Obviously lots of questions are coming in about Delta buying Northwest airline, I'll try to keep this updated today with answers as they come in. Feel free to ask your own questions in the comments.
Are Northwest customers going to lose earned air miles now that they have merged with Delta?
-Anna Louks
No. Here's what the companies are saying on their new website: "Customers can already earn and redeem frequent flyer miles on both Delta and Northwest flights. Shortly after the deal closes, we will announce a plan for consolidating miles into one account, and because of the breadth of the new network, customers will have greater opportunities to earn and redeem miles. As with all of our operations, there will be no combination of frequent flyer programs until the transaction closes."
Does the Delta/NWA merger create a Monopoly? Is that legal?
-Jenni Thorpe
Jenni, it's certainly not a monopoly, as there is still a great deal of competition. But getting approval for this kind of a massive combination is still up for grabs. There seems to be a sense that the combo has a good chance of approval because there's no plan for hub closures and the route networks are complimentary. There's not a lot of overlap here.
What happens to the 445 Million dollars given to NWA when the Delta merger occurs?
-Greg, St. Louis Park
That's a great question. Minneapolis/St. Paul has been home to Northwest since 1926. Governor Tim Pawlenty says, he expects the new airline to abide by the terms of those loans. The airline hasn't explained how they plan on keeping headquarters here, since they've stated Delta will be headquartered in Atlanta. Expect the airline to keep some "management" jobs here, and try to claim that they have a headquarters here. Perhaps the HQ for freight or training or something like that. Richard Anderson told the Star Tribune, "'We think we can fulfill the spirit of those [MAC] covenants.' He anticipated that airline executives will meet with the MAC over the next 18 months to renegotiate Northwest's agreement with the MAC."
10:00am update: If Delta maintains its headquarters in Atlanta.... and allegedly has some "executive offices" here, to what state does Delta pay its property taxes? What about airport property?
-Melissa Cohen
Delta would still pay Minnesota property tax on property it owns in Minnesota. There is real money involved here. In my quick search, I found that the airline industry paid $2.2 million in property tax for airport property in 2001, and $8.8 million in an "Airflight" property tax. None of that would change, as far as I can figure.
10:55am update: Why are they calling the Northwest-Delta deal a merger and not a takeover? It seems that since the name will be Delta, the headquarters will be in Atlanta and the company will be run by the current Delta CEO and the board will be made up of a majority of Delta people, that it resembles much more of a takeover. -Beth Nelson
Beats me, Beth. It's a takeover. The Associated Press headline says "Take over." WCCO.com is calling it a "merger." Perhaps Minnesotans think "merger" sounds nicer, because then we're not the little guy being swallowed up. But do the math: this is a takeover. Terry Trippler agrees with me.
Update 1:30pm: how does merging northwest and delta reduce the cost of fuel for the combined companies. all of the airlines are blaming fuel costs for their financial problems, but won't the same number of planes and flights take the same amount of fuel at the same cost? -Doug Boser
It wouldn't necessarily cut fuel costs, although the increased size of the airline should give them more bargaining power in buying fuel. The high costs of fuel are forcing airlines to find other ways to cut expenses. Delta today said the merged airline "could better utilize its hundreds of airplanes and generate $1 billion in new annual revenue and savings from slashing redundant operations."
