Canadian presence. A fairly reasonable amount of the traffic on NW that is routed to MSP is origin/destination traffic. Now granted, there is also a fair amount of connecting traffic, but if there was a downgraded hub at MSP or even stopping MSP's hub activity then it would be a major problem for AA. If flights were sent to other hubs then it would be likely some Canadian destinations would have to be discontinued as the lack of MSP local traffic would make them unviable, which would eliminate any advantage NW/AA would have over Air Canada. Secondly, it would open up the important MSP-Canada market for AC to grab hold of, while at the same time creating problems at ORD where AA/NW would easily be outdone by AC/UA.

Now on the fleet question. I really don't see that NW could amalgamate with anyone. The Airbuses are good aircraft, but they don't fit with any of the airlines in the southern US, and they use CFM56 engines so they don't fit with America West's Airbus fleet, either.

One last thing: I'm not really sure that bigger is better in this case. Merger problems would be huge, I would think it would be more efficient just to hammer out code-share agreements and keep the airlines separate even if NW/AA did tie up.

RE: Possible Northwest/American Merger?

Thu Jun 01, 2000 12:01 pm

I agree with AC183 pretty much on that one. As in previous posts I've made known my belief that mergers like the ones that took place in the 70s and 80s will not occur anytime soon. US/UA is far from certain. 50/50 chances are really pretty conservative. Also very likely, DC Air, won't leave the ground and US/UA might have to give a little more. Truthfully I'm not even sure where! From this I suspect AA will take what comes available. DCA is very attractive and already US shareholders are suing the airline claiming the spinoff underestimated the value of those DCA assets. They may have a legit. claim. Look for other airlines to pick from what justice requires US/UA to divest.
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RE: Possible Northwest/American Merger?

Thu Jun 01, 2000 1:46 pm

NWA104...WELCOME!!!!..I'm sure you'll enjoy this forum.

With regard to the merger question, I would LOVE to see it happen. I live in Detroit (right in the final approach path of runway 21-Right), and I would welcome the presence of "silver birds" flying over the metro Detroit skies. All I see when I look out of my window during the arrival rush is that infamous (and in my opinion, UGLY) red tail. The silver and grey birds of American will accent the Detroit skyline like a new skyscraper. Northwest is currently building a multi-million dollar mid-field terminal at DTW, making the airport one of the most modern and convenient in the county. I would love to see a sleek row of AA 737/757/767 parked there, as opposed to a row of Northwest DC-9s, which would probably be interrupted by an occasional A320.

But speaking practically, I don't think this merger would happen, simply because the resulting route system would look like a plate of of very sticky speghetti (without the sauce). Unfortunately, the feasibility of a merger is not determined by "how nice the planes will look." To my understanding, and I may be wrong, I don't think a merger has taken place strictly because one airline has a better livery than the other. On this basis, US Airways would be buying United!!!!

Welcome to the forum.

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RE: Possible Northwest/American Merger?

Thu Jun 01, 2000 2:24 pm

I know this almost sounds idiotic, but if you look at a combined AA/NW route system the hub that makes the most sense to disable is ORD. DTW and MSP are pretty good compliments to each other in the midwest and have been a solid combination for NW. At ORD United is the dominate carrier, and will continue to be the dominate carrier. No other airport in the U.S. supports two large connecting airline hubs. (I konw AA and DL both hub at DFW, but DL only has about 130 flights out of there and only codeshare international service. Same with other examples like DL and AirTran at ATL ect. I do not consider those major connecting hubs like the two operated at ORD, I am talking about large 200+ flight hubs.) When the slot restrictions end at ORD in 2002 and United can expand without limitations, it is my personal opinion that it is going to hurt American. If they drop ORD and were to move to DTW, MSP the AA European routes would shift to DTW. Both DTW and MSP are roughly operated at about 350 flights per day. That would be 700 flights a day operating out of hubs in the midwest, compared with the 340 they currently run out of ORD. The 700 flights a day would also be greater than United's ORD hub even after they expanded it making them the largest carrier in the midwest. They could easily build Canada as well, a important market for AA as the two previous posts have pointed out, even keeping some of the slots to operate from ORD into Canada. Not to mention out of DTW and MSP they could reach more markets in the midwest than they currently serve. Not to mention that MSP has a new runway on the board and a new terminal opens up soon at DTW and both MSP and DTW operate with far fewer delays than ORD. The main thing AA would be giving up is the origination and destination traffic at ORD, which I grant you is significant. Imagin the $$$ AA would bring in selling off the assets it has at ORD. It might even trade ORD assets with United for an asset on the east coast aquired in the USAirways deal.

AA would get a pacific network that is larger than United's and would have a significant presence in all three of the major international markets from the U.S. (Pacific, Atlantic, Latin America) just like United has, in fact they would be larger than United in all three areas. Memphis would probably get dropped and combined with DFW because of the airports are to close. The only real problem is the fleet. They do not match up to well.

