NW has delivered a mostly rotten product in recent years, but the management knows what's going on -- has seen it coming for a long time -- and positioned the airline as an acquisition target, pure and simple. The NW proposition is hardly marketed, barely branded, and unhappily staffed, but in this strategy none of that matters. (Management has known for a long time that the Northwest brand would go away anyway, so there was no point in investing in it. They even re-schemed the airplanes in a mostly naked, exposed-silver style that would be quick and easy to repaint for a new operator.) What matters is Asia, a couple of fortress hubs, some high-yield captive routes in the midwest, and a smattering of useful aircraft (e.g. the A330s). That's what NW boils down to after all these decades... in a harsh but clear-eyed assessment.
Your position only makes sense if you can demonstrate that at least one other carrier has done better than NW in every category you mention above. I have no doubt some carriers have done better than NW in some categories, but, let's be blunt, is the USAir or DL or UA or AA brand significantly better than NW's?
The sad statement is not how good or bad NW is, but rather how it does relative to other airlines. It is in this context that I find your comments reasonably severe.
NW has adapted well to the markets it serves, in which passengers are unlikely to fly very long distances. Resources are not infinite, and NW does not do everything well. One could argue that NW's market strenght has allowed it to get away with older planes and diminished inflight amenities, but that's the nature of the market they serve. (To make an analogy - purposely exaggerated to illustrate my point: do you really need leather seats in your car if you only drive 15 minutes a day and have a finite budget?) One could also argue that, because it relies more than others on connecting traffic, NW has had to develop and rely on very efficient hubs - which have become a strong point from a repeat customer perspective.
In the end, it remains a personal choice to prefer IFE on domestic flights and a connection via JFK or CDG over no IFE but connections via DTW or AMS. Or an old DC9 with what one could perceive as so-so service, over an RJ with what one could perceive as great service - I insist on using the word "perceive" because service is a matter of perceptions.
We have now reached the end of this phase where passengers get Wal-Mart prices but 5th Avenue service, and they - particularly the leisure traveler - will have to realize that this is no longer a tenable proposition.
The merger itself, if done right, could allow management to cherry-pick the best of both worlds, with a result that would be truly fantastic. However, while it is easy to argue that FFlyers do not always make rational decisions, it is equally easy to argue that management does not always make rational decisions either - or at the very least is not transparent about how it reaches apparently irrational decisions. This lack of transparency is, at the moment, casting a real shadow on the prospects of the merger, one that is not only acknowledged by passengers but by investors as well considering that both stocks have not done particularly well since the announcement.
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Quote:
Originally Posted by ClipperDelta
The DL/US deal never got to the DOJ - Parker was simply outmanuvered by Grinstein's full-on assault through employees, public officials, customers, etc., that it put enough doubt and fear in the creditors' minds that they turned down US's offer. .
Yes this proves my point - there is a political element to these merger decisions and under the right circumstances some good old fashioned political horsetrading (including congress) goes on, i.e. informal approval/disapproval.
We all know that Delta spurned USairways for whatever reason, although with Delta's current market capitalization that, what was it $ 15 billion LCC offer?, looks pretty good in hindsight.
We all know that Delta spurned USairways for whatever reason, although with Delta's current market capitalization that, what was it $ 15 billion LCC offer?, looks pretty good in hindsight.
For the short term investor? Long term, I can't see hitching your ride to US as being a good thing.
NW has delivered a mostly rotten product in recent years, but the management knows what's going on -- has seen it coming for a long time -- and positioned the airline as an acquisition target, pure and simple. The NW proposition is hardly marketed, barely branded, and unhappily staffed, but in this strategy none of that matters. (Management has known for a long time that the Northwest brand would go away anyway, so there was no point in investing in it. They even re-schemed the airplanes in a mostly naked, exposed-silver style that would be quick and easy to repaint for a new operator.) What matters is Asia, a couple of fortress hubs, some high-yield captive routes in the midwest, and a smattering of useful aircraft (e.g. the A330s). That's what NW boils down to after all these decades... in a harsh but clear-eyed assessment.
The new NW livery is not exposed aluminum (like AA), it is painted. They reduced the number of colors and simplified the design to save money, but it is indeed painted.
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Quote:
Originally Posted by motytrah
For the short term investor? Long term, I can't see hitching your ride to US as being a good thing.
For the long-term investor, I can't see hitching your ride to any airline stock as a good thing. It is an absolute dog of an industry, and anyone who invests in it deserves to lose their shirt.
DL did a major disservice to their shareholders to turn down the overly-generous US offer - it is the most money they will get for those shares for at least the next 10-20 years.
DL did a major disservice to their shareholders to turn down the overly-generous US offer - it is the most money they will get for those shares for at least the next 10-20 years.
I'll stand with the Delta BoD on this one. US' ~$10 billion offer was half cash, half stock. LCC was about $60/share in early January 2007 (when US sweetened the offer); today it closed at $8.59, propped up by little more than hope for a deal with UA. So, in effect, Delta turned down an offer worth $5.7 Billion today.
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Quote:
Originally Posted by 3Cforme
I'll stand with the Delta BoD on this one. US' ~$10 billion offer was half cash, half stock. LCC was about $60/share in early January 2007 (when US sweetened the offer); today it closed at $8.59, propped up by little more than hope for a deal with UA. So, in effect, Delta turned down an offer worth $5.7 Billion today.
That $5.7B is still around $2.4B more than DL is worth today. I'd still take it and invest in an industry where I might actually make money. Then again, I would never have adopted a buy-and-hold strategy with DL stock.
Your position only makes sense if you can demonstrate that at least one other carrier has done better than NW in every category you mention above. I have no doubt some carriers have done better than NW in some categories, but, let's be blunt, is the USAir or DL or UA or AA brand significantly better than NW's?
