Is a Delta-American merger a plus?

For nearly 20 years, Delta Air Lines touted, “Delta is ready when you are.”

The question on the minds of travelers and Delta employees alike on Thursday was, “Is Delta ready to buy rival American?”

Wall Street thinks so. Delta’s shares got a boost Thursday from the buzz. But Delta isn’t talking, at least publicly, and nor is AMR, the parent of Fort Worth, Texas-based American Airlines.

Atlanta-based Delta already faces more competition from Dallas-based Southwest Airlines, which acquired AirtTran Airways last year and gained a foothold into Delta’s backyard at Hartsfield-Jackson International Airport, the busiest in the country. Delta is the largest carrier serving Hartsfield-Jackson, and Southwest will replace AirTran as Delta’s chief rival in Atlanta. Southwest is expected to launch 15 daily flights from Hartsfield-Jackson to five cities beginning next month

Do you think a Delta-American merger will be a plus for travelers? Will further consolidation mean higher fares, more flight delays and lost baggage? Will pilots, flight attendants and other employees of Delta welcome such a merger?

64 comments Add your comment

Bored

January 12th, 2012
3:36 pm

So if Delta were to acquire American, would United go after US Airways? Then we’d have TWO airlines?? Delta (consisting of Delta, Northwest, American), and United (United, Continental, US Airways). Have we left anyone out? Talk about decreased competition…

Grounded

January 12th, 2012
3:41 pm

This will never fly. It will never get off the ground.

Roy

January 12th, 2012
3:46 pm

I used to work at AA back in it’s good days. Under Crandall it was well run with good salaries and great benefits. Sad how its all come to an end because of greedy management out in Dallas. My chief concern would be for decreased competition and how that could effect airfares if DL were to buy them.

Skypesos

January 12th, 2012
3:51 pm

Delta will take American’s frequent flyer program (which is much better than Skymiles) and make it like theirs…Skypesos, useless and worthless. Delta did the same thing to Northwest’s program…

Consolidation

January 12th, 2012
3:51 pm

The only way the airlines under deregulation will ever be consistently profitable will be to continue to consolidate. If there ends up only a couple of big carriers, others will fill in the gaps but not on such a large scale to cause unprofitability. I say let us see where this goes.

morgwreck243

January 12th, 2012
3:59 pm

If Delta has the financing, then it could pull off the merger. But the government would ask that the new Delta give up a lot of the gates at a lot of domestic airports. Basically, the only way that I could see the government to give its approval is if Delta only aquired a majority of American’s international flights and some domestic areas that Delta currently doesn’t serve heavily. there would be too much local pushback because of the impact of a de-emphasized hub, such as DFW.

Look before I leap...

January 12th, 2012
4:19 pm

I think the DOJ would require significant restrictions in the areas where there is real value for the deal. Namely LAX, SFO and NYC.

But, assuming the deal is allowed to go through, the real issue will be with the pilot’s unions. American pilots are represented by Allied Pilot’s Union and Delta by ALPA. Remember, the APA crapped all over the ALPA pilots during the TWA acquisition. ALPA may be looking for a little payback. In order to gain pilot support, Delta would have to be ready to guarantee protection of the pensions which taints the economics considerably.

I think you;d also see elimination of Memphis as a hub in favor of Nashville, Detroit in favor of O’Hare, further erosion in MSP and SLC could see a big hit as Delta consolidates it’s west coast presence in California.

There are some big operational issues to tackled, union consolidation, pension and benefits, seniority consolidation, route and hub management, etc.

From a PAX stand-point, I don’t see a gain at all. Bigger is usually not better for the flying public. Delta was a much better airline from a customer standpoint when they were number 3 or 4.

mark

January 12th, 2012
4:47 pm

Never going to happen

Darvocet spending

January 12th, 2012
5:08 pm

Consolidation

January 12th, 2012
3:51 pm

The only way the airlines under deregulation will ever be consistently profitable will be to continue to consolidate. If there ends up only a couple of big carriers, others will fill in the gaps but not on such a large scale to cause unprofitability. I say let us see where this goes.

No, this is a lie. It will decrease competition and the larger carriers can use their clout to keep low-cost carriers at bay to some degree.

Airlines have never been very profitable since deregulation. They operate on razor-thin margins. Even a former airline exec (can’t remember his name offhand) told his employees that he didn’t ever invest in airline stock, even his own. And there’s always this joke that’s been around since the dawn of airlines:

How do you make a small fortune in the airline industry? Start out with a large one.

This is a horrible idea that will result in higher fares and layoffs.

soup

January 12th, 2012
5:09 pm

amr lost a lot of market may be to late to catch up I see some cherrypicking usair long shot delta no way be lucky to get out of chapter 11 intact swa in drivers seat with wright amendment next year.

William

January 12th, 2012
5:11 pm

Delta doesnt care about taking all of American just pieces, look what happened to PANAM. Delta will take Miami, Dallas, & LAX! Divesting all NY Slots and taking terminal 8 at JFK Rest can be split to other carriers :)

S

January 12th, 2012
5:13 pm

What goes around comes around or some such thing..didn’t the we deregulate the airlines way back when and here we are back to where we started, almost.

