Delta, Northwest deal fails to thrill investors, some unions (bankrupt, companies, cost)

[cottonwood2420]

ksl.com - Delta, Northwest deal fails to thrill investors, some unions

[ChunkyMonkey]

I'm not sure where the cost savings are coming from. They propose keeping all their hubs and won't be reducing capacity or laying anyone off. If anything, I read somewhere that Delta's deal with their pilots will increase labor costs. I suspect, that if the merger is approved by the Feds, you'll probably see the elimination of Cincinnati and Memphis as hubs. Salt Lake City may stay since it is their only western hub.

[Buckhead_Broker]

I heard today that the baggage handlers union was concerned because they hadn't been asked their thoughts. You want to know why? Because none of the folks handling this merger give a rats butt what the baggage handlers think! And they shouldn't. A merger that creates a $32 billion per year company and the baggage handlers think their opinion counts!!?? Shut up and get back to work!

[Frankie117]

Not sure how many of you remember when the first big merger of the nation's rail networks began occurring, but I believe it can be paralleled with the current airline situation. In the 1980's the railroads had lots of redundant routes, and the country was well covered, unfortunately every single railroad in the Northeastern states and Midwest went bankrupt. This of course prompted mergers, and mass abandonments of thousands under-used lines.

Unfortunately with this recent deal with the airlines, a lot of "local" air service will probably be discontinued - Certain companies will gain monopolies within certain cities, while others shrivel up and die. A need for less hubs means that some cities will not be nearly as busy as they once were, destroying a lot of economies that accommodates passengers with hotels, food, etc. The airlines will begin focusing on profits as opposed to availability of service, with certain 'airlanes' getting extra attention, and less used ones getting more and more inconvenient.

[bhcompy]

the problem is that the rail network was out of use as the major mode of personal transportation at that point, so its not a truely viable comparison. until aircraft are usurped by something faster, travel will still be needed through local air service puddlejumpers and such. as long as there is a real need, someone will keep trying to provide. there is no real need for all those rail networks anymore since shippers use aircraft and longhaul trucks for transport and passengers use aircraft.

[Dd714]

Railroads, or, Amtrack since there is essentially only one people mover, have been long government subsized to allow it to survive. I don't see any increase in their business.

The mergers are necessary for airlines to survive. Expect prices to rise as competition goes down. Again, sad to say, that's needed for airlines to survive. Flying is cheap, service sucks, airports and flying in general sucks. It's the new bus, which is, was the train of the early 20th century. But prices will rise.

They need to bust the airline unions, that's for sure. No more baggage handlers making $70,000 a year and losing luggage. Tired of waiting half an hour for my bags to make it (or not make it, as the case may be) to the pickup area. Also, pilots have to face it, they are bus drivers now.

Hubs will close, yes. But the trend will be to huge more economical coast to coast or hub to hub equipment, wide bodies, less flights, less choices, but larger planes.