Does anyone know what will happen to the Memphis-Hub since it's the closest hub to DL's home base ATL?
Same thing that will happen at CVG as neither airline will want to lose a high margin market. Unless new competition enters the market and can be sustained, look for fares to go higher.
Folks, let's get this discussion back on track please. This is about NW's marriage with DL. Discussions on SW related to the merger should be kept in the SW forum.
Does anyone know what will happen to the Memphis-Hub since it's the closest hub to DL's home base ATL?
Of course, that will be in the secret phase II of the takeover, and I think it is a safe bet that the MEM hub will pay a heavy price for the DL takeover. Those who stick to the party line will tell you that in the official plan, they say they are going to keep all of their hubs. Of course the official plan is just a facade to pull the wool over the eyes of the DOJ to try to slither their way to approval of the takeover. For those who assert that MEM will not be impacted severely, I have a certain bridge I'd like to talk to you about selling.
I really like flying through MEM, so I feel you pain on its probable fate.
Does anyone know what will happen to the Memphis-Hub since it's the closest hub to DL's home base ATL?
Does ATL have the ability to absorb MEM traffic? I know MEM isn't the biggest hub around, but isn't ATL now the busiest airport? It can be a real mess flying in and out of ATL. I'm not bashing ATL, but throw a little weather in there and we're all having a great time looking at each other.
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According to a report by the Atlanta Journal-Constituition (http://www.ajc.com/business/content/...jobs_0424.html), the proposed merger will cut 1,000 HQ jobs and result in savings of $1 billion through the cuts and combined operations.
With the recent combined 1Q loss of >$10 billion, of which ~ $0.5 billion derives from operations, no write-downs in good-will and capital, it seems pretty clear that the rationale for this merger depends entirely on the ability of the merged company to exercise oligopolistic market power to force prices above competitive levels.
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1,000 jobs at HQ.... thats not just HQ, thats gotta include OPS, In-Flight, NWA.com, Worldperks, call centers, etc.
Based upon MY personal experiences, an estimation for cutting all WorldPerks Staff at HQ would result in ~$1-2M salary savings per year, excluding benefits, etc. Thats not really that much considering they hope to save $1B thru "HQ" cuts.
Quote:
Originally Posted by bstreeter
According to a report by the Atlanta Journal-Constituition (http://www.ajc.com/business/content/...jobs_0424.html), the proposed merger will cut 1,000 HQ jobs and result in savings of $1 billion through the cuts and combined operations.
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Does ATL have the ability to absorb MEM traffic? I know MEM isn't the biggest hub around, but isn't ATL now the busiest airport? It can be a real mess flying in and out of ATL. I'm not bashing ATL, but throw a little weather in there and we're all having a great time looking at each other.
Here's a thought. Downsize ATL and route most people through MEM. That way, more people would have access to Jim Neely's Interstate BBQ.
Dave
1,000 jobs at HQ.... thats not just HQ, thats gotta include OPS, In-Flight, NWA.com, Worldperks, call centers, etc.
Based upon MY personal experiences, an estimation for cutting all WorldPerks Staff at HQ would result in ~$1-2M salary savings per year, excluding benefits, etc. Thats not really that much considering they hope to save $1B thru "HQ" cuts.
The 1000 figure is meaningless and completely disconnected from the need to cut $0.5B, unless everyone at HQ earns on average $500K.
Anyone watch the House hearing on the DL/NW merger today? I was in Rayburn on other business but walked by the hearing room, it looked packed and I saw that they filled at least one other overflow room.
As the cost of fuel increases the cost of transportation, the US Domestic "volume" market model will come under increasing pressure; fewer people will be able to fly planes at the new prices as if they were cheap Greyhound buses.
If NW is already #5 on the list, and the writing on the wall says that the only way forward is to decrease capacity and to shrink, then maybe a merger does make good sense?
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Quote:
Originally Posted by Klm is Dead - Long Live KLM
People are not flying so much anymore?
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If NW is already #5 on the list, and the writing on the wall says that the only way forward is to decrease capacity and to shrink, then maybe a merger does make good sense?
Why do you have to have a merger to decrease capacity and to shrink?
Why do you have to have a merger to decrease capacity and to shrink?
Maybe they don't want to shrink but want to have the other guy have to?
The don't operate alone but in a market filled with other players.
Governed by game theory that doesn't now allow them to charge the prices they must.
If demand shrinks, the industry has to shrink. Not necessarily the individual carriers. If NW voluntarily shrinks and others stay the same, that could be a problem.
NW could go from say #5, shrink, and stay at #5.
Or they could go from #5, shrink, and wind up #10 as others shrink less.
Or they could go from #5, shrink, and then ex- or implode and be #0.
If is difficult to imagine them going from #5, shrinking and then becoming #1, although anything is possible it isn't probable...
Being a leader in such a consolidation step, they could avoid shrinking at all and let other weaker and/or slower to consolidate players be the ones to shrink.
HOLY SMOKES! WE HAVE GOAT RUSTLERS IN THE COUNTY!!!
