From Deseret News archives:

Delta makes $17 billion deal

Published: Tuesday, April 15, 2008 12:38 a.m. MDT
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John Flynn, the Hugh B. Brown Professor of Law Emeritus at the University of Utah, notes that competition typically keeps fares down. With a merger, there's less competition.

"There's a whole range of factors that have to be looked at — quality of service, frequency of flights, things like that might suffer as well," he said.

Chris Lambert, owner of Destinations Inc. travel agency in South Jordan, has worked in the industry for 38 years. He recalls the most recent merger of US Airways and America West Airlines and the merger of Western Airlines with Delta that resulted in the Delta hub in Salt Lake City more than two decades ago.

"There's been more flights (out of Salt Lake City) and more direct flights, but really with that, Delta Air Lines charges a premium for direct service," he said. "Normally, if you're willing to go through the inconvenience of a connection, you can get a lower fare than a nonstop flight."

Delta and Northwest promise to honor each other's frequent flier miles.

"Our programs were already synced for the most part," said Anthony Black, Delta spokesman.

Lambert says the advantage to a frequent flier is "there will be a greater number of flights that you can use frequent flier miles on as far as combining the two airlines."

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But Lambert cautions the new airline will tighten the program.

"The word out there is that if all the people who have frequent flier miles cashed in, all of the airlines would go bankrupt," he said. "That's why airlines only allow a few frequent fliers on each plane.

"Usually, it's 25,000 miles or points to get a free domestic ticket, and 50,000 to get an international ticket. However, they may require 35,000 or 50,000 for domestic or 100,000 for international flights."

A flurry of mergers?

Delta, in a statement on its Web site Monday night, said the merger is subject to the approval of Delta and Northwest shareholders. It also needs to receive regulatory approvals.

"This will take several months to a year to complete," said Black, the Delta spokesman.

Flynn, the U. law professor, said President Bush's administration has cleared many mergers, and several airline mergers will follow the Delta-Northwest deal before the next president is elected.

"The Justice Department antitrust division has been friendly to a lot of mergers that would have been questioned in the past. They bring a different ideology to the (equation): That hopefully markets will sort it out," he said.

In any given industry, one merger often leads "others to merge in order to protect their turf," Flynn said.

Recent comments

The airlines are consolidating and shrinking in what will prove to be...

The airlines are dying | April 15, 2008 at 1:28 p.m.

If the airlines don't make money, they go bankrupt. Some pull out...

Pittakos | April 15, 2008 at 12:55 p.m.

@ Clarity for Clarity

This merger is NOT for your benefit. It is...

Get a clue! | April 15, 2008 at 11:47 a.m.

Image
Danny Chan La, Deseret News

Planes from Delta Air Lines and Northwest jets may soon be flying under the same name - Delta - if regulators and boards approve an agreement the two airlines announced Monday. Salt Lake City will retain its hub in the deal.

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