jrlander
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What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 6:00 am

Rumors are flying around regarding a NW/DL merger. I have no knowledge of such a merger. But I do think it is an interesting thought. So what would a combined carrier look like?

IF- which is a big one- the merger were to happen, I think we would see:

hubs:
JFK
MSP
ATL
DTW
SLC
LAX
NRT
AMS

focus cities:
CVG
MEM
SEA

long haul fleet:
A330's with the new lie-flat Delta business seat installed
767-300ER's and 767-400ER's with a new business class seat
747-400's with redone interiors including AVOD at all seats
777-200ER's and 777-200LR's
787's
(the 787's would slowly replace 767's)
757-200 ETOPS (NW fleet redone to be like DL's upcoming fleet)

domestic fleet:
767-300
757-300 (with AVOD at all seats
757-200 (NW planes redone to match DL planes)
737-800
737-700
A320 (NW planes redone like DL 737-800's)
A319- ditto

"Regional"
E-175
E-190
CRJ- 200
CRJ-700
CRJ-900

Clubs:
Two club system like Delta-
Business Elite clubs (or whatever name is used) placed at MSP, DTW, LAX, SEA.
WC at SFO becomes Business Elite lounge.

Terminals:
At SEA- international operations from South Concourse (WC becoming BE lounge), others from DL's A gates.
At LAX? My guess is they might use T-5.
What else?

The fleet would obviously be huge. It would allow some reallocation of planes to better markets. For instance, A330's could go to ATL and support larger demand European and South American Routes. Some of the 767's could go to DTW to support smaller markets. More planes may be available to support expansion at LAX (including, I would think, routes to South America)

The combined carrier, with reduced capacity at MEM and CVG, would probably quickly retire older DC-9's with high fuel costs. It might also decide not to take the 737-700's, and instead renegotiate to purchase more 777's or 787's.

This is all speculation, of course. But it is an interesting thing to contemplate.
 
haggis79
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 8:19 am

Well, I don't know how likely such a merger is - albeit I think it is far more likely than the much-talked-about-on-anet DL/UA combination given the overseas alliance connections of the respective carriers and given the fact that DL just has strengthend their relationship to AF and is in the process to strengthen their relationship to KL and NW (ATI planned from Summer 08, transatlantic joint-venture with AF/KL/NW from Summer 2010)....

but anyways, if you want me to speculate, I could very much imagine that DL/NW are going to pull a "soft merger" a la AF/KL, with both brands surviving at least for the forseeable future. I could see the Asia and Amsterdam flights being operated using the NW brand with the European flights being transferred to DL. This would save them much hassle about brand recognition and traffic rights in the first place, and AF/KL (as well as LH/LX) have been proven that such a merger can very well be successful.
300 310 319/20/21 332/3 343 AT4/7 143 B19 732/3/4/5/G/8/9 742/4 752/3 763/4 77E/W CR2/7/9 D95 E45/70 F50 F70 100 M11 M90
 
ConcordeBoy
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 3:41 pm

Quoting Haggis79 (Reply 1):
if you want me to speculate, I could very much imagine that DL/NW are going to pull a "soft merger" a la AF/KL, with both brands surviving at least for the forseeable future.

Agree.
DL/NW have extremely little fleet compatibility, and attempting to merge labor on that scale would be a nightmare beyond imagination. Then, there's still several Asian rights that could, in theory, be jeopardized by a traditional merger.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
EXAAUADL
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 3:59 pm

I giant cluster F&$K, how about that....rember the only people who want mergers are:

media: gives them something to write about other than Anna Nicole
Wall Street: $$$$$
Lawyers: $$$$$
Top Mgmt: $$$$$$


Megers are all about $$$$$$$$$$$$$$$$$$$$$$$$$$$ for a select few, employees, communities and pax all get the shaft
 
jetlanta
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 4:47 pm

Quoting EXAAUADL (Reply 3):
I giant cluster F&$K, how about that....rember the only people who want mergers are:

media: gives them something to write about other than Anna Nicole
Wall Street: $$$$$
Lawyers: $$$$$
Top Mgmt: $$$$$$


Megers are all about $$$$$$$$$$$$$$$$$$$$$$$$$$$ for a select few, employees, communities and pax all get the shaft

All good points, but they don't change the fact that every major U.S. airline is the product of multiple mergers over the course of time. They have always happened and will continue to happen. Fleets, labor, etc...are issues that get worked out over time. Even if it is messy in the beginning, people forget soon enough.
 
