Posts Tagged ‘Northwest’

Northwest + Delta = Delta

Northwest + Delta = Delta

Today (Wednesday October 29th 2008), the Justice Department approved the merger between Delta Air Lines and Northwest Airlines. The merger will be the largest airline in world bringing down American Airlines to the second position.

The combined airline will be called Delta with headquarters at Atlanta and Chief Executive as Richard Anderson.

From CNN Money

After a six-month investigation, government lawyers concluded the
merger would likely drive down costs for consumers without curbing
The proposed merger “is likely to produce substantial and credible
efficiencies that will benefit U.S. consumers and is not likely to
substantially lessen competition,” the Justice Department said in a
statement issued by its Antitrust Division.
The merger should create cost savings by combining airport operations,
information technology and other efficiencies, ultimately driving down
prices for fliers, the regulators said.


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Earlier I had blogged about the use of PDAs/Cellphones as boarding passes. Delta Air Lines is starting to use this technology starting Tuesday June 17th 2008 at New York’s LaGuardia Airport. Passengers can now pull up the boarding pass with the bar code image on their mobile phones (web-enabled) and scan it at the security checkpoint and boarding gates.

Earlier, Continental Airlines and Northwest Airlines had launched the program at some of their airports.

Smart phones seem to keep finding new uses! Go Iphone, Blackberry, Palm, etc.
From Atlanta Journal Constitution

Atlanta-based Delta, like
Continental and Northwest, is working under a Transportation Security
Administration pilot program. The TSA will use handheld scanners to
read the electronic bar codes, which are similar to those on the back
of Georgia driver’s licenses. The electronic boarding pass will not be
available for Delta Shuttle passengers.”

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Recently, Delta Air Lines and Northwest Airlines said that “having different fleet allows them to run more efficiently”

There fleet differences (from my earlier post) –
DeltaBoeing 737, Boeing 757, Boeing 767, Boeing 777, MD-88, MD-90
NorthwestAirbus A319, Airbus A320, Airbus A330, Boeing 747, Boeing 757, Boeing 787 (in 2009), MD DC-9

Earlier, during the US Airways + Delta merger talks, then Delta CEO Gerald Grinstein told lawmakers, “You can screw up a lot of things in the airline industry, but you have to have fleet simplification”

Personally, I think the following are the advantages and disadvantages
Advantages (only one I can think of) –

  • If you have inspection problem with FAA for one fleet, you don’t have to cancel almost all of your flights 🙂

Disadvantages –

  • Training both cockpit/ground crew to serve different airplanes (hence huge training costs)
  • Every fleet can have different turn times, different boarding policies, different bag unloading policies, etc hence a total chaos.
  • Maintenance on different fleet means training people on different aircrafts
  • Overall, all problems tend to multiply with each additional fleet.
  • Unions might have problems for pilots on one side flying other planes and vice versa.

So, all I can say is Bon Chance on the fleet merger!!!

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There are a lot of people who make an airline “fly”, but probably the most important ones are the Pilots. No matter how anyone would debate on the the current technology, we all trust our lives to the pilots when we are in an aircraft. There is no airline in the world that can fly (literally) without its pilot.

Pilots and Unions
We all might have heard, pilots of almost all commercial airlines belong to some union.

Pilots and Seniority
Seniority is the most important thing for a pilot. It “determines the planes pilots fly, the schedule they fly, their base, the side of the cockpit they seat, their pay and other work conditions”.

Delta and Northwest Merger

Most of the mergers I have seen or read about, one of the pilot union seem to get more than the other’s union (depends on which airline has a bigger say or part in the “merger”). The seniority issue gets a little more complicated due its importance to a Pilot’s life after the merger.

Currently, Delta pilots might have a lot more incentives for the merger than Northwest (all from here) –
Delta Pilots get –

  • 3.5% equity in the merged carrier
  • 17% pay hike over the next four years
  • Higher contribution to their 401k pension plan
  • No furlough for the first 2 years after the deal closes

Northwest Pilots get –

  • No agreement, so no guaranteed stake, pay rise, etc.

The above looks one sided, but you have to understand, Delta pilots union agreed to the terms and support the merger whereas Northwest Pilots’ union did not.

Seniority issue has not been addressed yet and most likely will head to arbitration. If the merger goes through, most likely for a long time you will see the Northwest crew flying Northwest planes and Delta crew flying Delta planes.

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Delta Airlines has agreed to acquire Northwest Airlines for a $3.1 billion (stock deal). The merged airline would become the world’s largest airline.

Facts –

  • The new airline will be “Delta”
  • Headquartered in – Atlanta, Georgia
  • Chief Executive Officer – Richard Anderson (CEO of Delta)
  • No hubs are supposed to shut down (as expected)

Remaining Hurdles –

  • Shareholders of both Delta and Northwest need to approve the deal
  • Federal Antitrust regulators need to clear the deal
  • Northwest’s pilots will “aggressively oppose” the deal (since Delta Pilots seem to get more – 3.5% equity stake in the merged airline and a board seat under a new contract)

So who is next?

  • United + Continental
  • Continental + American
  • American + US Airways
  • American + Southwest 🙂
  • United + US Airways
  • United + Frontier
  • American + Alaskan
  • Continental+ Jetblue

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Since Delta Air Lines and Northwest Airlines are supposed to announce their merger next week, I thought I will do some research (all Delta numbers in blue and northwest in red) –

  • NameDelta Air Lines + Northwest Airlines = ? (Delta?)
  • Hubs – Atlanta, Salt Lake City, Cincinnati, JFK New York, Detroit, Minneapolis, Memphis, Narita Tokyo, Amsterdam
  • Focus Cities – Los Angeles (secondary hub), LaGuardia New York, Orlando, Logan Boston, Indianapolis, Honolulu, Seattle
  • Fleet Size – 451 (+52 orders) + 343(+25 orders) = 796 (+77 orders) (Not considering possible fleet reduction)
  • Fleet Type – Boeing 737, Boeing 757, Boeing 767, Boeing 777, MD-88, MD-90 + Airbus A319, Airbus A320, Airbus A330, Boeing 747, Boeing 757, Boeing 787 (in 2009), MD DC-9
  • Headquarters – Atlanta, Georgia + Eagan, Minnesota = Atlanta, Georgia (assuming, they keep one)
  • Frequent Flier Program – SkyMiles + WorldPerks = ?
  • Member Lounges – Crown Room Club + WorldClubs

All data from Wikipedia (Delta and Northwest)

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Delta Air Lines Inc. has reached a tentative contract agreement with its pilots. The disagreement earlier was a big impediment in the its merger plans with Northwest Airlines, Inc.. The agreement would increase Delta pilots’ salaries and also give them a stake in the merged carrier.

Next step? Pilots at Northwest have to agree on issues surrounding seniority.

The merger announcement is supposed to come next week.

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