Delta Diamond

January 12th, 2012
5:32 pm

Skypesos…….Delta’s Symiles programs is way better than American Airlines. I was Platinum with American and now Diamond with Delta….no comparison!

Bob

January 12th, 2012
6:53 pm

If Delta aquired American, lots of work to get AA employess giving better customer service, lots of work.

Jim

January 12th, 2012
6:58 pm

I pray this does not happen…Delta service went to poop after the Northwest merger and I think this will only hurt more

Latrice

January 12th, 2012
9:51 pm

Merging two mediocre airlines won’t create one good one. For Delta it’s the equivalent of a Buckhead debutante marrying down to a trailer park dweller. Don’t do it Delta.

Michael

January 12th, 2012
10:39 pm

First of all, this would be a Department of Justice nightmare. It would make Delta dominant at both New York La Guardia, and JFK, no way that happen. Plus American’s Chicago hub is already surrounding by Minneapolis, Detroit, and Cincy, American’s largest hub Dallas, would make no sense, since Delta abandon its own Dallas hub in the past. Also , I don’t see American giving up its Latin America routes, because its a vital part of the profitable Miami hub . I think Delta’s strategy is to provoke US Airways to do something.

merger

January 12th, 2012
11:10 pm

merger = less competition, higher prices, worse service. Yes!! That sounds like a positive!

J-Mo

January 12th, 2012
11:14 pm

Cant imagine how many jobs will be lost IF this went through.

Aaexplat

January 12th, 2012
11:55 pm

Yeh delta only wants pieces of AA but it makes sense, if justice will go for it. Mia, dfw intact. Lax becomes a nice hub with the combined operation of dl and AA. My guess is that rod wins out over dtw, especially if Obama is still in office when this goes down (no way the Chicago boys let delta dehub chicago). NYC is a mess with terminal 8 and international routes all that remain of AA operation. Aas lag operation will be auctioned off for antitrust reasons, with keynote getting most of it. Also, dl may risk unionization here. Finally BA will fight this hard. My guess is that this is a longshot, but it’s a smart move. Delta is hubbed in a lot of second tier cities (dtw, minn, cin, mem, slc) and long term that is not advantageous for competing with ual, who is hubbed in major cities. Even Atlanta isn’t the greatest Origen/destination market…so getting all those slots might be worth the risks…I would be more interested in seeing what kpg has planned. If they merged AA with jetblue while operating them as semi separate units that could be interesting…my guess is that no one is going to want AA unless the judge crushes the unions pretty good…otherwise it will be back to court in a few more years…

Derrick Lyle

January 13th, 2012
2:32 am

Heck no!!!!! Regulators, please don’t let this proposed merger go through!!! Talk about prices going up; we need more competition, not less. And given the debacle surrounding AT&T, and Atlanta’s diminished role, I would think Atlanta area folks should be more skeptical of this planned Delta-AA deal.

No good

January 13th, 2012
7:25 am

after the merger, will delta jack up bag fees even more?

3d

January 13th, 2012
7:42 am

If it happens, get ready American customers for Delta’s rip off bag fees.

Oh wait, you may already have your own rip off fees.

Mike

January 13th, 2012
7:45 am

Acquiring American would send Delta to certain bankruptcy. I say let it move ahead so we can finally be rid of Delta and have airline service in Atlanta that doesn’t treat it’s customers like one of those monster mega banks treats its customers.

Trial Lawyer

January 13th, 2012
7:50 am

Delta does not pay sales tax on its fuel at ATL but it can buy another airline. Another case of Republican protection of big business. If you are a middle class business owner is your fuel sales tax exempt?
.

HDB

January 13th, 2012
7:58 am

Too many problems with this idea:

1) Hub/Route structure: DL pulled its mini-hub out of DFW in order to beef up in CVG & SLC; now they’d have to consider what to do with a minihub in STL while coping with ORD/MSP/DTW. A DL/AA merger would virtually monopolize LGA/JFK/EWR/BOS and strangle DCA. MEM & BNA would compete for pax loads with SWA.

2) Unions: AA is HEAVILY unionized…and DL is trying to break any union that tries to organize its employees. It WON’T happen this time

3) Fleet compatability: Although comparable, AA’s older Airbus A300/310 equipment would increase DL’s maintenance costs. It may not be as bad since DL acquired NW’s A330s in the merger

4) International partners WON’T buy off!! BA and Quantas won’t think about allowing this to happen! Imagine BA/AF/KLM being international parnters………a virtual monopoly on European markets…and the EU won’t let that happen either!! DL won’t feed a competetor into SYD/MEL since they are now working on brand recognition on the LAX/SYD market.

IF they could get past all this…..the only thing that would be certain is INCREASED FARES nationwide….which would cause decreased ridership on the majors…..and shift pax loads to SWA!! DL/AA domestically would take a beating!!

Silverchief

January 13th, 2012
8:06 am

Delta’s slogan D idn’t
E ven
L eave
T he
A irport

AA and Delta both suck!!

Bari

January 13th, 2012
8:28 am

Great idea! Go Delta!

markmjtx

January 13th, 2012
8:46 am

Is it a plus? No.

