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Delta becomes the world's largest airline

Posted Oct 29 2008, 05:10 PM by Kim Peterson
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Say goodbye to another airline, now that the Justice Department has approved Delta's $2.6 billion purchase of Northwest Airlines. And that's not a bad thing, given the miserable state of the airline industry these days.

The merger will produce the world's largest airline, which will continue to be called Delta. Northwest shareholders will get 1.25 Delta shares for each share they own in the all-stock deal.

Even though the companies have been meticulously planning the marriage, it'll still take up to three years to integrate them. There will be a bit of culture clash at first, particularly since Delta is mostly non-union (except for its pilots) and Northwest is unionized.

Former Delta workers bemoaned what's happened to their company, [readmore] telling one paper that Delta used to be a family-oriented place that people stayed at forever. "It took an act of Congress to get hired and an act of God to get fired," said one former executive.

But the world's largest airline will have to be more disciplined than that, particularly with the spiraling economy. Oil prices have skyrocketed, and consumers and businesses are cutting back on travel expenses. Even with the best of planning, merging two giants in these tough times will be a major challenge.

The combined company will have $35 billion in sales, 800 planes and 75,000 employees, according to the Wall Street Journal.

The merger was widely expected. The airlines didn't overlap many routes, so there weren't huge antitrust concerns.

The share prices of both companies didn't move much today. Delta dropped 2% to close at $7.99, and Northwest rose 1% to close at $9.90. Northwest shares are up 3% in after-hours trading, however.

Related reading:

Can the legacy airlines win back customers?

Don't bother with the airlines

Merging in the friendly skies

Chapter 11 could hit airlines seeking mergers

Delta donks the deal

 

Comments

 

my mom has worked with delta for 25 years and delta has been apart of my life since i was born Gas was costing more than twice as much on every flight than they actually made on every flight so what were they supposed to do....file for bankrupcy again?Its business and when times get bad...big decisions need to be made...You can have your opinions thats great...but also look at it from the other side...and seriously...give me a break...yea flying is expensive...but if your going to *** about it...DRIVE YOUR CAR! my mom used to love her job up until now..when all customers do now is *** and yell at the workers who cant do anything about the cost of flying....so if you cant afford to fly then DONT if you do fly be respectful to the people who serve you. its common courtesy..

I worked for Northwest, now I work for Delta.  I'm happy about the merger, and I don't have to worry about losing my job.  Good pay so my family can have a nice house, no foreclosure here.  I get really affordable health care.  

I fly often, on airplanes that is. I tried Delta once to Moscow, not good, Aeroflot is vastly superior. I had thought that being a US airline with a big name, Delta would be a nice flight, was I ever wrong! I fly NWA frequently, they are far superior to Delta, in all aspects. All this merger will do is hurt NWA's service, this has to be a joke! Anyone got a bicycle and rowboat?

Say goodbye to Minnesota, Detroit, and Memphis jobs, to one of the oldest Orient carriers, and a great airline.  Say hello to the heavy tax that the Minnesota state government will be hitting delta with if they remove MSP as a hub, and the loans the will make delta repay immediately.  Of course delta won't stand for this, so we can all imagine who is going to help pay for that........Can you say a raise in luggage prices.  I will be flying United from now on thank you!

RIP NWA.  

SKYMAN

As for Ticket Prices.......They should have been much higher long ago!  Everyone is comfortable with the low fares.  Its time the price was much higher and the public should pay their fair share.  Its about time the company raises ticket prices to pay for fuel...rather than cut employees wages!  The FREE and DISCOUNTED tickets are gone.  Thank goodness!

Mergers = super-monopoly. Hard to have a competitive market when all the airlines are the same entity. Time to light the streets on fire. Bring it on.

"And that's not a bad thing, given the miserable state of the airline industry these days." - Seems that every time I hear any industry being reported by the media or it's "so-called" reporters, it's always referred to as "miserable".

You want to know what I consider "miserable" ? That would be the Journalists and the associated media outlets that don't have a clue as to what they are reporting and or writing about.

sarah are you a republican

Since Delta found all of this money to buy out Norwest, does this mean those ex-employees don't need to pay back salary overpayments?  After all, it was Delta who overpaid them in the first place besides, didn't Delta get all of their debt wiped off the books?  Sort of sounds like that biblical story where the slave ( Delta)was pardoned of his debt by the king (our government) and the servant (Delta) turned around and demanded his money owed by another(ex-employees).  I think you call it GREED!! I wonder if those vendors who lost money from Delta's bankruptcy know about this.

Can anyone site one single example whereupon two airlines "merged" and service became better? No, you cannot. Did I forget to mention lay-offs.....? I guess I did, that is, save for the executives. And I support capitalism - the private sector and the thought of what that lying Marxist obi wan obama & co. will do to this nation if America is so salaciously greedy and stupid is beyond sickening and ruinous. Once great America is proving it deserves to wholly destroy itself in toto.

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