Pilots Wreck Delta (DAL) Merger With NWA (NWA), Again

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The fight over pilot seniority at Delta (DAL) and NWA (NWA) has threatened to kill a merger again. A strike by pilots would do substantial damage to the finances of a new company.

Maybe pilots are doing shareholders a favor. Merging airlines does not save on the rising price of fuel. Unions tend to use the deals as leverage to get better pay, or strike. Consumer service department mergers usually take months and drive consumers insane.

The merger may not matter at all. Jet fuel prices are so high and passenger traffic is expected to drop so low that all the major carriers are going to have to cut what costs they can to the bone. That will mean that routes will be eliminated and janitors who may not be in a union will loses their jobs. Senior management will get big bonuses, as usual.

Mergers aren’t an answer. Right now, there is not one of any kind. If the recession is deep and oil stays high, there will be another wave of Chapter 11 filings and it will not matter which companies merged and which did not.

Douglas A. McIntyre