From the Airline Observation Deck
With ongoing consolidation talks between the two giant air carriers, most onlookers are predicting a formal merger in which Delta acquires Northwest. Such a move, however, raises economic uncertainties that affect area communities, workers and airline passengers.
Here's what industry observers and government officials are saying. — Kevin Featherly
"An airline with a broader national and worldwide route structure under one name and corporate structure would be in a strengthened position, and costs would ultimately be saved through eliminating overhead and having greater purchasing power with suppliers."
— Ray Neidl, an analyst for Calyon Securities
"Jim [Oberstar] was asked his response on the merger earlier in the week, and he said, 'Hell no.' "That's going to lead the other carriers to look at their own mergers, in self-defense. [He] doesn't feel that large, consolidated operations like this are going to serve the traveling public."
— John Schadl, spokesman for Eighth District U.S. Rep. Jim Oberstar, the powerful chairman of the House Transportation and Infrastructure Committee
A merger is "a major issue" [for Minnesota's economy]. "We should all be concerned."
– U.S. Sen. Norm Coleman, who said he is monitoring the situation closely and has been in frequent touch with Delta CEO Richard Anderson, who led Northwest between 2001 and 2004
"I frankly think it will be a very bad outcome for consumers. There is a lot of urgency, which has been fanned over four years of consolidations. Essentially, it's wink-wink, nod-nod, let's cut capacity. Let's improve our pricing power. Let's hit the gouge button a couple of times, just for effect."
— Robert W. Mann, president of R.W. Mann & Co., an airline industry analysis and consulting firm in Port Washington, N.Y.
"I think now as it has moved along, it is more or less a merger [that is shaping up]."
— Terry Trippler, a Twin Cities-based aviation analyst, who is convinced that a merger would mean that Delta buys Northwest.
"A merger is involved in providing less, not more. These two airlines very likely, I think, will be putting something together that . . . will be bigger than it was before, not smaller. Oberstar would be toothless from that point of view, and he'd probably back off then, anyway."
— Mike Boyd, a noted aviation consultant and analyst based in Denver, Colo., who believes the final plan could be a mega-alliance, similar to the 2004 Air France-KLM deal, rather than a merger.
That Center of the American Experiment report on the Minnesota economy? It’s politics, not economics37 comments