UAL doesn't want NW
Sep 26, 2006, 3:36 pm
#1
Original Poster
Join Date: May 2004
Location: formerly Gold now Diamond, formerly MSY, now LAX, formerly NW, now DL
Programs: Hyatt Plat, Hilton Gold, SPG Gold, Delta Diamond/1MM
Posts: 4,635
UAL doesn't want NW
http://www.forbes.com/2006/09/25/ual...nes_newsletter
UAL would possibly merge with DL or CO.....granted NW overlaps a lot with UA
UAL would possibly merge with DL or CO.....granted NW overlaps a lot with UA
Sep 26, 2006, 4:22 pm
#2
Join Date: Apr 2001
Location: PIT/DFW/MEL; AA Exec. Platinum & 4MM, QF WP
Posts: 7,689
Originally Posted by NOLAnwGOLD
http://www.forbes.com/2006/09/25/ual...nes_newsletter
UAL would possibly merge with DL or CO.....granted NW overlaps a lot with UA
UAL would possibly merge with DL or CO.....granted NW overlaps a lot with UA
Sep 26, 2006, 6:10 pm
#3
Join Date: Jan 2004
Location: DCA
Posts: 3,395
There is absolutely no way a merger between NW and UA would be approved. What would that be? 80% of the Japanese market? The vast majority of the Asian market from US based airlines for certain. I am sure, though, that the new airline would be profitable...
Sep 26, 2006, 7:02 pm
#4
Join Date: Apr 2003
Location: Rochester Hills, MI
Programs: NW, MR SE,
Posts: 385
The above article and others have mentioned that UA merger with either CO or DL makes sense due to the minimum overlap of routes but there are other things that should also be considered such as fleet, unions (which DL doesn't really have), etc.
All of these merger talk is going on since people still feel there is too much capacity. If most of the airlines are flying at 85% load, how much higher will it be after another merger goes through and capacity reduced? Will the airlines be flying with 90+% load? Will the pax be willing to fly in a tin can filled to capacity?
I think we have had it too good with the airfare being so low compared to the prices of everything else. During the past 20 years, the home prices are up anywhere from 2x to 3x, grocery has gone up similar amount, gasoline (even at $2.15 which I spent on Sunday) is up at least twice. The airfare for a cross country trip is similar to what it was 20 years ago. If you tell me the airliines have been able to keep the fare low due to the increase of productivity and efficiency of the fleet, I think other industries have been forced to do similar process while increasing the prices. So why can't the airlines do the same? I can't accept the opinion of the pax being price sensitive since the load factor is at such a high level.
So let's forget about all the talk about merging any airlines and let them increase the fare to such a level to let them make some money and keep their workers happier than they are now.
HJ
All of these merger talk is going on since people still feel there is too much capacity. If most of the airlines are flying at 85% load, how much higher will it be after another merger goes through and capacity reduced? Will the airlines be flying with 90+% load? Will the pax be willing to fly in a tin can filled to capacity?
I think we have had it too good with the airfare being so low compared to the prices of everything else. During the past 20 years, the home prices are up anywhere from 2x to 3x, grocery has gone up similar amount, gasoline (even at $2.15 which I spent on Sunday) is up at least twice. The airfare for a cross country trip is similar to what it was 20 years ago. If you tell me the airliines have been able to keep the fare low due to the increase of productivity and efficiency of the fleet, I think other industries have been forced to do similar process while increasing the prices. So why can't the airlines do the same? I can't accept the opinion of the pax being price sensitive since the load factor is at such a high level.
So let's forget about all the talk about merging any airlines and let them increase the fare to such a level to let them make some money and keep their workers happier than they are now.
HJ
Sep 27, 2006, 6:04 pm
#5
Join Date: Apr 2001
Location: PIT/DFW/MEL; AA Exec. Platinum & 4MM, QF WP
Posts: 7,689
Originally Posted by humanoid94
There is absolutely no way a merger between NW and UA would be approved. What would that be? 80% of the Japanese market?
Sep 27, 2006, 8:13 pm
#6
Suspended
Join Date: Jan 2005
Location: seattle
Programs: UNITED 2K HILTON DIAMOND
Posts: 2,774
Originally Posted by martin33
it's not a roadblock. if it happened, such a deal would require significant divestment at NRT.
Sep 27, 2006, 10:07 pm
#7
Join Date: Jun 2006
Posts: 1,806
CO may not have the option of merging with anyone. NW holds the final say whether or CO can merge with anyone. If CO merging with anyone does not benefit NW...
Sep 27, 2006, 10:26 pm
#8
Suspended
Join Date: Aug 2003
Location: SEA
Posts: 12,485
Originally Posted by rwill11
and who would get the slots, could it be........CO? sometimes it takes a few years to make a good deal. NW might be the first step. UA might steal the goodies at a bargain and then sell off the junk. There goes the golden shares
Sep 27, 2006, 10:54 pm
#9
FlyerTalk Evangelist
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
NW has nothing that UA lacks. So why would UA buy/merge with NW?
NW's key valuable assets include its NRT operation. UA has that and most agree that there's no way one airline could combine the former NWA and Pan Am Tokyo ops.
The other valuable NW assets include its China access. UA already has that. And I doubt that the DOJ would permit (assuming the DOT did approve) one airline to own 85% of the USA-China frequencies.
UA doesn't need a hub at MEM. Doubt it needs one at DTW or MSP, either.
With Varig's near-death experience, one thing UA could use is S America. DL has some of that. Central America? CO is strong there.
Northeast USA? DL is strong there. NYC operation? CO owns EWR, and UA has basically abandoned JFK (except for p.s.).
UA merge with NW? Nope. Its strengths are duplicated by UA's current strengths. If UA joins with another airline, the other airline should have something UA doesn't already own.
NW's key valuable assets include its NRT operation. UA has that and most agree that there's no way one airline could combine the former NWA and Pan Am Tokyo ops.
The other valuable NW assets include its China access. UA already has that. And I doubt that the DOJ would permit (assuming the DOT did approve) one airline to own 85% of the USA-China frequencies.
UA doesn't need a hub at MEM. Doubt it needs one at DTW or MSP, either.
With Varig's near-death experience, one thing UA could use is S America. DL has some of that. Central America? CO is strong there.
Northeast USA? DL is strong there. NYC operation? CO owns EWR, and UA has basically abandoned JFK (except for p.s.).
UA merge with NW? Nope. Its strengths are duplicated by UA's current strengths. If UA joins with another airline, the other airline should have something UA doesn't already own.