| It's in all the papers…and
if you're a Northwest WorldPerks member or Delta SkyMiles member…you've already
received an e-mail touting the great new opportunities the merger will bring.
At Passageways, we think that's largely true. Of course, this will play out over
time with regulators- including the Congress- picking at the agreement, union
groups on both sides- especially the challenging pilot groups who could not deliver
a combined seniority list on their own- pushing and pulling here and there, and
two already huge organizations struggling to combine the best of each into an
organization that really delivers the synergies everyone talks about. It will
continue to be challenging for some time…but we wish both carriers much success
in this combination. Honestly, the basics are pretty impressive. - The
combined airline will carry the Delta name and be headquartered in Atlanta. Delta
CEO Richard Anderson will lead the combined company. As noted here previously,
Northwest CEO Doug Steenland will be well compensated as he departs.
- The
combined value of the airline will be $17.7B. The biggest challenge there will
be that they face the same sobering fact at the pump that we do…oil just cracked
$112 a barrel.
- The combined Delta Air Line will offer access to 390 worldwide
destinations in 67 countries. This combined airline is almost a "do it yourself"
entity…that could minimize further sketchy and uneven code-shares that often mean
uneven and frustrating services. Certainly, they'll want to maintain and enhance
their individual joint ventures with KLM and Air France (Air France already owns
KLM). And, they are both already members of the SkyTeam alliance.
- One
Delta announcement I received notes that all hubs will be retained…Atlanta, Cincinnati,
Detroit, Memphis, Minneapolis/St. Paul, New York, Salt Lake City, Amsterdam and
Tokyo Narita. I'll give them that short-term, but unless significantly lower operating
costs are in place in Cincinnati and Memphis, I'd be concerned for at least those
two. The future for Detroit Metro looks great. Just as Delta has concentrated
on growing Atlanta's international reach, Northwest has focused more and more
in Detroit with a world-class facility (Anderson was at Northwest as this investment
was made), growing Detroit's international services and enhancing connecting opportunities
with additional regional jet service as well as a commitment to upgrading the
fleet with the 787 and more..
From Detroit Metro, Delta and Northwest overlap
on only four markets- New York, Atlanta, and Cincinnati - and as soon as Northwest's
announced non-stop begins, Salt Lake City. Delta's other service points in Michigan,
Flint, Grand Rapids, Kalamazoo, Lansing, and Traverse City seasonally; do not
overlap Northwest non-stop services. - The combined carrier will employ
nearly 80,000…at least to start. While preserving jobs is important, the bottom
line will demand that overlapping areas be trimmed. That will happen- headquarters,
maintenance and elsewhere. It has to. A unique challenge will be posed there by
Minnesota Congressman Jim Oberstar, chairman of the House Transportation and Infrastructure
Committee who has already announced he opposes the merger and will fight to save
jobs in Minnesota…especially his home 8th District. Full regulatory approval will
probably take the balance of the year.
So what can you do? Right now,
just bring your seat to the full upright position, stow your tray table, fasten
your seat belt…and know that both current carriers want to keep you as a frequent
flyer…and your miles are safe… Both carriers and then the new Delta will be looking
to take care of you…and Passageways will be there to help you along the way. Anticipate
that both programs will continue separately for well over a year. If they get
back to valuing each and every customer…and recognizing that frequent customer…they
could exceed expectations…ours and theirs.
Every time a customer makes a
reservation, checks in or shows their boarding pass to the flight attendant, they
offer their name. So, "Delta", let's start by taking advantage and showing some
appreciation by saying "thanks for flying with Delta today, Mr. Rockne"...
As noted, Delta CEO Richard Anderson is also a former CEO of Northwest, so he
literally knows these two carriers better than anyone. Add to his accumulated
airline knowledge, his experience in raising his two younger sisters after the
deaths of his parents, a stint in the prosecutor's office in Houston and you have
a leader who just might be able to pull this off.
Tom Rockne
President
Passageways Travel
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