I have no doubt some carriers have done better than NW in some categories, but, let's be blunt, is the USAir or DL or UA or AA brand significantly better than NW's?
USAir, no. DL, UA and AA, yes. You didn't mention CO; the CO brand is dramatically better than NW.
Quote:
Originally Posted by LBJ
The new NW livery is not exposed aluminum (like AA), it is painted. They reduced the number of colors and simplified the design to save money, but it is indeed painted.
Silver paint versus naked aluminum -- moot point. The point is that the "new look" aircraft are so under-branded and generic-looking, they could be re-signed for a new operator almost overnight.
Not that most Northwest aircraft would survive a rigorous fleet-culling/normalization exercise anyway. DL ain't acquiring NW for its rich trove of DC9s (some nearly as old as Barack Obama) and grungy 757s.
__________________
Owing to heightened security you must comply with any crazy fake "regulation" we make up. Thank you sir.
USAir, no. DL, UA and AA, yes. You didn't mention CO; the CO brand is dramatically better than NW.
Silver paint versus naked aluminum -- moot point. The point is that the "new look" aircraft are so under-branded and generic-looking, they could be re-signed for a new operator almost overnight.
With the exception of CO, which has indeed carved out a very nice image for itself in the public mind - that is, in the minds of those lucky enough never to fly IAH-YYZ on an RJ - I personally would not be so categorical when it comes to branding.
This is doubly true if you want to include the color scheme of an airline. Is there anything so boring and uninventive as United's or Delta's color scheme? How many combinations of red, white and blue are possible? Short of Qantas and possibly NZ, what airline is truly original and distinctive in its livery?
When it comes to branding, NW has lost the perception battle fair and square, we can agree on this. Let's just wait to see how the rank and file at DL feels when both companies are merged; we can revisit the issue of reputation at that time.
It should be said that I've never personally had problems with service on NW and I find their TATL product (where I fly the bulk of my miles) to be quite excellent. But then again, YMMV... I recently flew with WestJet, perceived to be a much better airline than Air Canada, yet the actual level of service was unspectacular. Don't get me wrong, I don't particularly want to excuse bad service - it's out there and it's inexcusable - but I don't have any outrage left since I last connected through CDG on AF - a supposedly "premium" airline.
I could repeat the comments of colleagues on DL, but they are not my own experiences. Suffice it to say the consensus is not overwhelmingly positive. Maybe it is because the video with Deltalina had not yet been rolled out. My one experience with DL is neither good nor bad. Again, YMMV.
The comment regarding NW's fleet is accurate but punctual. NW is in the middle of its refleeting program. In 5 years from now, after a few changes in the logo and a new paint scheme, people will b*tch about DL's aging fleet of grungy 767s instead of NW's grungy fleet of DC9s. If you prefer to base your opinion of an airline on the worse possible aspect of their operation, you must have a field day with everyone's RJ or with anything related to ASA...
No doubt part of the motivation for this merger is to grab relatively new planes. A new "enhanced" fleet rationalization program will supply a good enough excuse to ditch anything they don't want.
Finally, I believe that several coats of wax are applied to AA's plane, for the same purpose as other airlines apply paint: to protect the bare metal.
With your consistent anti-NW positions, this blanket assertion doesn't surprise me. Just one example to prove it wrong. Supposedly one of the big things DL was interested in was the Asia routes, and the NW brand in Asia leaves the almost unknown DL brand in the dust.
With your consistent anti-NW positions, this blanket assertion doesn't surprise me. Just one example to prove it wrong. Supposedly one of the big things DL was interested in was the Asia routes, and the NW brand in Asia leaves the almost unknown DL brand in the dust.
While NW certainly has the most recognized brand of any US airline in Japan, the world is a bigger place and other US airlines, including DL, carry many, many more passengers.
Most brand surveys place AA and UA as the most recognized airline brands in the US. While sheer recognition ultimately has nothing to do with quality, consumer awards do. With that measure, CO would be the 'best' legacy carrier brand, hands down.
Quote:
Originally Posted by respectable_man
With the exception of CO, which has indeed carved out a very nice image for itself in the public mind - that is, in the minds of those lucky enough never to fly IAH-YYZ on an RJ - I personally would not be so categorical when it comes to branding.
This is doubly true if you want to include the color scheme of an airline. Is there anything so boring and uninventive as United's or Delta's color scheme? How many combinations of red, white and blue are possible? Short of Qantas and possibly NZ, what airline is truly original and distinctive in its livery?
When it comes to branding, NW has lost the perception battle fair and square, we can agree on this. Let's just wait to see how the rank and file at DL feels when both companies are merged; we can revisit the issue of reputation at that time.
By almost every possible measure, there is data and surveys to support that AA, CO, DL and UA brands have more recognition and a better perception of quality.
I personally find the NW brand and livery to be very good, but lets be honest, the colors on the side of the plane or the design of your ticket jacket really mean little.
Quote:
Originally Posted by respectable_man
It should be said that I've never personally had problems with service on NW and I find their TATL product (where I fly the bulk of my miles) to be quite excellent.
I don't think anyone would disagree. Most of my NW flying is to Asia, where I find the product, on the Airbus to be superior to UA or other US carriers.
Last edited by thezipper; May 1, 08 at 7:05 pm.
Reason: consecutive posts by OP
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Quote:
Originally Posted by sxf24
While sheer recognition ultimately has nothing to do with quality, consumer awards do. With that measure, CO would be the 'best' legacy carrier brand, hands down.
The problem lies in thinking that counts for something. CO may be the best, but they are still the best of a sorry lot. Air travel has become something that most endure. In an industry such as that, it is hard to trigger a flight to quality. CO may be better than everyone else, but they can't escape the fact that the product is not something that people are willing to pay more for.
