Will the Friendly Skies Get Friendlier with Delta-Northwest Merger?

Delta and Northwest Airlines are close to completing a deal that would create the nation’s largest carrier. Will this merger lend to creating an industry that will increase pricing and stifle the competitive options for travelers?

As stated in the Honolulu Advertiser, one of the biggest factors driving renewed talk of consolidation has been the sharp increase in fuel prices, among the industry’s biggest costs. Jet fuel costs have surged along with the price of oil. The higher costs have made exploring other fuel options more immediate. Virgin Atlantic announced today it will be using a biofuel blend in a test flight this month from London to Amsterdam.

So what could this mean to the Hawaii travel market? Delta holds a direct flight from it’s Atlanta hub to Honolulu, with Northwest also offering a direct flight from their Minneapolis hub to Honolulu. If the merger is approved, will both popular flights still be offered to Hawaii visitors?

Other challenges in the merger still to be negotiated, are which CEO would run the merged airline and where would they consolidate their headquarters? Delta is home to the world’s busiest airport with it’s strong hub in Atlanta.  The Minnesota Gov. stated in the paper “that Northwest made financial commitments to keep it’s headquarters and hub in Minnesota. Northwest would have to give up $215 million in financial incentives between now and 2020 if it moves its headquarters out of Minnesota.”

There is growing speculation that United and Continental Airlines could join forces as possible partners if the Delta-Northwest merger is approved. (Posted by CM)

Add comment February 8th, 2008