Friday, October 31, 2008

Delta Looms Large

On Wednesday, antitrust regulators signed off on the proposed merger between Delta and Northwest Airlines. Although integration will proceed slowly as ticketing systems, employees, and corporate cultures differ, "the new Delta" will ultimately become the world's largest airline.

As part of the consolidation, Delta is also expected to:
  • Remain with SkyTeam;
  • Charge extra for exit row seating as well as some "preferred" window and aisle seats, adopting a practice already in place at Northwest; and
  • Neither scale back any of its airport hubs nor lay off any of its front-line employees--promises made to the Department of Transportation to get approval for the merger.

As I explained some time ago, the acquisition of Northwest will also return Continental Airlines to full autonomy. In an interview with the St. Petersburg Times, Continental CEO Larry Kellner mapped out a few strategies that Continental sees as keeping it successful in the new market. Among them, Continental plans to:

  • Continue serving complimentary meals at mealtime, the only U.S. carrier to do so; and
  • Join United and U.S. Airways as a member of the Star Alliance in early 2009, pending regulator approval.

In the interview, Kellner was also asked why Continental--with its strong customer-first focus--decided to impose a $15 checked baggage fee after resisting the move for so long. Kellner's response? People weren't willing to change airlines over the fee, so Continental wasn't seeing any reward for not charging it.

Passengers, take note: If you aren't willing to show preference to an airline that doesn't charge a fee, airlines won't resist fee increases.

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