EXAAUADL
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 5:31 pm

Quoting Jetlanta (Reply 4):
All good points, but they don't change the fact that every major U.S. airline is the product of multiple mergers over the course of time

Is AA really the product of multiple mergers overtime, or just buying up bits and pieces here and there???

But beside that your point is well taken and perhaps is the source of so many airline industry problems


hmmmmm..i ve notived as trend:

More RJs=less profits
More Mergers=less profits
More MBAs=less profits
 
DL777LAX
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 5:41 pm

Quoting Jrlander (Thread starter):
What Would A Possible DL/NW Merger Look Like?

In one word?

F**KED!

why?

Unions at NW. Fleet commonality, Redundant hubs.

Whats to gain for DL?

an Asian network, big ass planes and did i mention the big ass planes?

Whats to lose for DL?

The very fabric of Delta's existence.
Blindly following anything is bad, unless of course your blind and your following a guide dog.
 
deltal1011man
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 5:58 pm

Quoting EXAAUADL (Reply 3):

i want it to happen it would make it much more easy to go to Asia

Quoting DL777LAX (Reply 6):
Unions at NW
well your wrong there ask WA what happened to there unions when DL merged with them(they where all gone but the pilots)

hubs (largest to smallest): ATL,DTW,MSP,JFK,LAX,SLC,NRT (i dont know what would happen to AMS and KL)
FC: BOS,SEA,MCO,MEM,CVG,LGA and DCA
fleet: A330s A32Xs 787 77L 77B 764 763ER 763 753 752 744 738 73G MD-88s and MD-90s and the DC-9s will go
77Ws will be ordered and will start replacing the 744s
then when the 737RS comes out DL places a huge order to replace 737,757, A32X and MD a/c

[Edited 2007-10-20 11:10:46]
New airliners.net web site sucks.
 
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1337Delta764
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 6:41 pm

I think the 767-400ER is the big question mark, as NW's A330 fleet is larger than Delta's 767-400ER fleet. This is one of the reasons why I oppose a DL/NW merger. Perhaps the 767-400ERs could be used strictly on European routes while the A330s can be used on some Asian routes. If the merger was a soft merger, then the 767-400ERs may continue to be operated.
The Pink Delta 767-400ER - The most beautiful aircraft in the sky
 
deltal1011man
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 6:50 pm

Quoting 1337Delta764 (Reply 8):
I think the 767-400ER is the big question mark, as NW's A330 fleet is larger than Delta's 767-400ER fleet. This is one of the reasons why I oppose a DL/NW merger. Perhaps the 767-400ERs could be used strictly on European routes while the A330s can be used on some Asian routes. If the merger was a soft merger, then the 767-400ERs may continue to be operated.

i wouldn't worry about the 764s and i think NWs A330s are leased right? DL owns there 764s. When they merge everything will pretty much stay just like they are now most airbus will stay at MSP,DTW and boeing at ATL,SLC,JFK and LAX(the later being more ERJs but some Boeings)
New airliners.net web site sucks.
 
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SLCUT2777
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 6:56 pm

Do we have to start this merger $hit again!  irked  We just discussed this last August according to a search. While some might like this, until there is more concrete evidence; strong words from both Mr Anderson and Mr Steenland, then I suggest we quit piddling with this!!!!
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
 
bobnwa
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RE: What Would A Possible DL/NW Merger Look Like?

Sat Oct 20, 2007 7:04 pm

Quoting DeltaL1011man (Reply 9):
i wouldn't worry about the 764s and i think NWs A330s are leased right? DL owns there 764s

Some of NWA's 330's are leased some are owned just like DAL and the 767-400. None of the 767-400's or A330's are owned outright by either carrier. They have very large loan payments due every month. This is also true of most carriers, however Northwest totally owns all of its DC-9's, before someone asks.
 
azjubilee
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RE: What Would A Possible DL/NW Merger Look Like?

Sun Oct 21, 2007 4:23 am

IF there is a merger, I predict it will be modeled after the AF/KLM group. If a true mergers happen in the future, I don't think 2 larger carriers will combine. I think it would be a large and a small/medium combining or two small ones. No mega mergers.

IMO - NWA/DL = a mess if integrated



AZJ
 
AirframeAS
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RE: What Would A Possible DL/NW Merger Look Like?