Mark

January 13th, 2012
8:51 am

I grew up in Atlanta and always flew Delta where ever I went. Delta used to be a great airline with friendly employees and great service. Over the years, something happened. Perhpas it was new managment, the reorganization or just getting too big. I now live in South Florida and fly American where ever I go. American service is better, the employees are friendlier and yes the Frequent Flyer program is not only better, they treat frequent flyers with with respect and earn their loyalty. I have many friends from the Navy and Naval Air Reserve who flew with or still fly for Delta. If Delta is allowed to merge with American it will be a disaster for American and I will have to find another airline to fly. Unfortunately all Delta will do is bring its bad practices and corporate attitude to an airline that treats its passengers more like airlines including Delta used to.

William H

January 13th, 2012
9:02 am

I hope not. I am a Republican, but thank goodness for a Democrat Justice Department. They have the guts to enforce the antitrust laws. Republicans don’t.

Brian

January 13th, 2012
9:33 am

I doubt it would pass regulatory muster. More likely, USAir will be able to merge with/buy AMR. It would make AMR the dominant carrier in the Southwestern US and extend USAir’s international reach in a positive way. There is virtually no hub overlap with the two of them, either.

USAir is a horrible, horrible airline. For AMR’s sake, I hope that doesn’t happen.

Joe

January 13th, 2012
9:48 am

I hope not we will have a bigger crappy airline

Bobby

January 13th, 2012
10:35 am

Simply put, less competition for airlines. Higher fees for consumers. Which benefits only the executives at Delta.

Jane

January 13th, 2012
10:38 am

No, yes, yes, yes, H#$&* no!!!

keep delta my delta...blah blah blah

January 13th, 2012
11:03 am

Delta is a corporation, not a company. It sucks. It service sucks. so added more to it would suck even more!

sparky

January 13th, 2012
11:26 am

Once again a Media attempt to make a story. Quit trying to make news.

ls

January 13th, 2012
12:25 pm

As a DL employee, I hope it doesn’t happen. Right after the buyout of Western, Allen tried to buy PanAm. Look at how that turned out. Our troubles began with that deal. Now we merged with NWA and we are still looking at layoffs, or uh, buy outs. We are tired of this. Merge with AA and we will right back where we were with NWA and their layoffs. We have no job security anymore. Every six months there are cut backs. Whether it is people or routes. WE ARE TIRED OF IT

ex dal

January 13th, 2012
12:46 pm

Is. I got pushed out of Delta after 12 years with the company when the NWA merger took place. Horrible Leadership at the GO. I can’t imagine how it is now. How many more mistakes can this once great company make?

ex dal

January 13th, 2012
12:48 pm

Keep. I remember that slogan. It is amazing the lenghts the leadership at the GO will go to push their own private agendas.

Bob

January 13th, 2012
1:05 pm

CRUSH SOUTHMESSED

NOM NOM NOM

January 13th, 2012
1:24 pm

If we’re going to have a suck airline in ATL, then let’s have the BIGGEST doggone suck airline in the country!

Woohoo! Flight delays for everyone! I KNEW we could do it!

Thanks Jimmy

January 13th, 2012
1:33 pm

Thanks Jimmy Carter for deregulating the airlines.
Has anyone seen any real benefits from airline deregulation?

Darvocet spending

January 13th, 2012
1:49 pm

I can’t wait until the legacy carriers go out of business. With their political clout I doubt it will ever happen, but I can still hope for it.

jassons

January 13th, 2012
2:01 pm

BAD idea and should be shot down immediately by government regulators…if anything the government should go back to regulating the airlines….Mergers are bad for business, competition, jobs, and prices. The consumers and employees will get screwed again…

Just a number

January 13th, 2012
2:13 pm

@ ex dal, Count your blessings that you aren’t a part of the current DL mess. The Delta Airlines of today is like fools gold. The top executives work hard at making the public perception of how much they value their employees, as their most prized and important asset. Every single employee, is just a number. The number of employees go up and the number goes down. A take over of American Airlines or parts there of will only be to benefit the perception, in the public eye, that the top management is in full control and only wants wants the best for their current stock holders and current employees. Once the transaction has taken place, nothing else matters, but how much money the executives will profit. It’s been that way ever since Deregulation.

SSSShhhh

January 13th, 2012
3:02 pm

All DAL wants are the Latin American routes, everything else can rot on the courthouse steps, remember AMR is in bankrupcy, so they have given up control of the company to their creditors.

mecq

January 13th, 2012
3:24 pm

Enter your comments here

mecq

January 13th, 2012
3:27 pm

What DL needs to concentrate on is trying to compete with Southwest. The battle is on and I suspect DL will get a huge Reality check. As they should…!!!! DL cannot afford AA…and is ill equipped to deal with what’s already on their plate. They need to stay in their lane……They no longer rule the ATL……

Mark

January 13th, 2012
5:18 pm

Delta/American, United/Continental… that’s not good news for USAirways. American/USAirways would probably make for three equally strong competitors and better for passengers. All I know is that IF Delta/American clears the hurdles the Delta name will be in the dustbin.