When Delta/NWA merge, which base closes first?
 

Just curious what your thoughts are. Personally I think Memphis then CVG. I think Detroit and SLC grow. Some say SLC closes but I think it plays an important strategic role in the west.

Delta/AA could merge and stick a knife in both CAL and NW so that's a possibility. I was reading today where Delta has submitted to both for bids. They could kill two birds with one stone that way. CAL can't merge unless NW merges. Delta could trump two competitors like this. If NW does merge it frees up the option for CAL. Part of the post 9/11 deals. However CAL will have to somehow manage to come up with a crisp $100 bill to pay NW. It's called "The Golden Share".

This should probably have gone in the Mergers and Acquisitions forum instead.

And I will say Memphis.

You needed to have one more collumn....None. That is my vote.

i can tell you right now pinnacle is getting more routes and doing more flying for nwa every month. we now have a mem-cos route. we are also starting a mem-crw route. memphis is going no where. plenty of room to grow, little to no taxi time, and a very good location.

We don't know, but my guess, once the merger is completed, DL will close MEM as soon as is humanly possible. Its a small market, and probably unprofitable. And I disagree about it being " a very good location", it might be right now, but not after the merger, its too close to ATL. No way it remains open.

Probably what will happen to CLE once CO and UA merge. Small market, too close to ORD....

I have a hard time seeing CVG going anywhere. I believe it is Delta's second largest hub and they're making too much money off of dominating that airport. Just my two cents....

MEM has almost always been profitable. It may not have the international routes and tremendous volume as compared to DTW and MSP but with short taxi times, little competition on routes, and rare deicing the costs are low-revenue is high. Still have a feeling MEM will get the axe though even as I am a memphian based and living in mem. Fedex would love to truly have "fedex international" and not compete for slots during the day.

Cal can merge if NWA doesn't merge it just costs more than 100 dollars.

Poll
 

I second! Long term, who knows. I think they could support and even grow out of all bases.

I personally can't understand why airlines don't place more value on SLC. Its a decent sized city and growing fast, its closer to skiing than any other major airport, its got one of the best on time performance records and deals with snow better than any other airport.

And on top of that the people around SLC are just so friendly. Delta is growing it, but it doesn't seem like it gets the attention it deserves IMHO.

Things are good in MEM right now. But remember, in a merger all bets are off.

MSP, DTW, CVG -- all are located close together. Something has to give.

ATL, MEM. Same thing. No way Delta maintains both as hubs.

So....

DTW & ATL are locks to stay post-merger.

MSP - even money. Minnesota politicians could hold up the merger unless they get assurances of a hub.

CVG - shaky

MEM - odd man out, too small, few international routes, WAY too close to ATL SuperHub. MEM closes.

CAL can't merge without NWAs approval. The only way around that is if NWA itself merges. I doubt NWA would want them to merge unless with them.

None. Why close them just to let some LLC come in and snatch up flying when both carriers have full flights? Also there is NO way the DOJ would allow AA to merge with anyone. AA has already done its merging.

The problem with SLC, is that more and more emphasis is being put on international routes and SLC doesn't have the greatest location for that. SLC is good for the ski traffic, relatively short flight to ASE, EGE, and the like. LAX is a better choice to grow for an international presence on the west coast

We can merge or buy, the problem is we have to pay a large amount of money for that golden share. Cal would be a lot better off if the mergers did not happen and we were allowed to grow on our own at our own pace. The problem is that right now we are not large enough to compete against a combined DAL/NWA.

In airline terms, SLC is the MEM of the west, minus beal street.

I hate to say it, but MEM and DTW are not going to fair well in a merger. MEM is too close to ATL and DTW is a dying economy.

From what I've been reading in the USA Today, New York Times, Financial Week, and Yahoo finance CAL can't merge regardless of how much money it has. The only way CAL can merge is if NWA allows it, or merges itself. Acutally NWA doesn't even have to merge they simply have to start a merger. If the merger fails CAL is still free to do what it wants.

CAL could go to NWA with a pile of money and try to buy that ticket from them, but if NWA says no there's nothing they can do. This has been a common practice in corps. and goverments since the 1980s. It's effective and can't be circumvented. That one share, the golden share, has the authority to overide all the other shares. If the shareholders want to merge, and NWA says no, that one share makes their voice official.

Still is NWA's biggest and most profitable hub

The answer to the question depends on if you're talking about the mainline flying or regional. It could be two very different things. Personally, I don't think Memphis will close completely as a base. Rather, it will probably scale down with respect to the larger aircraft and become more of a regional hub. At the current levels, there just isn't enough originating passenger volume in Memphis to justify even many of the mainline flights that are there now. As Mesaba gets a good number of 900s operating there in the next year, NWA will probably scale down or completely eliminate DC-9 service out of MEM. But, if passenger volumes increase much above current levels across the industry, DAL/NWA will need to maintain another hub in the South for the regionals, being that Atlanta is already saturated. Both airlines operate a lot of CRJ-200s, which are weight critical in hot weather. In order to offer regional service in the South, NWA/DAL will need a base other than ATL where those planes can take off with lighter fuel loads.

