Site Admin

Joined: 17 Jun 2005
Posts: 949
Location: Carmel, IN

OK, we really haven't discussed this here much. And I suppose I could have posted it on the NW forum, but here it is.

Airport Business: Northwest, Delta closing in on merger deal

So here are the issues I'm most interested to find out.

1. Aircraft - Delta must replace their MD-80s very soon. Northwest must replace their DC-9s very soon. What will end up replacing all these?

2. Hubs - I'm guessing CVG will be dehubbed and become a heavy focus city, like what US did at PIT. They've been struggling with profitability out of CVG for a while, but needed that midwest hub as a reliever to ATL. Now they have DTW in the network to fill that gap, and it's a much better o&d than CVG anyway.

I'm also guessing MEM might be on the dehubbing list. NW has never made a great go of that hub, and the terminal needs a massive upgrade to remain competitive, so it will probably be de-emphasized and become a focus city as well.

IND - I think they'll keep IND as a focus city, since it's primarily run with Pinnacle service anyway, and it's a very low-cost operation that helps them strategically. It might negatively impact, however, any slim chance IND every had of getting n/s Europe service.

After DTW and ATL, which would obviously remain intact, I think JFK, MSP and LAX also remain as is. SLC might be interesting, as it could be unnecessary with MSP in the mix. Also, expect service at SEA and MCO to get beefed up.

3. The Name. Both airlines are old, proud names. If the deal is structured as a DL acquisition, which it looks like it is shaping up to be, then the DL name will remain. That would be a shame, since Northwest Orient is about as prestigious as name as Pan Am in U.S. aviation history. But there's not much else that could be done.

4. The Golden Share in CO. Of course, everything I've read suggests that an acquisition of NW gives CO the right to buy back the golden share from NW for $100. That would open the door for a UA takeover of CO, which will then start another thread on this board...in the UA forum.

What do you think?

Site Admin

Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

I don't think they will scale back anywhere. I think this move is strictly anti-competitive. They won't weaken themselves by cutting back and allowing LCCs to move in and take over. If they do start cutting back you can bet it will be to the delight of Southwest, Frontier, AirTran, jetBlue, Virgin America, etc. What you see in IND is an example of what will happen. NW keeps its service up here which keeps the LCCs from being able to really take off. IND has been a great case study when it comes to that.

Member

Joined: 15 May 2006
Posts: 728
Location: West Lafayette, IN

Wow, this merger makes me nervous. I foresee the ensuing shake up being a bumpy ride.

MEM would probably be axed, CVG scaled way back, SLC they will probably keep because of the connecting pax throughout the norhtwest, like Montana, Idaho, etc.

I bet IND would stay focus, but like you said Boofer, that would shut any door to European service, at least from an American carrier anyway.

In my opinion, I would hate to see the Northwest name disappear, that would be very sad.

Member

Joined: 14 Jun 2006
Posts: 142
Location: IND

CVG is the most expensive city in the U.S. to fly out of. Delta makes money there. They will not pull out of there.