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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

 

Sure hope Northwest pays all the money backthe

When are the airline companies going to stop blaming oil prices, they are what they are.  They need to justify the additional price we pay for poor service and hospitality, comfort and flight delays.  At times during our life we need to travel by air, just make the cost of travel meet the service we deserve as consumers.  It's very hard to justify the pay scales for some of the Airline Executives!

Hey Herb.....It's such a relief to know YOU won't be flying our airline (EVER)... We surely hope you stay home and continue drinking with your comrade John Teeter. By the way how is the weather in Moscow? I can't believe you should choose to continue living here in the U.S. under a new lying Marxist President. So why don't you break your piggy bank, call up your favorite foreign airline, and book yourself a coach seat (near the toilet) to Bali Indonesia. Don't worry about the frequent flyers, worry about getting an education before you decide to criticize America and two wonderful airline companies. I think it's waaaaaay past your bedtime.

continued,,  that they borrowed from the Minnesota taxpayers.

to Bill and "For eternal rest fly Northwest" - that sounds like a promo ad for the county mortuary.

Ticket prices have been ruinously low the last few years, as if the airlines were playing limbo -  Let's see who can go the lowest.  if consumers quit buying tickets prices will either go down or the airlines will quit flying.

The problems with Airlines so not relat to the cost of tickets or other difficulties that now hinder them. The sole problem then to fail is the Fereral Security requirements mandating customers to be screened by the discusting system now in plane.

This is very concerning considering the fact that another branch of our government charged with testing our security system has found every airport systen checked failed to detect the restriced items they easily smuggled through.

I guess the real question that needs to be asked is, why do we have the security check if in fact they are not effective?

When I was in the military I received a top secret clearance relating to my militarl police dutty requirement why cannot this be done for our flying people. I don't want to fly with anyone that cannot qualify for a top secrety clearance anyway

The rise in the cost of airline travel has not come close to keeping up with inflation.  Since deregulation, airline travel has been a steal for the average consumer.  Ticket prices have been fairly flat for the past two-to-three decades.  All you whiners out there forget how expensive tickets used to be relative to the average income of the American consumer back in the 1970's.  If airlines are such ripoff artists, why do they continue to go bankrupt one after another?  Stock prices of airlines have been down for years.  It's one of the few industries the public feels is not entitled to any sort of profit.  Take the bus if you can't afford a ticket.  Airline travel is not a right.

I worked for Northworst when Al Chechi and Gary Wilson bought them back in 1987. I recall then they wanted to create the largest airline in the world. Now 20 years later their handpicked CEO from Northworst,who now heads up Delta cons the Justice Department to approve a merger that will further errode the combined two. This bunch of bandits has destroyed good union jobs and two airlines that used to own there own planes. Be wary Northworst pilots, you sold your soles to the devil when you allowed the airline to run with replacement workers during the strike in 2005. Your ALPA brothers at Delta will do the same to you as you did to us but only worst. Last time I checked Regional Airline Pilots make less than $50,000 per year.  

Sounds good to me, the only thing depressing is it will no doubt take 18 months to approve the merge,---- or will it???????????????????????????

Deregulation only screws the consumer

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