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Letters
Friday, February 15, 2008 12:00 AM

Ask the pilot

Who benefits when airlines merge? Who gets hit the hardest?

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Sunday, February 17, 2008 12:23 AM

Wow Older, crappier planes than Delta's!

In the air! Wow! Who wants to fly the merged entity. The last Delta flight I took (a few months ago) we had to go back to the gate because of some indicator light problem in the cockpit. When it got fixed and we took off, low and behold! The electricity didn't run to my seat (in the center section). I had 9-10 daylight hours to sit in the dark (the window shades were down for the movie) with not enough light to read and no sound for the movie. Almost every Delta flight I've taken in the last few years has had some sort of problem.

And now they're merging with an airline with older planes!

Impressive. When is Aeroflot International (a much better airline than Delta) going to fly direct from Moscow to Boston? I'd abandon Delta in a heartbeat. Newer airplanes, nicer staff, and hey, Aeroflot's food isn't any worse.

Saturday, February 16, 2008 09:31 PM

Nostalgia for PanAm??

Having flown on PanAm many times (US <-> Australia) before their blessed demise I find the idea of nostalgia odd. The only word for their customer relations is "hostility", and I was flying business class, each ticket could have bought a nice car, the schmucks in economy probably got cattle prods. If anyone tries to bring back this hated name I'll avoid them like the plague.

Saturday, February 16, 2008 05:02 PM

Fleet integration not so simple

I don't think fleet integration is as simple as two airlines flying similar aircraft types. Continental and United may both fly 757s and 777s, among others, but Continental uses Rolls-Royce engines on their 757s while United uses Pratt and Whitney powerplants. Same with the 777s -- Continental uses the big GE90s compared to United's P&W's. Plus there can be lots of less apparent differences like emergency exits and galley configurations that make otherwise similar aircraft types vastly different to the maintenance shops. I remember American Airlines having a heck of a time integrating TWA 757s into the fleet; some of those TWA birds were sold off to other carriers with more commonality. So fleet commonality goes quite a bit deeper than just what aircraft type is painted on the fuselage.

Saturday, February 16, 2008 03:56 PM

Eastern

Had the misfortune of being targeted by the Mechanics Union. As Lorenzen saw it, he had a choice between giving in to their unreasonable demands and going bankrupt and not giving in to their unreasonable demands and going bankrupt. So they held firm and went belly up. The union had shown everyone that they could kill an airline, negotiations with the other carriers went much more smoothly, and everyone was happy except the passengers who had lost an airline that was always on time and gave us a great experience.

The planes went on to become the original Southwest Airlines fleet.

Saturday, February 16, 2008 12:28 PM

Needn't be so complicated

I suppose it does ultimately make sense to combine some of these behemoths and streamline things, but I believe the idea of NW and DL or CO and UA combining to create two mega-carriers is unappealing to most people.

Customers tend to be loyal to brands they prefer, either because they genuinely like the brand (in my case, it would be Continental), or because they've accumulated so many frequent flyer miles they choose not to switch (in my case, it would be Delta). It's in the airlines' best interests to maintain these brands, even if the corporate structure and route structure dramatically change. In the case of NWA, for example, its Asia-Pacific route network is not only highly coveted, but very entrenched brand-wise. Changing the brand identity to Delta in a market that has been a Northwest market for decades might not be a wise move. Domestically, though, NWA probably doesn't need a hub in Memphis since Delta has one in Atlanta. Similarly, Delta may not need Cincinnati anymore since Northwest has a world-class facility in Detroit. This is a painful thing for those local economies and the employees affected, but it's better in the long run, and creates opportunities for competition (Southwest, AirTran, JetBlue) to fill the void.

In my opinion, the wiser move definitely would be to do an Air France/KLM-style merger, where finances and back-office operations are merged but the two carriers continue to fly as separate "brands" operating under one corporate entity. Standardization of the fleets could still happen, as well as elimination of redundant routes and flights without significantly abrogating labor agreements or frequent flyer programs. (DL and NWA have reciprocal frequent flyer programs now, anyway, as members of SkyTeam; CO and UA, sadly, do not.) Facilities and equipment on the ground could also be streamlined to improve efficiency.

I disagree, though, with any notion that bigger is better and that it's possible to sustainably grow profits over time in a business like this. 8th grade economics taught us all about supply and demand. These carriers need to reduce supply and strategically re-allocate resources and route structures to fit customer demand so they can achieve a better equilibrium in terms of operating costs and pricing while delivering improved and consistent value--to the customer as well as the shareholder.

It's true that customers today have a very low price threshold, so the airlines' only choice is to improve operating efficiencies, cut back on supply, improve customer service and stop trying to compete in every market. If they became more specialized and less commoditized, I think they would gain quite a bit.

If you ask me, I wouldn't be surprised if, eventually, American, Delta and Continental were providing primarily international and intercontinental service from major U.S. cities, with significantly scaled-down domestic operations, while carriers such as Southwest, AirTran, JetBlue, Skybus and Virgin America provided the bulk of cheap, frequent, point-to-point domestic services. The big majors should stop trying to compete in already glutted domestic markets and focus on what they know will earn comfortable profits in a more sustainable business model.

Friday, February 15, 2008 10:03 PM

Who gets hit hardest? Usually junior employees.

I've been involved in one merger, narrowly avoided another, and witnessed firsthand the merger of Canadian Airlines International and Air Canada. What a mess. A monumental battle over what date was going to be used to calculate seniority (service date vs date of hire) resulted in an arbitrator coming up with a formula that saw people losing years of seniority - on both sides.

It's always the junior employees that get furloughed. Which is unfortunate because the junior employees are often still keen about the work and not as jaded as the seniors.

It's been years and employee groups are still bitter about how seniority integration was handled. Long time employees are still referred to as Original AC or Ex-Canadian. Theres a real divisive wedge that still exists between them. This isn't that unusual since some Canadian Airlines friends had been through 5 mergers by the time the last one rolled around, and they were all still known by their "exes".

Still a merger is seen as an easy way of increasing market share, obtaining access to aircraft, qualified employees, and customer bases in short order and at a discount - especially in the case where one airline is not doing very well. There have been several instances here in Canada where the two airlines try operating under different names, but none have been successful.

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