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Topic Author
Posts: 101
Joined: Fri Oct 01, 1999 8:15 am

Northwest/American Possible Merger?

Sun Jul 02, 2000 1:07 pm

I ran across this a few minutes ago!

I think it's pretty interesting. What do you guy's think?
Purdue Arrow
Posts: 947
Joined: Tue May 25, 1999 1:49 pm

RE: Northwest/American Possible Merger?

Sun Jul 02, 2000 1:29 pm

I think that such a merger is imminent if UAL/USAirways goes through. However, I believe that AA and NW are trying to make sure that the UA/US deal does not get through regulators.

"American Airlines officials hope to have a deal in the works by the time the Justice Department begins its review of the United-USAir deal."

Why would this be? So that the regulators can confirm the fear that allowing this merger will create a wave of consolidations resulting in, most likely, 3 carriers that dwarf the remaining 4 majors (TWA, AmWest, Alaska, and WN). I think that it may hurt American, though, to announce this before the China routes are awarded because I think it's likely that DOT may decline to award the rights to American in case their merger goes through; after all, the new AA would have all of NWs rights to the Chinese market, as well as to the rest of Asia.

For future reference, a little basic HTML can be used to make that an actual link... just type the following:

Text you want to appear as a link

The result will look like this:
Text you want to appear as a link
and will link to the article. Where the article's URL is in the example, place the full URL of the site you are referencing.
Purdue Arrow
Posts: 947
Joined: Tue May 25, 1999 1:49 pm

RE: Northwest/American Possible Merger?

Sun Jul 02, 2000 1:34 pm

Apparently between where you review your post and submit it the last time, the server again analyzes HTML, because it didn't put up what it was suppoesed to. The first place where "Text you want to appear as a link" should actually say all of this:

{A HREF=}Text you want to appear as a link{/A}

Except for that "{" should be replaced with "<" and "}"should be replaced with ">"

RE: Northwest/American Possible Merger?

Sun Jul 02, 2000 11:08 pm

I think the reason AA wants to get this done by mid-July and prior to DOJ review of UA/US is because they will both be reviewed with the same "fairness" and force regulators to rule one in the same with both mergers, either approve or deny.

AA executives were blunt in the article saying that whether they actually wanted NW or not was not even an issue or not, they needed NW to compete with UA/US.

Julius Maldutis, an airline analyst with CIBC World Markets feels that these mergers can create more opportunities for startups because the consilidation will create areas with lack of service. He is right.

The two sides are $10/share off which I think the final price for NW will be $61/share, $6.1 Billion plus $3.3 billion in debt for a $9.4 billion deal, cheaper than US. AA has been negotiating with pilots for their approval of this proposed deal - VERY IMPORTANT.

Finally, I think that if the merger is announced, they will announce divestures like US/UA. I think some Tokyo slots will be available among other consolations.

RE: Northwest/American Possible Merger?

Sun Jul 02, 2000 11:53 pm

Hey, I'm all for it as a DTW resident. I would love to see silver 747s flying overhead. Although if they merged, AA would [probably] come up with a new scheme.

Posts: 5370
Joined: Mon Oct 18, 1999 3:09 am

RE: Northwest/American Possible Merger?

Mon Jul 03, 2000 2:59 am

as DFW being my home airport, I surely would not mind seeing more 747's,and A-320's, but honestly i hope this does go through since NW and AA lack in each other's market but i do not think AA or NW should have any press release's about a merger since the government may not award (what the airline will be called if AA and NW merge)the china slots. So i think that they should wait to see who gets the china slots then merge.

Give me a break, I created this username when I was a kid...

Merger Imminent!

Mon Jul 03, 2000 3:30 am


MR Wants to Announce Northwest Merger This Month, Paper Says

Bloomberg News
Jul 2 2000 1:55PM

Fort Worth, Texas, July 2 (Bloomberg) -- AMR Corp. and Northwest Airlines Corp. are making progress in merger talks, and an agreement could be reached this month, the Fort Worth Star-Telegram reported. People close to the negotiations said AMR officials would like to announce an agreement by mid-July, when the
U.S. Justice Department is set to review the proposed $11.6 billion acquisition of US Airways Group Inc. by UAL Corp.'s United Airlines. AMR, parent of American Airlines, values Northwest at about $56 a share, though Northwest Chairman Gary Wilson is seeking at least $65, the people told the newspaper.