Sun Oct 21, 2007 4:27 am

Quoting Jrlander (Thread starter):
What Would A Possible DL/NW Merger Look Like?

That's easy to answer: A snowball's chance in hell. Nuff said. Game, set and Match!
A Safe Flight Begins With Quality Maintenance On The Ground.
 
baw716
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RE: What Would A Possible DL/NW Merger Look Like?

Sun Oct 21, 2007 11:19 pm

My two cents...

I've seen this topic discussed more than once...and the answers still remain the same:

Assuming for the moment that DL/NW even want to merge (and there is no information I have that states that they are even talking about it), merging the two carriers would be a nightmare of epic proportions.

One aspect that is a cost disaster is fleet: DL is all Boeing (mainline) and NW has a mixed Boeing/Airbus fleet with it now being the largest A330 operator (I read this just the other day). The fact that these would have to be integrated is too mind boggling to even contemplate...and this is just ONE factor.

I agree with those on this forum who advocate a AF/KL kind of structure, with two operations with only those aspects of the company that can be combined to achieve cost reduction and or increased efficiencies being merged. That said, there would be huge DOT hurdles as well as foreign government concerns (Japan?). Right now, they are in the SkyTeam alliance. The only potential benefit would be to introduce carrier wide code sharing, but frankly, I see the other members of the alliance (those in the Pacific) having issues with that.

Let NW and DL fix their own houses and operate as two separate carriers within the scope of SkyTeam. Right now, this seems to work fine and there is no reason to make a change.

baw716
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
 
BoeingBoy
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RE: What Would A Possible DL/NW Merger Look Like?

Sun Oct 21, 2007 11:23 pm

We need a RUMOR forum established so that we don't have to wade thru all CRAP to see what's new.
10% is the best we can do
 
gigneil
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RE: What Would A Possible DL/NW Merger Look Like?

Sun Oct 21, 2007 11:31 pm

Quoting EXAAUADL (Reply 3):
rember the only people who want mergers are:



Quoting EXAAUADL (Reply 3):
Wall Street: $$$$$

Wall Street owns the company. Making money is why it exists.

Quoting 1337Delta764 (Reply 8):
This is one of the reasons why I oppose a DL/NW merger.

Because of the 767-400s?

Quoting DeltaL1011man (Reply 9):
i wouldn't worry about the 764s and i think NWs A330s are leased right? DL owns there 764s.

Not really, no. The 764 is an inferior aircraft in just about every way. If they keep it, which I'm sure they would, it would almost certainly go back to doing Hawaii runs.

NS
 
gsosbee
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RE: What Would A Possible DL/NW Merger Look Like?

Sun Oct 21, 2007 11:39 pm

The fleet issue (not just a potential DL/NW merger) is interesting. I am not all that sure that the fleet differences are as important as normal M&A issues and the union issues.

Each existing airline has a fleet and a group of flyers and maintainers for that fleet. Sure you would like everything complementary, but over a given strategic planning period the fleet issues somehow work themselves out. (In fact one line of thought is that it gives the company to pick from the best route/aircraft applicability. Worse case it give the company a big hammer with both A &B.) In each of the airline deals that we have reviewed, the fleet issue was way down the chain as areas of concern for us.

The union issues on the other hand are the killers.
 
Lono
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RE: What Would A Possible DL/NW Merger Look Like?

Sun Oct 21, 2007 11:55 pm

Quoting DeltaL1011man (Reply 7):
wrong there ask WA what happened to there unions

WA's unions went buh by...... it was ugly.....
Wally Bird Ruled the Skys!
 
gigneil
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RE: What Would A Possible DL/NW Merger Look Like?

Sun Oct 21, 2007 11:57 pm

Quoting Gsosbee (Reply 17):
The fleet issue (not just a potential DL/NW merger) is interesting. I am not all that sure that the fleet differences are as important as normal M&A issues and the union issues.

I don't think the fleet issues are of any concerns at all, actually...

NS
 
watewate
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 12:06 am

^ what he said.

Fleet commonality isn't a deal breaker on a merger as as big as this. Costs of operating different types are spread over so many aircrafts that it probably is cheaper to maintain A+B fleet rather than to get rid of types from one manufacturer quickly.

If they can manage to do what AA did with its MD80/737 @ DFW/MIA - i.e. fly certain types from particular bases, fleet complications would certainly be workable. I reckon that they'll hold on to the short-haul fleet until the 737/32x successor comes along.

