DanTravels

An AA-NW merger would be maintenance and type-certification hell, though - their mainline fleets have almost no commonality at all. Both fly the 757-200 (ick), and that's it.

In fact, no merger option is pretty. DL-NW's just as bad as AA-NW, and the others aren't much better. UA is the only other one with 747s, US is the only other one with 330s, and CO is the only other one with 787s on order.

NW is the only major with zero 737s, 767s or 777s. Here's how the fleets line up - I've bolded things NW has in common with 'em:

AA: A300, MD82/83, 737-800, 757-200, 767-200/300, 777-200.
CO: 737-300/500/700/800/900, 757-200/300, 767-200/400, 777-200, 787*
DL: MD80/88, 737-800, 757-200, 767-300/400, 777-200
UA: A319/320, 737-300/500, 747-400, 757-200, 767-300, 777-200
US: A319/320/321, A330-200/300, A350-800*, 737-300/400, 757-200, 767-200
NW: A319/320, A330-200/300, 747-200/400, 757-200/300, DC-9, 787*

rwill11

nw has the oldest fleet and the 330s are leased. the only thing of any value are the asia rights Thats all AA is interested in. as far as chapt 7 if nw lost code shares with KLM CO and delta they would be toast in 3 months then aa would pick their bones. also NW showed their hand a few weeks ago and waved the golden shares card in UALs face offering to share the new China route. We all know where that went. Not matter how I look and all the different scenarios NW always comes out as the odd man out. maybe im the bad boy around here, but no matter how LOYAL you are to NW if you have plat status get a comp somewhere weather you use it or not, protect yourselves. this us and delta deal is looking good. It will lead to more mergers. These guys are money people and dont give a s8it about FF programs. Just how much money they can make by chopping out duplicity of routes and using 1 full plane on 1 route vs 2 half full planes on the same route.

DanTravels

Are you sure on fleet age? Last April's airsafe.com figures put NW's fleet age at 10.8 years, behind only Continental's 8.5, basically tied with US/HP, and ahead of United (11.7), Delta (13.1) and American (13.3) - and since then, NW has retired a bunch of DC-10s with an average age of 26 years. They've got a bunch of DC-9s that are something like 30 years old, so there have to be some seriously new planes balancing that out... do you have some current numbers?

Wildman

This must be gaining some traction, local MSP TV station just aired a story on the 10 PM news confirming high level talks between DL and NW on possible merger.

Maybe we will be able to UG on DL after all!

SchmutzigMSP

That report counted 10 DC-10s. With each having an average age of 26 years, that's 260 cumulative years on average that are now gone. I'm not sure if NW has taken 10 new A330-200/300s since April '06, but you are correct in that the overall average fleet age is significantly younger now.

Don't worry. rwill11 likes to stir the pot around here to get people riled up.

bk42

They are not, or at least the ones delivered so far are not. (straight from nwa.com)

dlen111

with all these new merger talks, there has got to be something we dont know about the industry, regarding mergers....

US/DL: imcompatible AC. what would happen to CLT? would PHL stick around or would it all go to JFK? do they have the gates at JFK? overlapping TATL routes, shuttles, no west coast or south american presence, etc????

NW/DL: again imcompatible AC. who wins the atl/mem fight (atl obvioulsy)? and then what about the three midwest hubs of DTW, CVG and MSP? still no SO.AM. presence of major significance.

then, the current order for AC. how do those contracts come into affect?

same with other airlines....

CO/UA: IAD vs EWR, or ORD vs CLE or boeing vs airbus? this to me is (except for fleet commonality) the best. kill IAD (or perhaps keep it for its direct flight to our capital).

keep CLE as an over flow for ORD and EWR. gain SFO and some LAX.

DEN and ORD would be great (perhaps a shift to CLE would help ORD). get rid off all 733's and 735's. keep the A320 family until ready for more boeings and then.... blast on with an all boeing fleet once again. try to pick one name that keeps both liveries alive and base the company with CO's management in iah.

its a huge mess no matter what marriage come out of these talks. they must know what they're thinking when thinking about these nutty mergers.

it seems the airline peeps are always the most ill advised people in the business world, based on past decissions, but i fear a wave of hasty and ill advised (and investor and gov't approved) mergers, will in the end, screw us all!

ClipperDelta

Actually, it's the unofficial Creditors Committee that has pushed DL to consider the US offer because the Unofficial group is made up of unsecured bondholders who have the most to gain from a cash deal (they could care less about the future of the company- all they want to do is take the cash and run). They also constitute only about $2.2 billion of the total pre-petition claims - about the same as DALPA - so they are not the most influential voice.
The Official Creditors Committee is the one that everyone is trying to woo - this one is made up of companies that have more of an interest in the medium to longer term future of the company. These include Boeing, Coke, Pratt & Whitney, the PBGC, DALPA, and some financial institutions (US Bancorp, Fidelity). These guys have not publicly made any statement about where they stand (except for DALPA of course). They see more risk in the US deal and have been slow to embrace Parker and his team; that's why Parker is now going for broke with this new bid.

