27 February 2008

Don’t say its over already? DL+NW merger rumours.

I hear Dusty Springfield in the background singing – you don’t have to say forever just be close at hand….

It looks like things are not going well with the merger discussions at DL and NW. First it was the pilots arguing over the seniority lists. Now it is rumoured (totally unsubstantiated so far) that AF-KL may not be too happy with the current arrangement. However anyway you cut it – things are not rosy with the merger. Both parties on Tuesday put out notes saying “we want to but..”

We remain clearly unimpressed with the merger concept in general at this stage without a clear policy of opening up competition from external sources. Mergers cause less competition and higher prices in the airline market. Therefore by definition failing to meet one of the key criteria established publically by Delta. So any illusions of efficiency are not going to positively impact the consumer. If the US Administration (either current or next) wants to approve it – then they should do so ONLY if there are safeguards to open competition. The easiest way to ensure that is by removing the foreign restrictions and allowed 7th, 8th and 9th freedom traffic. Over at IAG they have been discussing this. Here is the podcast:



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