Analysts have said American can't afford to let the United-US Airways merger proceed without a response because that combination would make American -- the world's second-biggest carrier after United -- less competitive.

(Fort Worth Star-Telegram 7/1 1A)

Posts: 221
Joined: Tue Jun 01, 1999 6:26 am

RE: Merger Imminent!

Mon Jul 03, 2000 4:09 am

What about Delta? Are they planning on merging with some airline? Maybe Continental?


RE: Merger Imminent!

Mon Jul 03, 2000 5:12 am

Can someone tell me where AA's hub cities are? Just wondering if they do merge if that will end the MSP hub.
Posts: 4251
Joined: Thu Feb 17, 2000 9:58 am

RE: Northwest/American Possible Merger?

Mon Jul 03, 2000 5:41 am

AAs hubs, both major and minor, are at Dallas (DFW), Chicago O'Hare, Miami, San Juan, San Jose, Boston, and New York JFK. So the only hub close to MSP is ORD but MSP wouldn't shut down anyway because ORD is really crowded and can't handle MSPs (or Detriots, for that matter!) flights.

Aaron G.

RE: Northwest/American Possible Merger?

Mon Jul 03, 2000 7:35 am

SV11, AA met with DL in June to "discuss" the situation in the airline industry (mergers). One specific item discussed was NW's stake in CO and how to divest that interest to pave the way for DL and CO to merge.

Blink, I don't think that the DOT will justify not awarding China rights to AA because they are merging. They may be awarded on a condition that if the merger were approved, then the 2nd runner up would get these rights. The DOT will also likely not be involved in the merger discussions and should proceed with business as usual until any merger is approved by the DOJ before they decide to determine who gets what until that time. Also, DFW would be unlikely to see any other NW planes than they do now, it will be a while before any of the operations would be fully integrated and you would see NW 747's at DFW.

RE: Merger Imminent!

Mon Jul 03, 2000 8:03 am

I have a 100% feeling that AA/NW will keep MSP since ORD is very crowded and they can beat united not through ORD but MSP I am not sure about detroit,I have a feeling it may get a little smaller but other than that, it will probably stay the same.
Posts: 894
Joined: Thu Jun 03, 1999 12:38 pm

It Will Be AA, Right?

Mon Jul 03, 2000 1:57 pm

The logical conclusion is that the American Airlines brand will stay and Northwest will disappear...

Is that what we're looking at right now?
Posts: 511
Joined: Wed Jun 14, 2000 11:31 pm

RE: Northwest/American Possible Merger?

Mon Jul 03, 2000 2:11 pm

There are those people who would like to see this merger go through, and then there are those of US who pray the merger between United and USAirways is prohibited. I personally thought the days of airline consolidation were way behind us...if only that were true. I remember when some of us wanted Republic to stay seperate. Anyways...after 14 or 15 years, I've grown to love the color red. I just wish the same could be said for silver. If American were to acquire Northwest, they would inevitably pay an extremely high asking price for stocks and what-not, and assume a debt of about $400 million to the State of Minnesota in order to pull out of Minneapolis. The best bet would be for American to keep the Minneapolis and Detroit hubs open, thereby allowing them to pull in flights on either side of Chicago (all the while keeping their presence at ORD). It would take American a considerable amount of time to fully digest Northwest's fleet and employees and readjust senority levels (who would be higher...Northwest's senior pilot or American's? and what would happen to the one whose seniority was considerable at the other airline, but not quite so after the merger?). As I've stated before, I don't know what to make of this possible merger. I can see why people would like it to happen, and I can see the negative fallout from it occuring. I, for one, am nostalgic...I grew up seeing the Red-Tail, and I'd like to grow old doing so...its just part of who I am.

Aviation is proof that, given the will, we have the capacity to achieve the impossible.

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