Granted this is a lot of speculation. I do not think that AA will actually go through with a merger (they might announce one) unless the United/USAirways merger is completed. If the United/USAirways deal does go through I think you will see a lot of things happen, and scenarios like the one I have described might not be to far fetched. The route systems do not overlap to much with the exception of the logjam in the midwest.
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RE: Possible Northwest/American Merger?

Thu Jun 01, 2000 10:34 pm

Dear NWA104,

Welcome, hope you enjoy the forums! I think an American/ NWA combo is very likely if the UA-US deal, God forbid, is approved.

Many journalists and experts have raised the possibility that American could kill the UA-US deal with the Justice Dept, by filing their own buyout/merger plan while UA-US is still pending. Congress' and consumers and businesses would be (rightly) overhwhelmed by fear, and both deals would get killed.

These journalists and experts, in my view, are all wet. The other major carriers would like nothing better than to combine as UA-US are trying to do. They would be the last parties to try to kill the UA-US deal, because if that deal is approved, the Justice Dept would essentially be approving all three (with AA-NW and DL-CO the likely other two).

American, et al, will grumble here and there about "protecting their position," but they won't try to kill the UA-US buyout. It's in their interest, because once they get to play too, they can screw medium-sized and small cities just like they've all been doing, on a scale like never before. Profit margins increase, travelers' wallets decrease.

Need a new airline paint scheme? Better call Saul! (Bass that is)
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RE: Possible Northwest/American Merger?

Thu Jun 01, 2000 11:28 pm

Welcome to the forums, NWA104. I am totally against the AA/NW merger. NW/CO is doing good right now for NW. Plus, I fly with NW a lot, and I am not a big AA fan. (But, I like NW) With NW/CO, I can't really see a benifit for NW. NW and its alliance has routes all over the World, and NW's weaknesses in Latin America and the Eastern US are served by CO. I can see many benifits to AA, but not NW. Anyway, what about the large number of DC-10's(AA's getting rid of), Airbus 320 and 319(NW has a large number of them; AA has none), and the huge number of DC-9.(AA has none; they are aging) But I guess there is one benifit to NW, oneworld.  
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DTW And MSP In NW/AA Merger

Fri Jun 02, 2000 2:45 am

In my opinion, the hub at Detroit would not be closed in a merger. Northwest currently has over ten international routes out of Detroit which are fed by the vast number of Northwest flights into Detroit. With the new terminal being built, Wayne County officials will do everything in their power to keep Detroit as a hub for the merged airline. A similar case holds for Minneapolis. It is a great hub for Northwest, and I don't see why it couldn't work out for AA if United isn't planning on destroying USAirways' operations in Philadelphia and Pittsburgh.
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RE: Possible Northwest/American Merger?

Fri Jun 02, 2000 3:41 am

Well, it's plausible. If it happens, I think Minneapolis would be the more
likely hub to close. Detroit is, after all, the carrier's international hub.
Memphis is also likely to be axed. it's close to Nashville (AA and DFW)

What a mess though. NW and AA? So much for the "coach has more
class" campaign!

RE: Possible Northwest/American Merger?

Fri Jun 02, 2000 4:28 am

A lot of you guys would just like to see it happen and I would to, but think of what would happen. Less compatition means more expensive fares. It's as simple as that, unfortunatly.

(pardon my spelling)
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RE: Possible Northwest/American Merger?

Fri Jun 02, 2000 4:34 am

One thing no one has mentioned in all this AA/NW speculation...The CO stake.DoJ would more than likely require a divestiture of that.Anyone care to wonder how long it'll take Leo Mullin to get on the "Red Phone" with Don Carty with an offer he "Can't refuse"?

"Avast ye scurvy dogs...Prepare to be boarded!!"  

Another thing..CO EWR...
AA scaled down BNA a few years ago....where ya been?
Yes, I actually *do* work for an airline,how about you?

RE: Possible Northwest/American Merger?

Fri Jun 02, 2000 5:02 am

CO wants to get rid of NW. This would be really convenient for a multitude of interested parties indeed...
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RE: Possible Northwest/American Merger?

Fri Jun 02, 2000 6:36 am

I would like to see this alliance fall through but because of ORD,MSP,and DTW, I doubt this would happen, they are too close to each other and the new airline would basically be competing with itself. but internationally, it would be great AA wants asia,NW wants latin America and a little europe. but in terms of aircraft, that may have a problem, if they merge, say good bye to the 747 and A320 and DC-9 but I would like to see different types of NW at my home airport instead of dc-9 being parked at the delta terminal acrosse from the always busy AA terminals.
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RE: Possible Northwest/American Merger?

Sat Jun 03, 2000 3:17 am

Well, it looks like Northwest/American might happen after all... check out the following link:


Personally I think the 747s will stay (at least the -400s). It will be nice to see 747-400s in America's livery! The DC-10s and DC-9s will be the first to go. Maybe Boeing will take the A320s in trade for more 737NGs.

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