USA320Pilot
Veteran
- May 18, 2003
- 8,175
- 1,539
Why US Airways Shunned Northwest for Delta
- Thread starter USA320Pilot
- Start date
ClueByFour
Veteran
- Aug 20, 2002
- 3,566
- 37
The short take:
Parker does not know how to run a competitive airline, only how to shrink capacity with the help of a BK judge. DL allows US to monopolize the crap out of the east coast, whereas NW, despite turning US into a truly global carrier, does not permit for the "shrink it and drive up fares on hostage monopoly markets" as much.
One. Trick. Pony.
Parker does not know how to run a competitive airline, only how to shrink capacity with the help of a BK judge. DL allows US to monopolize the crap out of the east coast, whereas NW, despite turning US into a truly global carrier, does not permit for the "shrink it and drive up fares on hostage monopoly markets" as much.
One. Trick. Pony.
CynicalResAgent
Veteran
maybe I am way off but I thought DL shed their pensions and NW did not.....also DL is less unionized. NW on the otherhand probably has the worst labor relations in the industry.
I think those are the main reasons why.
I think those are the main reasons why.
gabby
Senior
- Jul 24, 2006
- 306
- 48
I believe Mr. Parker is more interested in Wall St. Then running an airline. If he can get the stock to climb he makes his money. Who cares if the airline is imploding when you have short term investors.
DL has shed only the pilot pensions and have given them agreements of $$ incentives when they did so...Parker's elimination of overcapacity in the DL/US route system will only bring on the Southwests, Airtrans & JetBlues to fill the voids...so in essence He's not accomplishing anything in the long run except gaining SA & European routes. NW would be a better fit due to Asian routes, equipment, no major loss of hub structure, as well as keep the great labor relations of both airlines.
flyJOE
Advanced
The acquistion of Delta will effictively have US Airways taking out their biggest competition and no, it's now Southwest.
Now taking a different point of view, you'd have to say the labor issues with NW are a major reason why US wouldn't make a play for NW. The employees of NW are so distrustful of management, not that you could blame them at all either. I think it's pretty safe to safe NW's unions wouldn't be thrilled to say the least of US taking over.
nycbusdriver
Veteran
Sounds like Herb Kelleher may make things a bit easier for Parker to do the deal. Saying that SW wants some assets so they can enlarge their presence on the east coast will make many cities salivate at the thought that they could keep Delta, get rid of USairways and get Southwest in its place. Kelleher sure pulled a lot of wind out of the sails of those who decry the whole thing as anti-competitive.
wings396
Veteran
- Aug 20, 2002
- 3,672
- 1,122
You are forgetting one item here, and that is what will be done with the A/C that are left over when the overlapping routes are consolidated. I would assume that they would be used to expand in other parts of the country that currently are not served that heavily. This alone could fill most of the area that NW serves, and some others too.
It would be a foolish waste to buy DL, only to trim the combined carrier down to what DL currently is.
h34r:
EyeInTheSky
Veteran
nycbusdriver,
Don't kid yourself SWA coming out in support of buying parts is strictly strategic. I think their aim is to drive up the price of the shuttle that American really wants. I think they could buy some things, but, ultimately I think their goal is to up the price of pieces to hurt their competitors. Hey, works for US Airways, they get top dollar.
Later,
Eye
whodoiworkfor
Member
The left over aircraft from consolidation will be shed just like the employees. This is a BAD, BAD thing for US. Do not let the rosy picture Dougie paints fool you.
psakid
Newbie
And your Rosy picture is to do nothing and wait for someone else to strip US Airways of its assets at best or let it die a slow death. Your support for the up-side is overwhelming.
As long as there are investors willing to play the game, then GAME ON.
markkus757
Veteran
- Jul 26, 2004
- 598
- 1
This acquisition is all about getting capacity reduced and picking up the routes Delta has been developing in BK. If you notice what Delta has been doing, they have transferred a lot of seats from domestic markets to the International side and have been very profitable doing so. I can honestly see US just keeping the widebodies and dumping the rest. SW will take the production slots for the 737s and US will dump CLT. No O&D means SW can have this as well. I don't think they fear Airtran in ATL. Competition with them will be manageable. The interesting overlap will be in the NE at BOS, NYC, and even WAS area airports. That's where they can potentially make a good chunk of money auctioning off assets and maybe even funding new A/C like more 190s. This is going to be the bread and butter aircraft on the east coast for US. Gone are the days overcapacity in order to compete with the likes of SW and B9. US is probably more than willing to share markets with them and attempt to skim the premium traffic. It's a shame they don't have the first class product to really take advantage of this. They could really mop up.
L
luvn737s
Guest
Clue- When one airline raises their prices only to recind it because the other airlines don't go along, that tells me the industry is far from competitive. With the exception of WN (and even they are to a far lesser extent), all the airlines are offering the same commodity. The barriers to entry are so low that should any one region feel they are being gouged, there is some other "white knight" (i.e. opportunistic pig) more than willing and able to come in and offer lower fares which of course will be matched.
You can't assume airline economics is like any other discipline. 1)They don't care so much about profit as stock manipulation, 2) They are unable to figure out what their product is worth and how to price it and 3) They assume their biggest expense is labor and that it can be reduced whenever they wish by cutting back the airline to the point that it's revenue cannot sustain itself, then filing for bankruptcy.
I don't think that mandating that an oligopoly remain distributed among some arbitrary minimum number of players serves anyone, especially when they are cranking out a non-differentiated commodity.
Charlie_Tuna
Veteran
- Sep 29, 2005
- 661
- 0
If the trick works who cares?
Are you advocating rather then use a trick that worked or at least appears, To try something else that has not worked before and may or may not this time?
