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UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 7:38 pm

I was trying to book my winter vacation to Florida on United. I noticed that the southeast US and particularly Florida seem terribly underserved by United. Also, all the smaller airports I considered as destinations are served by one carrier only, namely Delta. So I went ahead and compared the two route networks a bit and it seems to me that Delta and United would complement each other very well. Certainly better than US and DL would have. I know that this is probably not going to happen, but I think that of all possible merger scenarios this one seems to make most sense. Anybody care to agree or object?
 
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aloha73g
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 7:56 pm

I totally agree with you. If you are simply comparing route systems a DL/UA merger makes alot of sense.

UA: strong in the West/Asia
DL: strong in the East/Europe

Fleet wise there is some overlap, but some issues as well:

Both have:
772
763
752
737 (UA: 733/735 DL:738)

DL Only:
MD 88
MD 90

UA Only:
744
A320
A319

It will probably never happen, but if it did the new carrier should be named PanAm since it would be a reunion of PanAm's old Atlantic/Pacific networks, this time with an unbelieveably strong domestic network cantered around LAX, DEN,ORD, ATL,IAD, NYC & SFO

-Aloha!
Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
 
D L X
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 8:03 pm

Why have a merger if it's simply additive? You don't necessarily get gains when you just add what you don't have, because those things you don't have come with costs that you don't have also. Merging with a company with which you overlap causes the costs of the merged entity to go down relative to the combined costs of the individual entities.
 
isitsafenow
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 8:08 pm

I am a former airline employee with three carriers in three different areas of employment. I am now a business owner here in Michigan
so I look at things in a business sense. My Q to you and A-net would be ....
What does DL have than United would want from a merger that would help UA turn a dollar better than
they are now?

thanks to all
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
deltagator
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 8:22 pm

Quoting Isitsafenow (Reply 3):
What does DL have than United would want from a merger that would help UA turn a dollar better than
they are now?

Who says United is doing the buying? That question (a valid one that some corporate bigwigs just don't get) could easily be posed in reverse.
"If you can't delight in the misery of others then you don't deserve to be a college football fan."
 
DiscoverCSG
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 8:36 pm

Quoting Aloha73g (Reply 1):
UA: strong in the West/Asia
DL: strong in the East/Europe

I would add that DL is strong to the Caribbean and Latin America, too. And just to be fair, UA has LHR rights.
 
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SLCUT2777
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 8:45 pm

Quoting DiscoverCSG (Reply 5):
I would add that DL is strong to the Caribbean and Latin America, too. And just to be fair, UA has LHR rights.

They could finally abolish the SLC hub, move it down to a focus operation or less since so many on a.net can't believe SLC gets as much traffic as it does!  sarcastic 
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
 
hiflyer
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 8:50 pm

Yes...DL will fill the SE Hole that UA has...no question. The overlap DEN/SLC would have to be addressed as well as the IAD/JFK for Intl. CVG has already been pretty much downgraded to RJ so CVG/ORD would not be much of an issue.

Fleet conflicts are quite minimal actually. The main narrowbody fleet, older MD products vs airbus with a smattering of various generations of 737, would be the major deal with secondary being the engine differences on some widebody types. Both UA and DL, on their own, are expected to make a major buy in this area soon for both narrowbody as well as widebody...especially for 757/767 replacement.

Routes...DL brings both the SE and Latin America quite nicely to the table to counter UA's Pacific. Both cover Europe well with DL into more cities but UA holding the golden key at LHR. Africa would be the hole on both maps with DL already working on going that way as well as UA is apparently too aircraft starved to look that way.

Interesting thought....lot of financial as well as politics in there as well...as well as brand loyalty.
 
DiscoverCSG
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 8:51 pm

Quoting SLCUT2777 (Reply 6):
They could finally abolish the SLC hub, move it down to a focus operation or less since so many on a.net can't believe SLC gets as much traffic as it does!

Well, as we say in CSG, "I don't have a dog in that fight," so I'm not going to say SLC should go away, but having SLC and DEN does seem slightly redundant.

Then again, these two hubs plays different roles in each carrier's network:

SLC is a mountain west/west coast connecting hub that can also funnel some pax eastward. It's more realistic to fly SEA-SLC-SAN (for example) than to fly MCO-SLC-ABQ.

On the other hand, DEN is a major east-west hub that happens to be situated in the mountain west. Because it's just one state eastward, MCO-DEN-ABQ becomes less out-of-the-way than SEA-DEN-SAN.

Anyway, that's what it looks like from the balmy southeast.
 
NoUFO
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 8:53 pm

Wouldn't the Federal Cartel Authority prohibit a merger of two giants anyway?
I support the right to arm bears
 
isitsafenow
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RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 9:55 pm

Quoting DeltaGator (Reply 4):
Who says United is doing the buying?

Well, as of today, United is in a better financial situation then Delta...so you go with common sense on
this "what if".
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
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United787
Posts: 2190
Joined: Fri May 20, 2005 12:20 pm

RE: UA/DL Merger (No, Not A Rumor, Just An Idea)

Thu Mar 15, 2007 10:12 pm

Quoting Isitsafenow (Reply 3):
What does DL have than United would want from a merger that would help UA turn a dollar better than
they are now?

Two things:

1. A Southeast Hub (ATL) that would allow to UA to fill its biggest hole, Latin America.
2. A NYC Hub for a bigger presence to Europe.

IMHO, a more complete network should be a more efficient network. United's system would help funnel more people through ATL to Latin America and Delta's system would help funnel more people through SFO, ORD, & LAX to Asia. They would both be able to capture a bigger segment of the market.

For instance, since I am a loyal United flyer, when flying to a Latin America destination, I would be able to fly on UA/DL rather than choose CO or AA.

or

Loyal Delta flyers that want to go to Asia essentially have 2 American carrier choices, NW or UA, and numerous foreign
carriers. After a merger, I would bet that most of those Delta flyers would be choosing UA.

I think a UA/DL merger and UA/CO merger would have the same type of effect although I think the fleet commonality is better with CO, correct me if I am wrong!

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