Posts: 1325
Joined: Fri Sep 08, 2000 2:54 am

Do DL/CO/NW Have To Merge?

Wed Feb 07, 2001 3:00 pm

My question is, why can't DL , CO , and NW just create an alliance such as the CO/NW deal now. NW/CO have a substantial market share with their alliance and with DL onboard they would have the biggest market share in the industry.

While they would not have to deal with all the problems of a merger and the customer would be happy because they would still have the ability to choose between several airlines, not just three?

I think a "mega alliance" between DL, CO, and NW is much more attractive than a "mega merger" of all or part of the three.

Posts: 3894
Joined: Fri Apr 21, 2000 5:03 am

RE: Do DL/CO/NW Have To Merge?

Wed Feb 07, 2001 3:15 pm

That's a big question mark. If the Bush Administration approves AA-TW and UA-US, the others will bleat that they have to merge too to remain competitive. I'm not convinced, but the DL-CO-NW will simply bleat and bleat, year after year, until they'are allowed to merge. Industries don't usually settle out in two sharply distinct tiers of major companies.

The funny thing is, AA-TW wouldn't produce that unbalanced situation in the industry. AA-TW would give AA 22.6 percent of the US market, only 2.4 percent more than UA has now. I don't see any structural reason for any merger other than AA-TW to be approved, but Don Carty cannily stapled AA-TW and UA-US together in order to save the yummy anticompetitive round of consolidation the execs all want.

I'm still undecided, but am leaning towards allowing AA-TW and canning everything else. The industry won't be *that* out of balance if only AA-TW merge.

Need a new airline paint scheme? Better call Saul! (Bass that is)
Posts: 1325
Joined: Fri Sep 08, 2000 2:54 am

RE: Do DL/CO/NW Have To Merge?

Wed Feb 07, 2001 4:12 pm

That was my point. AA/TW is only a little larger than the UA we all know (and love...ha) today. So let AA/TW do their thing to save TW employees and STL, but make the others stay the way they are.

All the airlines are then more or less equal

CO/NW alliance

and the rest

Posts: 569
Joined: Wed Jan 24, 2001 12:09 pm

RE: Do DL/CO/NW Have To Merge?

Tue Feb 13, 2001 11:53 am

Yeah, that's true, and Delta, Continental, and Northwest could always do something to compete more heavily, they're good companies, they can think of something.