US Airways, Delta to merge?

By | November 15th, 2006

So what does the proposed merger between US Airways and Delta mean for passengers?

If this $8 billion hostile takeover goes through, US Airways will essentially gobble up bankrupt Delta, but take on its name. It’ll be a lot like the America West-US Airways merger, where America West acquired the moribund airline but took on its name.

The “new” Delta will have what US Airways CEO Doug Parker calls “merger synergies” to the tune of $1.65 billion. What that means, for those of us who didn’t go to B-school, is that where both airlines now compete or double-up on resources (such as airport terminals) a single, merged airline will be able to save money.


Part of that calculation surely is how much extra money a “new” Delta would make when routes that Delta and US Airways once competed on are combined. And that’s really the bad news for passengers: We may be paying more for our airline tickets on certain routes as a result of this merger.

But Delta frequent fliers may also be breathing a sigh of relief this morning. Their SkyMiles miles are safe. Their airline will keep flying.

Delta employees, on the other hand, may not be feeling so warm and fuzzy. They watched their colleagues from the “old” US Airways be assimilated into the former America West, and let’s just say that not everyone was happy with the way that worked out. If you want to start an argument with an ex-US Airways person, just bring up the subject of seniority.

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Bottom line: this deal will save Delta, but at a price. A higher price than US Airways claims, probably. Another major US Airline — US Airways — will disappear from the skies permanently.

I, for one, am curious to see how this will play itself out.



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