Delta/Northwest merger
Delta’s proposed takeover of Northwest has the pundits buzzing about what it’ll mean to the airline industry, stock market, and business travelers. Big surprise, but there’s no mention of what it means to us here in Ithaca, N.Y. So for the record, here’s my take on the merger from a Central New York perspective.
Pray that Delta lets us keep our two daily flights between Ithaca and Detroit. The city of Ithaca (and Cornell) worked so hard to persuade Northwest to test this market and gave them so many economic incentives for the first couple years that it would be tragic to lose these vital flights now. While the 34-seat Turboprop planes are often full, that doesn’t necessarily mean they are profitable. The fact that the flights are actually operated by Mesaba Aviation for Northwest makes it even more complicated. Who knows if Delta will choose to continue these contracts with regional carriers? On the one hand, Delta wants the expanded market that Northwest’s route network adds. On the other hand, both airlines have been reducing domestic capacity.
Prices will rise. They have to rise, because at today’s oil prices the airlines cannot continue selling seats below cost and survive. Budget airlines are collapsing under the burden. More legacy airlines will merge, and in today’s Washington the mergers will be approved.
We vividly recall the system-wide meltdown when US Airways and America West tried to merge their reservation systems. But that shouldn’t be a big problem for Delta and Northwest. USAir switched from Sabre to America West’s unique system, but Delta and Northwest already use the same reservation system: Worldspan. Their agents won’t even need to be retrained!
The one thing you don’t have to worry about is your frequent flier miles. Delta wants Northwest frequent fliers to become loyal Delta customers and they will honor the miles you’ve earned. With the expanded flight network, there will be a lot more places to go on your mileage award tickets.
Nothing will change until after 2009. And I’d rather see airlines merge and prices increase than lose major carriers altogether.
Pray that Delta lets us keep our two daily flights between Ithaca and Detroit. The city of Ithaca (and Cornell) worked so hard to persuade Northwest to test this market and gave them so many economic incentives for the first couple years that it would be tragic to lose these vital flights now. While the 34-seat Turboprop planes are often full, that doesn’t necessarily mean they are profitable. The fact that the flights are actually operated by Mesaba Aviation for Northwest makes it even more complicated. Who knows if Delta will choose to continue these contracts with regional carriers? On the one hand, Delta wants the expanded market that Northwest’s route network adds. On the other hand, both airlines have been reducing domestic capacity.
Prices will rise. They have to rise, because at today’s oil prices the airlines cannot continue selling seats below cost and survive. Budget airlines are collapsing under the burden. More legacy airlines will merge, and in today’s Washington the mergers will be approved.
We vividly recall the system-wide meltdown when US Airways and America West tried to merge their reservation systems. But that shouldn’t be a big problem for Delta and Northwest. USAir switched from Sabre to America West’s unique system, but Delta and Northwest already use the same reservation system: Worldspan. Their agents won’t even need to be retrained!
The one thing you don’t have to worry about is your frequent flier miles. Delta wants Northwest frequent fliers to become loyal Delta customers and they will honor the miles you’ve earned. With the expanded flight network, there will be a lot more places to go on your mileage award tickets.
Nothing will change until after 2009. And I’d rather see airlines merge and prices increase than lose major carriers altogether.
