bocastephen

Of course...that's why it would be a hard negotiation. What's more important to Delta - a few of their 777s and 764s or sitting back while CO becomes the mean bas...rd stepchild of Skyteam, throwing their happy merger plans into uncertainty.

Option 2 - if CO takes AS, and becomes the new hub owner of SEA, given Boeing and CO share a very close relationship, Boeing might be able to swing some 777s in CO's direction, to make up for the 787 delay. I'm sure there are some revenue-distressed carriers floating around who wouldn't mind deferring delivery of their new 777s, which Boeing could arrange for preferred lease terms on pending the arrival of the 787s.

If UA and US end up joining, I'd think its worthwhile to push the DOT and make UA release their SEA-NRT route as a concession, for allowing the largest airline merger in history to pass muster. This could free up the need to press NW for the concession, especially if CO stays in ST after all.

JC1120

well, remember it is the fine journalistic piece known as the Chronicle we're talking about here . The ppl writing these articles don't understand the airline industry and probably don't know who's a real rival and who's not. They're two airlines and therefore in theory they are competitors.

rkkwan

Of course DLNW won't give up their 777s! I have heard of government anti-trust forcing airlines to give up routes or slots, but I have never heard of forcing an airline to give up their aircrafts.

Plus, if DLNW feels it needs to shrink its longhaul fleet, it'll get rid of NW's 744 instead!

bocastephen

The aircraft give-up would be voluntary, not government enforced. Kind of a 'good-bye' parting gift from Skyteam. If DL won't give the 777s, they should hand over some 764s, and then NW should hand over some options on their 787s.

This all assumes that CO will be asked to leave ST - if we stay in the party, then it would depend on UA grabbing US and CO grabbing AS before AA gets them.

That's a real concern - if UA and US connect and AA grabs AS (they already codeshare and integrate well), then who does that leave us with? Midwest Express, Allegiant or ASA? Hawaiian?

CODC10

Excellent point. So valid, methinks it has already happened!

I could see this becoming a reality in the not-so-distant future. However, I doubt any pax carrier will be interested in those old dogs, some of the first 744s delivered. I'm sure these ships are already earmarked for BCF jobs...

rkkwan

I won't worry about either. US/UA... Hahaha. I think tying two sinking ships together will make them sink faster, not float.

AA/AS? Well, how many West Coast airlines do AA have to buy and lose before they learn a lesson? AirCal in the 1980's, Reno in the 1990's and Alaska in the 2000's? Let them throw away their money if they insist.

bocastephen

Perhaps true, but not our problem. Actually if they do sink, especially given Parker's unique skills at integrating merged carriers, then we can pick off the pieces at fire-sale prices.

Maybe they did or didn't learn their lesson, but if they go for another shot, we could lose our only remaining logical merger partner.

CO 1E

Why would DL even consider giving up any 777's to CO when it would do nothing but enhance CO's ability to compete with DLNW?

bocastephen

If DLNW wants CO to leave ST quietly, and not have CO try and hold up the merger with regulators...

It's up to them which option is more or less palatable - strengthen a worthy competitor or run the risk of the entire plan becoming unglued, and the considerable expenses associated with unwinding a ready-to-go merger.

CO 1E

I would think that they will be phased down to focus cities, or overtly de-hubbed a year or so after the merger is concluded. I take the "keep all hubs" assertion to mean only that no hubs will be shut down as part of the merger, leaving DLNW free to close a hub or two based on redundancies after the merger has concluded.

CO 1E

I see - just a quid pro quo for CO exiting ST without quarrel. I still doubt that will be necessary, however, unless for some reason UACO does not go forward.

bocastephen

That's the focus on my comments this afternoon, after reading about UA talking to US about connecting. If CO/US doesn't happen, I'd want CO to take AS for west coast coverage, and a hub at SEA they could use for Asia expansion and west-coast->Europe flights. They'd need the aircraft from somewhere (like DL, or Boeing) to do those Seattle runs.

pbarnette

I think DLNW could care less about how quietly CO leaves ST. I mean, what exactly are they going to do?

As for CO holding up the merger with regulators... Either the regulators are going to raise a stink or they are not. What CO has to say about it will be a minor issue.

bocastephen

Regulators tend to hold up mergers when industry members complain and file briefs about loss of competition, impact to consumers, etc. Recall the fracas over the CO/NW codeshare arrangement when it was first announced and the regulatory review that could have scuttled it.

What could CO do? I'd think lots - lawsuits, damaging competitive responses, try to grab other ST members away to form a new alliance. Corporations are capable of throwing very effective tantrums.

Mr.Nuke

At that point CO is essentially wasting money that could be better spent elsewhere. Realistically we have two scenarios: CO merges with UA and joins *A, CO merges with someone else or stands alone and leaves skyteam. CO is now the odd man out in skyteam. It makes little sense for them to kick and scream. Get out and go forward as a company. it isn't a matter if DL/NW AF/KLM et. al, what CO to leave skyteam quietly, CO SHOULD leave skyteam quietly.