[Mad Doggy Dog]

I have to disagree with this article and play devil's advocate for the NW/DL merger. And I did stay at Holiday Inn Express numrous times while flying domestic.


The problem with the airline biz lies more on the revenue side than the cost side. Consolidation reduces cut-throat competition which will bring increased pricing power. Worked pretty well for the oil companies and banks recently. Might even work for pilot union pricing power too.


SIZE MATTERS.....Despite what many men tell their ladies. High yielding business customers are where the money is at, especially on international. And frequent flier miles are like crack cocain to these folks. You want them hooked on your airline.


Besides, it's hard to make money if your primary business is flying families of mouth breathing walmart shoppers to FLL for vacation. Southwest, and their peers, have very low profit margins.....outside of revenues generated from gambling on fuel hedges.


Also, keep in mind, a merger between DL and NW is effectively a merger between DL, NW, Air France and KLM....and Alitalia. This will make for the world's most powerful network with the most complete global coverage. And we compete on a global market! On a related note, keep in mind that with the US dollar going down the toilet, we are becoming the new India. US based airlines are the low cost carriers among the developed world. Thank you, come again!


But what about cost?


First of all, cost savings can be realised by canning the upper management structure from NW which seems to have been suffering from cranial frostbite for the last few decades. Even if we kept them on the payroll but locked them in a dark room, we would still be better off.


Most importanlty, the days of cheap oil and cheap capital which, [combined with management's target fixation on cheap labor,] lead to the explosion of growth for 50 seat RJs, are over. These aircraft now have incredibly high unit costs. Re-allocating them..........many to the desert......or to short routes, and replacing them with 737-700s or A-319s will yield tremendous savings. Look for eventual hub consolidation....despite what they told the regulators in order to get the gubmint to approve the deal. CVG will still have a few token flights to business centers and other hubs, but will be greatly downsized. Same for MEM. A Harley Davison exec flying from MKE to LHR [London Heathrow] can do so more efficiently if he rides a A-320 through DTW as opposed to taking a CRJ through CVG or DTW as he does now. There will still be a market for 50 to 76 seat RJs, but it won't be on trunk routes.


Size still matters. Economies of scale lead to competitive advantage.


Hub consolidation: Did I mention that DTW kicks the snot out of CVG as a hub? Well it does! DTW has much higher capacity, is a much nicer facility, has room for easy expansion, and has a de-ice "car wash' run by people who've actually seen snow. DTW has a sushi bar run by Japanese people. DTW has 2 coney island diners run by Greek people. And coney island style chili blows away the Skyline style chili hands down. CVG has mostly really bad fast food run by hillbillies or carnival folks. DTW, which 6x times larger than CVG, has good origin and destination traffic. DTW is the world mecca for manufacturing technology. CVG is the mecca for toilet paper. Nuff said. I'd go off on MEM but I do not want to get the ghost of Elvis upset.


But what about the pilots? Delta is still hiring about 70 pilots a month and needs to do so for the rest of this year alone. NW still needs over 300[?] pilots this year despite their parking of the diesel 9s. Delta has 777s on order as well as 737s. Some used MD-90s with very low miles driven by little old ladies to church only on Sundays may be coming our way too. NW is getting 787s and more Airbuses.


Will there be mass fuloughs among small jet providers? Doubt it! Even if they shrink in size, pilots are still leaving for jobs at major airlines, foreign airlines, corporate jobs, etc.


My gut feeling is that a deal will soon be reached regarding DL-NW pilot seniority list integration, and the merger will soon come to fruition.....


.......Whether we like it or not.




One more thing: RED WINGS RULE !!!!!!!