17 January 2008

The year is starting with a bang... Thoughts on DL-NW + AF/KL

Those of you who are regular readers know that I am personally opposed to the idea of a DL+someone else merger. I just cannot see the logic in the near and probably long term for such a Union.

So for the next 2 weeks (that's DL's time line) actually 3 months is more likely! We are going to be subjected to the constant war of words between the protagonists.

As we noted in our 200 predictions - the market in the USA is ripe for investment from EMEA (that's both Europe and the GCC states). Finally someone else agrees - the WSJ today described the first thing that Richard Anderson did after leaving Friday's Board Meeting where he secured the OK to negotiate with NW and UA. Where did he go? Paris.

AF/KL holds the key card in this conversation. They are the biggest player in the world and their JV with DL and NW separately makes the union a good tie. HOWEVER I stand by my statements earlier. This is not good for the two players. NOR will it be good for the customers and staff.

As for the alternatives - UAL is a basket case and no one should touch it.

But the impact of the DL+NW merger will be far reaching and not necessarily good. Fortunately it seems that Senator Oberstar seems to agree with me. Fortunately he comes from Minnesota so he has a vested interest in not seeing it happen! Oh yes he is a Democrat which almost counts for something these days.

I stand by hope that this will be resolved not by a full merger but by a combined alliance/JV which makes much more sense.


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