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Delta-Northwest merger

When airlines merge, travelers too often suffer

A nice note from Richard Anderson just popped into my e-mail box. The boss at Delta Air Lines wanted to assure me and a few million other SkyMiles members how swell things will be when his company and Northwest combine this year to create the world's biggest airline.

The new Delta will fly us direct to major business cities from Beijing to Bucharest. We'll snooze away the hours in lie-flat seats. Cool new bag-tracking technology will keep our luggage from ending up in Timbuktu.

I'm sure it's all true. But airline mergers tend to give average travelers headaches, intentional or not. And it could get really ugly if a successful Delta-Northwest deal drives other major network carriers to get hitched, as many experts predict.

Like other businesses, airlines typically combine to make more with less — fewer planes, fewer flights and fewer people. All these can cause pain for consumers. Some possible outcomes:

Higher ticket prices: Big mergers can mean less competition and reduce the supply of available seats, driving up fares. This is especially true when routes of the two airlines overlap. Delta and Northwest have relatively little overlap on nonstop routes. So, fare hikes might be modest.

Packed planes: Another result of jamming the same number of fliers into fewer seats. Airline load factors, the percentage of seats filled, are already above 80 percent for most airlines. Merging their fleets would let the new airline better match each jet to the number of passengers on a route, executives said Tuesday. Read: fewer empty seats.

Angry employees: Delta and Northwest pilots couldn't agree on a way to rank aviators on seniority, which dictates pay and routes they would fly. Other union workers at Northwest pledged to fight the merger over worries about their pensions. Unhappy employees can slow down an already thinly staffed carrier. Think flight delays and luggage mishaps are bad now?

Bad connections: When the new US Airways tried to combine the Web sites and frequent flier programs of the old US Airways and America West, things went haywire. Customers couldn't book flights to the airline's biggest hubs. Online check-in didn't work. Frequent flier miles were lost. Airlines are intricate businesses, and the pieces can be hard to fit together. Customer service always suffers.

Delta and Northwest hope federal regulators approve the merger by year's end. Unions, politicians from Northwest's home state of Minnesota and consumer advocates are already applying pressure to kill the deal.

Delta chief Anderson and Northwest CEO Doug Steenland made a strong pitch Tuesday to blunt the opposition. No "frontline'' employees — air crew members, airport workers and reservation agents — will be laid off, they pledged.

Although new Delta's headquarters will be in Atlanta, the airline will keep ''significant jobs, operations and facilities'' in Minnesota. None of the airlines' six hubs will close.

Their presentations to analysts and reporters wrapped up before noon. Before the day was done came more merger news. Continental Airlines announced it would review "strategic alternatives,'' reportedly a deal with United Airlines. Stay tuned.

Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.

Expected impact on consumers

• Merging fleets would let the new airline better match jets to the number of passengers, meaning fewer empty seats.

• Less competition and fewer empty seats could mean higher fares.

• Delta pilots support the deal; Northwest pilots oppose it. Unhappy employees can slow down an already thinly staffed carrier.

When airlines merge, travelers too often suffer 04/15/08 [Last modified: Wednesday, April 16, 2008 4:22pm]
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