Delta (DAL) And Northwest (NWA) Get Urge To Marry

Northwest (NYSE: NWA) and Delta (NYSE: DAL) are getting very close to announcing a merger. According to the FT "the airlines may clinch the landmark accord as early as mid-February, the people said, though they cautioned that negotiations may still stall or even collapse."

While merging airlines in periods of high fuel costs and a tight economy may make some sense, the savings are probably overrated. Customers service and other back office jobs can be cut, but knocking down flght crew expenses often leads to serious and disruptive labor disputes.

There is no solid evidence that the mess which always results from putting together two airlines drives customers away.But, poor reservations service and badly run ground operations don’t bind the passergers to the carrier.

The merger may save some money but it almost always hurts customer affairs.

Douglas A. McIntyre

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