Here are some answers about the deal and its likely impact on airline industries.
How's does a combined Delta-Northwest airline stack up?
Together, the two carriers will form the biggest airline in the world. The combined airline has more than 1,000 planes, about $32 billion in annual revenue and carries about 175 million passengers a year, counting regional jet operations.
Why is the deal happening?
The answer depends on whom you ask. For years, many airline execs and industry analysts have been saying there are too many U.S. airlines for the industry to be consistently profitable. They contend consolidation is inevitable. But critics say the push for mergers comes from short-term investors, airline executives, consultants and others who are only interested in trying to enrich themselves. Merger speculation really took off in early January, as oil prices soared and Northwest and Delta shares hit post-bankruptcy lows. At that point, Northwest shares were down about 50 percent; Delta, 40 percent.
Frequent flier miles?
Don't worry about them going away. It's highly unlikely the combined airline will mess much, if at all, with frequent flier reward programs, not if it wants to keep its most loyal customers happy. Delta and Northwest already allow passengers to earn and redeem points on each others' flights.
What about fares?
One reason carriers want to merge is to reduce the supply of seats available on the market. Airlines hope that would make it easier for them to raise airfares. But mergers could provide opportunities for low-fare carriers to expand their operations, perhaps limiting the power of traditional airlines to increase fares. Right now, though, the big driver for fares is fuel. Most airlines are trying hard to pass on fuel costs through fuel surcharges.
From:Minnesota's Online News
