AIRLINE:
I'd love to be the person in the middle trying to make
all this work. I'd love to be the one designing the
new route structures,
inner business strategies, eliminating duplication of
services.
I'd love to work in the business side of an airline,
but most everyone who has a business degree, says that
you just don't join an airline on day one and day two
become an expert. It takes time to learn how the
business works.
Mike Burris
Cambridge, Mass
--- Roger LaFrance <lafrance@xxxxxxxxxxx> wrote:
> US transport chief ponders Delta-Northwest merger
> By Lucy Hornby Tue Jan 10, 12:12 PM ET
>
>
> SHANGHAI (Reuters) -U.S. Transportation Secretary
> [input] [input] [input] Norman
Mineta
> ' name=c1> [input] SEARCH
> News | News Photos | Images | Web
> ' name=c3> Norman Mineta suggested on Tuesday that a
> merger between U.S. airlines Northwest Airlines
> (Other OTC:NWACQ - news) and Delta Air Lines (Other
> OTC:DALRQ - news) could result from the latest round
> of industry restructuring.
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> The U.S. airline industry has been battered by
> rising fuel costs, weak revenue and low-fare
> competition, leading some carriers, including Delta
> and Northwest, into bankruptcy.
> "I sometimes wonder whether or not ... Delta and
> Northwest will come out as a merged carrier," Mineta
> told an audience of business executives in Shanghai,
> adding he was just "thinking out loud."
> Representatives of Delta and Northwest declined to
> comment on Mineta's remarks. Both carriers said they
> were focused strictly on restructuring.
> Mineta said he expected carriers UAL Corp. (OTC
> BB:UALAQ.OB - news), parent of United Airlines Inc.,
> and Aloha Airlines to emerge from bankruptcy
> protection in February.
> Mineta is not the first industry expert to predict
> consolidation in the ailing airline industry. And
> analysts have speculated on the possibility of a
> Delta/Northwest merger.
> The two carriers, the third and fourth largest
> respectively in the United States, filed for
> bankruptcy on the same day in September.
> At the time, analysts noted that the two have
> little overlap in their domestic routes, a factor
> that makes a merger prospect enticing.
> Internationally, Delta has prominence on Atlantic
> routes, while Northwest has more flights to the
> Pacific region.
> However, the companies' mismatched aircraft fleets
> could pose innumerable problems for a combination.
> The two carriers operate a combined fleet of more
> than 1,200 aircraft. But the only aircraft model the
> two have in common is the Boeing 757, one analyst
> said.
> The two carriers also would need large amounts of
> exit financing and creative management to make a
> merger work, analysts have said. Some said Delta and
> Northwest may we seek mergers, but not with each
> other.
> At least one carrier is using a merger as a
> lifeline to stay in business. US Airways, which left
> bankruptcy last year, merged with America West to
> form a new carrier named US Airways Group (NYSE:LCC
> - news).
> "We're going to have to see consolidation ...
> right now we do have too many seats following too
> few passengers," Mineta said.
> Higher costs and lower plane utilization would
> continue to hobble airlines running 'hub-and-spoke'
> operations, he said. He noted that lower cost
> carriers like Southwest Airlines (NYSE:LUV - news)
> and Jet Blue had utilization rates of 78-82 percent,
> versus 45-48 percent for the hub-and-spoke carriers.
> "Until the remaining legacy carriers do something
> about extracting themselves from a hub-and-spoke
> operation, I'm not sure they are going to be very
> successful."
> Mineta, who toured Shanghai's new deepwater
> container port on Tuesday, cautioned that the United
> States should not become the "broken link" in moving
> goods and people.
> "American companies are expressing growing
> dissatisfaction over our ability to deliver products
> efficiently in and out of the U.S.," Mineta said.
> But he said rail companies were investing in
> trans-continental track at the expense of the "last
> mile," while land and track issues made it costly
> for the United States to even contemplate high-speed
> passenger rail.
> (Additional reporting by Kyle Peterson in Chicago
> and Paritosh Bansal in New York)
>
>
>
>
>
> Roger & Amanda La France
>
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