Comments

Was Delta going to go bankrupt if they weren't bought?

Posted by Joe Marier at November 28, 2006 10:13 AM

No other point than the obvious one, but this could be sufficient from a financial (shareholder’s) point of view. The merged companies could benefit from:
1.The freedom to increase ticket-prices on markets/destinations without, or with less competition
2.The power to displace (smaller) competitors by reducing ticket-prices temporarily below their corresponding cost of services on markets/destinations with competition.

Posted by Horst Schueberl at November 28, 2006 12:34 PM

I'm not so sure it would be a bad thing. American, United, Northwest, Continental, Southwest, Midwest Express, AirTran, Jet Blue, Alaska, Aloha....there is no shortage in major markets. This weeks Business Week has a multi-page article that dissects the situtaion in depth.

In general the U.S. Airline Industry, the F.A.A and now T.S.A have single-handedly turned air travel into the ultimate consumer nightmare. The airline industry is an excercise of how not to treat consumers. I have no sympathy for any of them as they continue to treat us as cattle.

The merger would more than likely make Delta profitable in a hurry. I keep hoping a profitable airline will step up and treat the American flying public to a new way to travel comfortably and safely. ......I know I hope in vain.

Posted by Tom at Proteus at November 28, 2006 12:38 PM

What is the chance of a merger of two businesses with obsolete business models producing a business with a "solete" business model? Can two negatives really make a positive here? (Okay, I don't have an antonym for obsolete)

Posted by Brent Burgoyne at November 28, 2006 1:14 PM

Grinstein should have taken a cue from Kilts in negotiating compensation.

I say let 'em merge as long as risk accompanies the potential reward--no skipping out on obligations or shifing them (e.g. pensions) onto the gov't...taxpayer...us.

Note to Herb Kelleher: get ready to spread some luv in the southeast.

Posted by Norm M at November 28, 2006 5:32 PM

It will suck because big mergers suck and espeically because US Air sucks more than it is possible for anything to suck. I was giving a speech in Boston the day it was announced, and the local paper wrote that US Air would then become the largest carrier at Logan. I offered to do a moment of silence in sadness to acknowledge the audience's future travel woes.

Posted by Steve Yastrow at November 29, 2006 1:15 AM

Big business seems to be more comfortable with merging rather than innovating. It takes a long time, everyone is very busy signing documents having meetings, talking about the synergistic benefits that will come. It gives the CEO of each company something to focus on as they while away the final days of their tenure, ideally walking away with a nice bonus on Merge Day. Much more difficult to build organically, innovate and at the same time keep the stockholders happy!

Posted by Bob Hail at November 29, 2006 6:35 AM

it is a nice article.

Posted by shagun012 at November 29, 2006 7:23 AM

We all know your feelings about mergers and I tend to agree with you. Small is beautiful and the best analogy I have in my life is when I worked behind the bar in a small English pub. When the customer looks you in the eye and says ‘This beer is crap’ there is nowhere to hide – you either deal with it for your customer or die. There is no ‘committee’ to help you solve this problem. In the bigger pub you can call a supervisor to deal with it. In my experience of big organisations there are too many places for managers to ‘hide’ and not enough up front eyeballing with customers. Managers are more often than not hidden away in their plush offices far away from the 'muck and bullets.' There are more shadows than people in big organisations but there is no hiding place in small companies.

Posted by Trevor Gay at November 29, 2006 7:44 AM

tom, you might find this view of interest -
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1616&CFID=114775&CFTOKEN=79928771

Posted by Dmitri at November 29, 2006 2:39 PM

Nice link, Dmitri ...

Posted by tom peters at November 29, 2006 11:54 PM

Tom, don't even get me started on that subject..... If someone had to buy Delta, I wish it could have been Southwest!

Posted by Val Willis at November 30, 2006 4:00 AM

Agree with Val. If Delta is to be acquired by anyone, let it not be USAir. They have some incredibly miserable people working in some very miserable processes. I gave up on them two years ago...

Posted by Kevin at November 30, 2006 3:52 PM

I've only been on six Delta flights, five of which were horribly late. The planes were dirty and the flight crew seemed depressed. Gate and ticketing people were wholly apathetic and seemed to revel in stupid rules. So how can it get worse if it's merged with another so-so operator? I've never flown USAir, but I have a hard time believing they can be significantly worse than Delta.

Posted by Mike at December 2, 2006 8:26 AM