Programs: Delta Gold Medallion,AA,USairways,Midwest Airlines, National Emerald Club
Posts: 1,438
Quote:
Originally Posted by sxf24
. However, the level of cost savings and revenue enhancements required to make this merger viable can not be realized without moving to a single brand and operating certificate.
Oh, this is ridiculous, no other words for it. For example, my understanding is that tiny little Midwest is holding on to its Skyway operating certificate, for what purpose Lord knows.
For all intents the Skyway brand has ceased to exist, but Midwest for moment is maintaining it because it has value- the costs are mostly administrative and are neglible.
You are letting your fervor for the merger color your conclusions.
Oh, this is ridiculous, no other words for it. For example, my understanding is that tiny little Midwest is holding on to its Skyway operating certificate, for what purpose Lord knows.
For all intents the Skyway brand has ceased to exist, but Midwest for moment is maintaining it because it has value- the costs are mostly administrative and are neglible.
You are letting your fervor for the merger color your conclusions.
I think you misread and misinterpreted my statements.
The cost of operating two airlines under two operating certificates and operating one airline under one operating certificate but holding two operating certificates are clearly different.
The operating certificate itself is not the cost, but rather the staffing, procedural and administrative requirements for Part 121 operations.
If one looks at this objectively, DL does have a bigger and deeper global footprint - not only in Europe, but the Middle East, Africa, Caribbean, Central, and South America. Even in the U.S., DL does have broader coverage, only exceptions being of course the NW strongholds in the Midwest and to an extent, parts of the Pacific Northwest. I really don't want to get furhter into a p!ssing match about who is bigger where - suffice it to say that both have very strong #1 or #2 presence in many areas where the other is practically a non-entity...and that's why the complementary networks can only help.
We are, basically, in agreement because you state facts. I note that you have NOT argued that DL is the brand to keep because DL is larger.
Again, I would personally prefer a fresh start, allowing the new airline to offload whatever baggage its predecessors had collected and making it clear that the new entity is not an approximation of any of the previous two carriers.
Ray Neidl, an analyst at Calyon Securities, said that mergers could be “messy, time-consuming and, in many cases, disruptive of services.” If several occur simultaneously, “it could create, if not done properly, panic among the traveling public,” he said.
But, he added, “This industry is going to have to restructure one way or the other. It’s either going to restructure through the guidance of regulators and politicians through orderly mergers, or bankruptcy courts will take care of it.” He said that future bankruptcies would be “for real” and would involve liquidations.
The consumer advocate, Mark Cooper, director of research at the Consumer Federation of America, said that without new regulations, the merger would lead to “fewer choices, higher prices and crummier service.” But he said that those probably lay ahead even without a merger.
“It’s time for Congress to consider the proposition that this industry just does not work as an unregulated market,” he said.
And John D. Rockefeller IV, of West Virginia, chairman of the aviation subcommittee of the Commerce Committee, said, “I don’t discount myself entirely from consideration of re-regulation of the airline industry.”
KLM, no disrespect intended, but you really need to develop an ear for U.S. politics. About the only thing the good Senator would 'entirely discount <himself> from' is having *** with !!!!!!!. Or raising taxes on businesses, if he were a Republican. Smart Senators do not limit the scope of negotiation.
I like how that article quotes Consumer Federation of America. I know the person that was previously in charge of financial educational there. I also know that she failed finance in undergrad three times. I put little stock in what that organization says.
US surprises Europe with global airline ownership plan
U.S. Deputy Assistant Secretary of State for Transportation Affairs John Byerly said Washington had an open mind on Europe's long-standing demand to ease American restrictions on foreign ownership of U.S. airlines. The EU's chief negotiator said he was surprised by the U.S. proposal to broaden the liberalization talks.
Brussels wants to do away with U.S. federal laws that cap foreign control at 25 percent of the voting stock. Britain has threatened to exercise its right to tear up the first-stage agreement, which forced it to open lucrative routes from London's Heathrow Airport to more competition, unless the EU wins the right for Europeans to own or control U.S. airlines.
Washington acknowledged that letting Europeans own U.S. carriers could boost investment and competitiveness in the U.S. sector which has been hit by a wave of bankruptcies, Byerly said in a speech to the European Aviation Club.