If there is an NW/DL combination, the resutling entity's size will make the different AC type not that big of an issue. It's not that different from what AF and KL have going now - AF and KL's widebody fleet is only gradually beginning to be standardized after a few years of the merger while the narrowbody fleet is still as disparate as ever. As for hubs, CVG will probably be demoted to focus city or less - DL has actually not completed the renegotiating of the CVG terminal leases (deliberately?). MEM will be gone in favor of ATL obviously.
I disagree about no South American presence of major significance. DL has developed quite a network on the continent - it pretty much flies to all of the major cities there (SCL, EZE, GRU, GIG, LIM, UIO, GYE, CCS, BOG) as well as a hefty chunk of Central American/Mexican/Carribbean cities. DL is now already closing in on CO as the #2 US carrier to Latin America.

humanoid94

Its amazing how history in the airline industry repeats itself. This whole situation reminds me a lot of the bidding war between Texas International (who would after two bankruptcies become the CO we all know ) and Pan Am for National. Pan Am defeated Texas International but paid an outrageous price for it eventually leading to its own demise. (Although not before UA had raped them of their pacific and atlantic routes) I have a feeling that if US ends up paying 10-11 billion for DL we will see them in the bankruptcy court again when the next inevitable downturn in the industry occurs.

gpan

If a merger happens I would really prefer it to be NW+DL; it would add synergies while causing the least amount of disruption - they have already worked on reducing overlap capacity for years as part, and the networks actually complement each other..

murphy

It stands to reason that US raised their bid because of the meeting with Bethune. The big question is whether this new number comes because Bethune told them an increase would get the job done, or because they're worried and decided to make an offer DL couldn't refuse.

Either way, it sure seems like US is overpaying. On the other hand, Bethune ha already earned every dollar of his expensive consulting contract.

My initial reaction to the DL/NW talks was fairly dismissive, as combining two bankrupt companies is very difficult and expensive. However, there's a ton of private equity money looking for a home. So who knows.

jjlovecub

Yeah right! I flew DL last weekend and TPA to ATL there were 17 PMs on the upgrade standby list. Delta's upgrade % is no where near NWA. If you combine the 2 set of elites then upgrades will go way down.

dmitzel

Does anyone else really believe AA would de-hub ORD? While operationally this makes sense - much better runway layout at DTW - politically I don't see this happening. That, and Chicago is much deeper in origin/destination traffic. $$$ talks, irregardless of the operational nightmares that follow due to ORD congestion and intersecting runways.

I fear an AA-NWA combination would leave the Detroit midfield terminal largely abandoned, no matter how little sense doing so makes. MSP would be in the same boat. Unfortuately for those "down south," MEM dies no matter who the suitor is.

So what if AA's FC is superior, if your corp travel policy prohibits FC travel purchase, how are you going to use it? IMO NWA's best WP elite benefit is the unlimited, complementary, space-available UGs for all elite levels, not just EXPs. I hate the idea of burning miles or hording certs/coupons and working the phone/playing the CSR game to score an elusive UG.

Unless you have the budget (or approval) to purchase FC travel, I see an AA-NWA merger as a big loss to our FF benefits. Or, unless you regularly fly > 100K miles each year; those of us exclusively flying domestic will have a hard time doing so. With AA, most of our time will be spent in Y. <yuck>

Count yourself in the minority. I firmly believe those of us vested in the WP program, that fly < 100K miles a year are better served with a DL-NWA combination. That is, if remaining independent is no longer an option.

FWAAA

I agree with you and disagree with sany2. ORD would not be de-hubbed if AA buys NW. MEM would be abandoned and MSP and DTW would become smaller hubs/focus cities. Both cities would probably still have mainline flights to key business destinations but AA would probably not fly hundreds of connecting flights thru either city - preferring to connect them at ORD or DFW.

Don't forget that ORD (after decades of Daley Denial) is finally starting to build its own network of parallel runways. ORD-hell should get better in 10 years or so (maybe even sooner, if the ORD propaganda is believed).

One reason for the legacies' continuing financial trouble is the plethora of connecting hubs. Consolidation is gonna mean fewer of those hubs. Will LCCs move in to backfill abandoned areas? Sure they will. But they're growing very fast ANYWAY, regardless of whether legacies trim surplus hubs.

If AA were to buy NW, the motivation would be to gain NW's China and NRT access and to try to capture as many of the higher-yielding business travelers as it could. Status matching and mileage conversion is pretty good at doing that (ala TWA). The motivation for buying NW is certainly not to gain three more hubs. And if NW combines with DL, one can be certain that some of the hubs would disappear as well.

The country is awash in legacy connecting hubs - many more than are really needed. PIT and STL are the most recent cities to be largely de-hubbed, and even then, contract carriers maintain extensive RJ operations in both. PIT and STL were a good start, but there are many more superflous hubs that could use the same treatment. Sucks if you live in one of them and enjoy the extensive nonstop schedules, but that's what the future holds. Fewer hubs.

BearX220

You got that right. NW as a going concern has no stand-alone value, from a capital/asset standpoint or strategically, apart from the Asia network. (And even that asset's eroding as 787-style long, thin routes make the NRT hub less attractive.)

NW is a dog's breakfast of decrepit or leased aircraft, captive secondary-city hubs and hideous labor issues. If I were AA or DL or anybody, I wouldn't take it on.