Delta, the Giant Airline

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Just days after the Delta takeover of Northwest airlines was approved, It rolled out it’s new management team. This gigantic merger was approved quickly, but will it all go smoothly? there is a lot at stake here, and it will take time.

It could take a year or two before the two airlines are entirely merged. As the carriers combine gates at every airport they share, more empty gates will bring less revenue to airports at a time when they need more. Some airport facilities, like snack bars or stores, will see less business. They may be closed, along with the jobs they provided. All small businesses who depend on either carrier of most of their revenue might get a smaller slice, if any.

A Boeing 747, the largest airplane in the Northwest fleet, will be the first to be repainted in Delta colors. How long will it take to integrate all the Northwest pilots, which opposed the merger?, and will they have to take a pay cut? As the loser in this merger, it may be the Northwest employees who will get laid off.

What will happen with overlapping hubs? will they be downsized or shut down. The Northwest Memphis hub has always competed with Delta’s fortress hub in Atlanta for southern traffic. The Northwest hub in Detroit competes with Delta’s in Cincinatti for eastern traffic. Delta’s western hub in Salt Lake is probably safe. In a surprise move, Delta announced new service from both Pittsburgh and Raleigh-Durham to Paris. This is welcome news in Pittsburgh, which had a big cutback by USAirways.

Fares will probably go up where Delta now has a monopoly, but it may be the discount airlines who benefit. Southwest airlines, which has a long history of moving in when others cut back or move out, has already announced it will start Chicago Midway to Minneapolis service in March of 2009, charging much lower fares than Northwest. And JetBlue had been kept out of Atlanta, that might change. Air Tran has been increasing service in Milwaukee, about halfway between the Northwest hubs of Detroit and Minneapolis. The turbulence will continue.

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