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Delta-Northwest Merger is Official, So What’s Next?

As you may have heard, the Department of Justice approved [[Delta Air Lines | Delta’s]] proposed merger with [[Northwest]] on October 29, and the deal was officially closed just a few hours later. Northwest is now a wholly owned subsidiary of Delta. This ends the six-month saga surrounding Delta’s quest to merge with Northwest and create the world’s largest airline, right?

Come on, you know as well as I do that the fun is just starting. As Delta CFO Edward Bastian told the AP, “It’s probably going to take us two years before we can really operate as a single carrier.” Now, if you’re a traveler, and particularly if you regularly fly Delta or Northwest, the thought of a two-year integration may scare you. Here are a few things to be aware of as the two airlines transition into one.

  • The situation will be a little confusing until the merged carrier gets its identity straight, but for the time being nothing much will change for customers. On its website, Delta writes, “Customers should continue to check-in and do business directly with the airline operating their flight just as they did before the merger. Delta will continue operation of the airlines’ separate Web sites, and, as well as the two airlines’ reservations systems and loyalty programs.”
  • Speaking of loyalty programs, your SkyMiles and WorldPerks accounts are safe, and you will be able to combine and integrate them into the new airline’s loyalty program at a one-to-one ratio. That said, the eventual mileage program created for the new Delta has yet to take shape.
  • Similarly, the issue of fees has not been sorted out. As our airline fees chart shows, Delta and Northwest have some pretty significant differences when it comes to fees, notably those for first-checked bags, which are free on Delta and $15 on Northwest. But the airlines also differ elsewhere, including fees for unaccompanied minors, pets in the cabin, seat selection (will Delta incorporate Northwest’s Coach Choice program?), and in-flight food.
  • Another important change will be the merging of the two airlines’ schedules. This will inevitably result in service redundancies on some routes, which will lead to cuts, but all along the airlines have claimed their complementary route maps will have little overlap, and therefore will require minimal trimming. We have a sense of what routes and hubs will see cuts, but only time will tell. Definitely keep an eye on this.
  • Generally, mergers do not happen seamlessly. Remember the US Airways-AmericaWest tie-up? Exactly. Matt Phillips at the Wall Street Journal’s Middle Seat Terminal blog sees five potential problems that could prolong the merger process and make flying on Delta less than smooth. Prepare yourself for a little chaos, and probably a few grumpy Delta employees (remember, this will probably be harder on them than anyone else).
  • What about fares? USA Today says ticket prices probably won’t change much as a direct result of the merger, though some rightly fear the merger will reduce competition in places and fares will rise as a result. My guess is that fares will go up here and there, but overall the merger won’t have a dramatic effect on prices because the airlines don’t overlap much. Along these lines, the carriers have said all along that no hubs will be closed, but many are skeptical about this as well.
  • Lastly, there’s still one more hurdle for Delta to clear: A lawsuit filed by passengers trying to stop the merger. I have no idea if the lawsuit has any chance of winning, but we’ll find out next month when the issue will be argued in court.

Like I said, the fun is just getting started. The most important thing you can do is stay abreast of the big issues like fares and fees, which I’ll report on here. Also keep an eye on your local airport to see how the merger is playing out in your backyard. And never hesitate to post a comment here with questions or your own observations.

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