If I were a shareholder for DL, I wouldn't mind this deal provided that the new entity can work through the labor integration mess - not an easy task by any means. If I held NW shares, however, I'd be hesitant to jump on this proposal. What does NW get out of this deal? It's got a great pacific network and a relationship with KL that's the envy of the industry. DL seems poised to make some noise with its recent announcements into Europe, but will they pay off? Also, DL will need to spend heavily to update JFK and LAX facilities to support their recent expansion announcements - so where is the near/medium-term upside for the investors aside from obvious synergistic savings? Those savings, while substantial, probably won't create enough value to make the merger worthwhile since the costs have been slashed during the carriers' restructurings. If such merger happens, chalk one up for the bankers, lawyers and fund managers. The employees and investors come out on the losing end.

If they really want to create value, they need to get away from this fantasy mergers and monetize what they already have by spinning off the non-core activities.
 
lrdc9
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 12:19 am

Quoting Jrlander (Thread starter):
domestic fleet:
767-300
757-300 (with AVOD at all seats
757-200 (NW planes redone to match DL planes)
737-800
737-700
A320 (NW planes redone like DL 737-800's)
A319- ditto

"Regional"
E-175
E-190
CRJ- 200
CRJ-700
CRJ-900

No DC-9s!!!!!!!!!!!!!!
Just say NO to scabs.
 
TL8490
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 12:48 am

Does anyone else think the Delta boys got a look at the AF/KLM playbook while they were in Paris and are now ready to talk about that kind of merger more so than before. It just seems that a DL/NW hook up similar to AF/KL would be great...

Think about it....you leave everything the same...then slowly..go to one reservation system..then slowly order planes as one group the integrate ground personnel...then the flight attendants..then finally the pilots ..over a period of years...I still think this is already going on...the NW flight attendants use DL training materials for some things now...


just 2 more cents
 
777STL
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 1:06 am

Quoting Gigneil (Reply 19):
I don't think the fleet issues are of any concerns at all, actually...

Indeed. I think the importance of fleet commonality is grossly overstated here on airliners. Mostly by people who don't know what they're talking about. Fleet commonality is secondary to a number of things, it's really a minor detail.
PHX based
 
Evan767
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 1:34 am

Hubs:
ATL (mega-hub for domestic, Latin America, Europe, and a little Africa and Middle East) (One flight to the Orient and that's NRT)

JFK (similar to right now - mostly international traffic to Europe, Africa, and Middle East with connections to many east-coast cities and major west coast cities) (One flight to the Orient and that's NRT)

MSP (gateway to NRT and Asia)

MEM (domestic hub similar to Delta's CVG)

SLC (Hub for connections in the west, with minimal international flights except to Mexico and Canada) (One flight to the Orient and that's NRT)

NRT (Onward connections to Southeast Asia)

Focus Cities:
LAX (O&D mostly)
MCO (Similar to Delta's current operations)

There's a real problem with the DTW, MSP, MEM, and CVG integration. My guess is two would go, two would stay. CVG has high operating costs so my guess is that would be on to be downsized. It's a toss-up between MSP and DTW but I picked MSP just because it is further north and west allowing for better connections to Asia. MEM would serve as a domestic hub.

Fleet:
ERJ 135/145
CRJ 100/200/700/900
737 700/800
A319
A320
757-200 (fleet reduced domestically, more planes internationally)
757-300
767-300 for the timebeing until a plethora of 787's arrive
767-400
A330
787 order to help phase out 767's and 757's

DC-9's, MD-88's and MD-90's finally phased out in favor of A319's
747-400's phased out in favor of newer A330's, 767-400's, and 787's

Delta name, brand, and product stays.

Wow, I am a true loser.
The proper term is "on final" not "on finals" bud...
 
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SLCUT2777
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 1:50 am

Quoting Evan767 (Reply 24):
Wow, I am a true loser.

Yest you are!  biggrin 

Quoting Evan767 (Reply 24):
757-200 (fleet reduced domestically, more planes internationally)
757-300
767-300 for the time being until a plethora of 787's arrive
767-400
A330
787 order to help phase out 767's and 757's

You left out the 777s of DL. IF (& it's a very big IF) this were to happen, I would venture to say you'll see a large fleet of 773ERs in addition to all the new 772LRs DL has coming.

