Mergers Possible?

Many analyists agree that the US airline industry is badly in need of consolidation. If this is the case, which it very well might be, which airlines would merge? Here are the combinations that I see might work. Keep in mind that many of these airlines are in no financial shape to merge, and even if they were, airline mergers have usually not gone off well in the past (with a few notable exceptions). Readers out there are welcome to post comments/criticisms about my ideas. So here goes:

1) Northwest and Delta
There are several advantages with this merger. First, they're partners already, both in the SkyTeam alliance. Secondly, their international networks complement each other very nicely. NW is strong in the Asia/Pacific region, while Delta is strong and adding routes in Europe and Latin America.

Domestically they have a bit more overlap. Northwest has hubs at Minneapolis, Detroit and Memphis while Delta has hubs at Atlanta, Salt Lake City, Cincinatti, and New York-JFK. The Memphis hub would most likely be merged into Atlanta while Cincinatti would be merged into Detroit. The route network has quite a bit of overlap. Both NW and DL are strong in the West (with DL probably a bit stronger) and DL is stronger in the East and South. Northwest is very strong, however, in the Midwest and into southern Canada.

The major downside to this merger would be the aircraft. NW operates an aging fleet of DC-9s, DC-10s along with newer 757s, A320s and A330s (not to mention the Boeing 747-400). DL, on the other hand, has a varied fleet, with three kinds of Boeing 737s, MD-80s and -90s, 757s, 767s, and 777s. This is where it gets complicated! I believe that the merged DL/NW would dump the DC-9s, 737s, MD-80s and 90s, and also the 777s (only because DL has less of them than NW has of the A330s).

2) United and Continental
United has large hubs at Chicago, Washington-Dulles, San Francisco, Denver, and Los Angeles. Continental has large hubs at Newark, Houston, and Cleveland. There's overlap at two hubs: Newark/Washington and Cleveland/Chicago. Cleveland would most likely be moved to UA's massive Chicago operation, but I really can't tell if a combined airline would keep either both Newark and Washington or choose one or the other (and if the latter, which one?)

The international route structure would complement much like DL/NW: United is strong in Asia/Pacific/Australia while CO is strong in Europe and Latin America. Domestically it works too; UA is strong in the West and Midwest while CO is strong in the East and South.

In terms of aircraft, there's a bit more overlap but not much. UA flies variants of the 737, 747, 757, 767, 777 and A320; CO flies the 737, 757, 767, 777.


Now would those mergers happen? Maybe. Again, airline mergers are rarely successful. But they can work, as demonstrated by the US Airways/America West merger.