"We approach with an open mind the expected European proposal to change U.S. laws that limit foreign ownership of U.S. carriers," Byerly said.
The road may be cleared very quickly for the creation of a global mega-carrier with a key role to be played by the former Northwest airlines.
This could certainly stir up the airline industry in the US! EU airlines sitting on cash (such as AF or LH) could make serious investments. The question is, how would that change the airline industry in the US?
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Quote:
Originally Posted by florin
This could certainly stir up the airline industry in the US! EU airlines sitting on cash (such as AF or LH) could make serious investments. The question is, how would that change the airline industry in the US?
While I think opening up the US airline industry is long overdue, I'm curious whether the EU airlines would find profits any easier to come by than the US carriers. Nonetheless, I would think there would be some interest from the likes of AF, LH, and BA. I wouldn't be shocked to see Ryanair or EasyJet make a go of it either.
The question, though, would be whether the EU airlines would invest in a legacy, an LCC, or start something up on their own.
Good point! LH (fairly) recently bought a 20% stake in JetBlue? On the other hand, AF seems to be set on legacy carriers (they bought KL, they had their eyes on AZ and were prepared to throw some cash at DLNW).
I'm not sure if any such investments would make any significant changes. The airline industry in the US is just too big. They can't all be bought, that's for sure, and I'm not sure that buying 1 or 2 airlines would be enough to make serious changes in such a competitive environment. I don't know...
PS: John Byerly said what he said, but utlimately, wouldn't this have to pass through Congress?
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Delta agreed to extend its existing collective bargaining agreement with its pilots through the end of 2012. The revised contract provides the Delta pilots a 3.5 percent equity stake in the new company.
In exchange, the company will be able to place the Delta code and brand on Northwest flights and retain Northwest’s large stake in Midwest Airlines, while maintaining the separate operational status of the two carriers. The scope clause of the Delta pilot contract could have prevented Delta from doing those things had it not been amended as part of the agreement that has now been ratified.
2. Practical green light from competition authorities
A proposal by Delta Air Lines (DAL.N: Quote, Profile, Research) to buy Northwest Airlines (NWA.N: Quote, Profile, Research) is likely to be approved by the U.S. government, an influential lawmaker on aviation affairs said on Wednesday.
Rep. John Mica, a Florida Republican and former chairman of the House of Representatives aviation subcommittee, told a hearing on the merger proposal the deal to create the world's biggest airline did not appear anti-competitive.
Mica said the industry faces enormous challenges and it was more likely than not that "this merger will be granted" by officials at the Justice and Transportation departments who are reviewing the potential impact on competition and service.
Antitrust and industry experts have said previously the Delta/Northwest proposal stood a good chance of winning regulatory approval.
Last edited by Klm is Dead - Long Live KLM; May 15, 08 at 8:30 am.
Programs: UA 2MM, DL 500k, SW CP, GP 1M, HH Gold, Miracle Fruit-su Club
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1. Wow. We've heard that the pilots' buy-in was/is a stumbling block to the merger... Is anyone else struck by seeing that DL putting its symbol on the codeshare falls under collective bargaining? Begs the question: What do NW ALPA (especially as it won't be NW's symbol on the codeshare) and both airlines' flight attendants have to say? Invites the question: What are some of the other bargaining items that might amaze lay folk?
2. Rep. Mica, R-FL, is now on the minority side. Only noted as what he says is not necessarily fact (anymore).
Embedded in 1. and 2.: "Many's the slip 'twixt cup and lip", unless extending the bargaining period to 2012 effectively swept ALL the rest of the pilots' issues. Still, there are those other three pesky bargaining groups.
1. Wow. We've heard that the pilots' buy-in was/is a stumbling block to the merger... Is anyone else struck by seeing that DL putting its symbol on the codeshare falls under collective bargaining?
Effectively, all NW flights will become DL flights operated by non-DL pilots, and this is certainly a huge collective bargaining issue.
I put little stock in what that organization says.
On the other hand, AF seems to be set on legacy carriers (they bought KL, they had their eyes on AZ and were prepared to throw some cash at DLNW).