Quoting Evan767 (Reply 24):
SLC (Hub for connections in the west, with minimal international flights except to Mexico and Canada) (One flight to the Orient and that's NRT)

SLC-NRT? I HIGHLY doubt that one! Perhaps Europe with 1x SLC-CDG for connectivity sakes.
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
 
gigneil
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 1:56 am

Either MSP or SLC will go.

I would really bet on it being MSP.

NS
 
centrair
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 2:11 am

Here it is:
Parent Company we call it Dornel Group (combination of the first 3 letters from Delta and Northwest)
It has 5 subsidiaries. NW, DL, NW Cargo, Regionals and ground

1) NW and DL maintain their current conditions with changes happening over a 10 year period. Changes are mostly contractural and help to bring a balance. The two airlines actually never "merge" in the traditional sense. They are just two companies under the same parent. All flights can be codeshares but their interior product and marketing can be different. Marketing and sales would be handled by Dornel Marketing (parent company division). Call centers merged

2) NW cargo stays as is. UNTOUCHED. Of course Delta can still carry cargo but it is just not the same as a 747F.

3) Regionals. MERGED in traditional sense. Names reflect new entity. Regionals divided in two categories ala NWA; one handling up to 60pax and another up to 76pax or something like that. Pinnacle operates for both. NO PROB.

4) Ground. All ground is merged under a new name, we can call this, Cardinal Airline Services. (Cardinal is found in both Georgia and Minnesota. Red is a color shared by both airlines. Cardinals are strong and beautiful.) This company does maintenance, baggage handling, refueling, and even catering. Catering would be streamlined with new standards from both Delta and Northwest.

By merging this way, they consolidate in some areas but not in others. They can keep brand loyalty, rights associated with a name and traditions of the companies. Another aspect of this idea is that they don't have to deal with different aircrafts and crew unions. One of the best parts is that the parent company, Dornel group, can borrow against any other part of the company.

The long-term goal of this kind of merger is that the new parent company can slowly change contracts of piots and crews to line them up with the other mainline subsidiary. This would also allow a person to move from Delta to Northwest and vice-versa without much of anything. Example: a pilot who is flying out of MSP for NW but is originally from Orlando, can transfer to Delta and not have to start too low. They can have fluid transfers.

My hope is that this type of merger happens and the parent company can further diversify the business to include non-aviation related subsidiaries. In this industry, the portfolios are dry and can be risky investments. It is time for new ideas and new approaches to mergers, aquisitions and running things.
Yes...I am not a KIX fan. Let's Japanese Aviation!
 
af773atmsp
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 2:33 am

If NW and DL merged I think it would look like this:
Hubs:
ATL (largest hub)
MSP (gateway to Asia)
NRT
AMS
DTW (gateway to Europe)
SLC

Focus cities:
SEA
LAX
JFK

International fleet:
744 (order for 748 to replace 744)
A333 and A332 (replace 764)
Transatlantic 752
788 (replace 763)
772

Domestic fleet:
C Series (repace DC-9-30)
A320 (replace MD-88 and MD-90)
A319 (replace DC-9-40 and DC-9-50)
752
753
738 (add winglets and replace DC-9-40 and 50 series)

Regional fleet:
CRJ-700 and 900
Saab 340
ERJ-135, 170, and 175
EMB-120
It ain't no normal MD80 its a Super 80!
 
gsosbee
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RE: What Would A Possible DL/NW Merger Look Like?

Mon Oct 22, 2007 10:38 pm

Congratulations Centrair, you have seen the future.
 
MMEPHX
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RE: What Would A Possible DL/NW Merger Look Like?

Tue Oct 23, 2007 12:31 am

If both airlines have just gone through bankruptcy, operationally they must in theory be at their most cost efficient. Both have large fleets so commonality and cost savings there are negligible (100 A32X + 100 737 = same cost together or separated, there are limits to the scale of efficiency) I'd actually be interested to know if the type of aircraft are even a real issue when companies come to talking about mergers. If they don't like them they can always get a plan to get rid of them (AA & TWA comes to mind) I doubt anyone in the corporate management is sitting around thinking that a 764 fleet isn't going to work with an A330 fleet, so lets call the whole thing off.

There might be some back room management savings or doubling up on certain of the smaller stations but I doubt mega savings which is the usual thing that makes mergers attractive. Throw in the poor credit market at the moment and I just don't see it happening in the near future. Who knows what will happen in the longer term though.

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