Apr 15, 2008 6:57 pm US/Central
How Does A NWA-Delta Merger Affect Customers?
(WCCO)
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The CEOs of both Delta and Northwest continue to say that this deal will not affect the price of tickets. (File)
CBS
Passengers who fly with Northwest and Delta Airlines are wondering how the deal will affect them.
Flying as we know it now at Minneapolis-St. Paul International might change if the airline deal goes through.
You'd think it was the greatest deal since the Wright Brothers flew the first plane if you listened to the Delta-Northwest news conference on Tuesday morning.
"Today's announcement is great news for Northwest Airlines, our employees and the airline industry overall," said Northwest's CEO Doug Steenland. "For our customers, the combined Delta-Northwest will focus on providing excellent service, value and travel options."
Combining the two carriers would create the world's biggest carrier: 1400 planes serving 400 cities.
Northwest, already strong in Asia, will combine with Delta's strength in Latin America, Europe, the Caribbean, Africa, and the Middle East.
"Customers will be able to fly to more destinations, have more scheduling choices, and more chances to earn and redeem frequent-flyer miles around the world," said Delta's CEO, Richard Anderson.
While it all sounds good, one expert said it's not.
"Give me a break! That's what I say," said Dr. Alfred Marcus, a professor at the University of Minnesota that studies mergers and acquisitions.
"I think overall what this means is fewer flights, higher prices ... less convenience," said Marcus.
He believes this new global airline will have monopoly power to raise fares and will likely cut flights to smaller, regional destinations, like Sioux Falls or Wausau.
Take Kansas City, for example, where Northwest flies direct seven times a day. There might be fewer in the future, connecting through Atlanta or charging more for non-stop.
The CEOs of both Delta and Northwest continue to say that this deal will not affect the price of tickets.
They also insist they will not close hubs, including the Minneapolis-St. Paul hub.
They airlines said they will upgrade international planes with better seats and entertainment, but Marcus doesn't think the new airline will have enough money to do things like that.
There is some good news in all this that both the airlines and financial experts can agree on. That is, the frequent flier programs for both Delta and Northwest.
The plan is to merge the two into one program, so the next time you fly, you'll have many more choices to earn and redeem your miles.
Just like all successful ventures, this one has some obstacles, both for the airlines and quite possibly their passengers too.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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