Delta and Northwest: Fasten your seatbelts, there will be turbulence

Diane Clarkson | April 17, 2008, 02:14 PM

If you’ve picked up a newspaper in the past week, you’ve likely read that Delta and Northwest have agreed to merge in a $3.1 billion deal that would create the world’s largest airline.

Skepticism abounds within the industry and among travelers. We can’t be blamed – there isn’t a history of seamless airline mergers.

Delta and Northwest CEOs, Richard Anderson and Doug Steenland, have written an opinion piece in the Wall St Journal offering the perspective that this merger will save jobs and protect customers from cutbacks.

The merger is based on the proposition that significant cost reductions can be achieved and the benefits of non-overlapping routes.

Maybe I’m missing something. I don’t see how larger route maps will create more demand and can’t understand how they can achieve major cost reduction without the major changes they are assuring won’t happen. Further, the costs of the merger alone could negate any savings (see Scott McCartney’s article in the Wall St Journal looking at the history of several mergers and associated costs)

In these times where airlines need to do something more drastic than charge us for checking a second bag, I want to believe Mr. Anderson and Mr Steenland. I’m afraid I remain among the skeptics.