I mostly agree except that NWA has been known to reneg on their promises in the past. What may happen is that NWA will promise MN politicians that NWA will keep MSP as a hub to ge the merger approved then after the merger, NWA/DAL management will say they can no longer keep MSP open as a viable business option and start to scale down MSP as a hub and eventually close it down except for XJ operations.

DTW and ATL will most likely remain as a hub for NWA/DAL.

MEM will probably close as a NWA/DAL hub but remain open for regional flying for XJ. Unliekely to open another hub different than ATL.

SLC is a wild card. I hope it stays open as a hub. Gives another pilot base other than DTW or MEM is a good thing. Since it looks like NWA has a lot of planned routes for jet flying into the west, I think it will stay open.

I think there will be a major reorganization of regionals if the merger goes through. NWA/DAL will not need 6 or 7 different regionals. Regionals owned by NWA and DAL will be eventually operated under a single holding corporation. It is already happening for XJ and Compass. NWA has formed a Mesaba Compass Holding Corporation to operate Mesaba and Compass.

Toiletduck,
It's painful for me to admit, but after reading your post I decided to look up Cal's financial statements concerning the golden share. I was wrong and you are correct.

Have you tried to lease gates at LAX lately? Good luck with that...

With traffic congestion rising at all large cities, it will be harder to consolidate all of your flying at a few large hubs. A really ideal hub needs several things...

- Location, for international launches and regional feed
- Lots of originating traffic (either a large city, or tourist destination)
- Plenty of available gates and arrival capacity.
- Good Wx (most airlines ignore this one)
- Minimal ATC issues.

PHX and LAS are almost perfect hubs...their only slight drawback is that it takes 50 minutes to get "feet wet" for trans-pacific work.

I don't think there will be too much hub consolidation with DAL/NWA other than in the midwest, because all that traffic just won't fit in ATL and LAX. SLC in the west has a lot going for it...it's only competitor might be SEA, but I doubt SEA has the capacity growth potential, and it's Wx probably isn't better than SLC.

Plus if DAL pulls out, someone else will move in to serve the ski country traffic. It would probably be UAL...since SKW owns the gates (in SLC and may outstations) and the airplanes it would just entail a quick trip to the paint shop for the SKW birds. I doubt DAL wants to hand all that to UAL on a silver platter.

I wasn't trying to be harsh or anything. I normally wouldn't have trusted what I read but it was in the financial section and they seem to be pretty on the ball. Those investors, not new columnist, know how to really pick things apart.

In the Wall Street Journal today they said that negotiations are very close to being finished. They are wanting approval from the pilot groups so they can avoid a USAir incident. If the pilot groups don't agree there is a large probability it wouldn't happen. They also said that inside sources had stated the no based would be closed. They specifically mentioned mem and ATL being close together but both still be profitable. They were saying it would make the merger easier to get the pilots approval if they guaranteed no base closing.

Actually PHX and LAS would be good hubs for transpacific flights. Remember the whole earth-is-not-flat thing... so really flying from LAS to Tokio is the same distance as flying LAX-Tokio (30 miles or so difference).

In fact, SLC is a much better hub to serve Asia than LAX. Apart from the congestion in LAX, SLC is closer to ALL Asian destinations than LAX is.

Although SLC is over 2 hours away from "getting your feet wet", it ends up being closer to Hong Kong, Bejing, Bangkok, Tokio, Seul and Singapore than LAX. (remember Seul is KoreanAir's hub....codeshare partner in SkyTeam with Delta)

Bottom line: as far as range considerations for transpacific flights, LAX/SLC/LAS/PHX are all more or less equal (with SLC being the best).

Now of course, anyone who has flown out of SLC knows perfectly well that this location advantage of SLC is more than nullified by the sh!ttiest and most inefficient ATC service on the planet.... so maybe SLC is not that good of an idea in the end.

The article also mentioned CAL and AA merging. I think that about covers every possible angle for CAL and DAL.

As AA already merged with AmericaWest, it is unlikely DOJ will approve another AA merger. Maybe years down the road, biut not anytime soon.

NWA/DAL merger will probably go through, as well as possibly UAL/CAL merger.

Hadn't heard about that one. I thought US Air merged with AWA and AA merged with TWA. Or are you confusing US Air's code (AAA) with American (AA?)

Remember SLC sits at 4200 feet, density altitude can soar in the summer time. Might be a problem for trans-oceanic-flights, which, by the way, Paris will be the first attempt at a regularly scheduled trans-continental flight out of SLC.

I really don't see SLC becoming a major international hub, although it does hold its value as a regional hub. It held out over DFW in the last round of Delta base closure debates. For the same reason, I don't see hubs in MSP and MEM posing a threat to SLC. SEA and LAX have different roles, primarily international gateways, not the domestic regional feed role that SLC plays.

If they were to put Delta's western regional hub in LAX, heaven help them, it would be worse than the F and G concourses in ORD.

I meant to say AA merged with TWA. Sorry for the confusion.