AF and DL: Creating the First Global Megacarrier?

[i_disa]

riporto l articolo apparso sul forum di airliners.net.l ho lasciato in inglese in modo da non alterarlo con una "traduzione letterale" di un qualsiasi programma.

AF and DL: Creating the First Global Megacarrier

There has clearly been a lot of talk about mergers in the anticipation that the long-awaited consolidation of the US airline industry may finally be upon us as DL makes the first in moving to merge with NW. There is a lot of history that is going into what is happening today. The positive outcomes of a merger like DL-NW are also being neglected with talk of what will be cut or closed.

First, DL’s history with Air France goes back several years to the point when Air France (rather belatedly) realized they needed to build a US partnership. DL was fresh off the failures of the SR/SN/SQ partnership and other European carriers had much more highly developed partners with US carriers. Air France narrowed its choice of carriers to CO and DL who were competing to be AF’s partner. DL obviously was selected.

At the same time, AF was transforming itself from being a bloated government owned company into an aggressive global power. Quick to make up for lost ground, it seized the lead in becoming the first large European carrier to successfully buy another large Euro flag carrier with its purchase of KLM. But, the AF-KL relationship could not be fully cemented as one because the US recognized separate countries in its aviation treaties; the concept of the EU was not recognizable to the US and thus AF and KL could not fully merge without losing their rights to operate to the US which were granted to the airlines of France and Netherlands, not to the EU.

The AF acquisition of KL created another complexity – or opportunity. NW and KL had a long-standing relationship, the deepest and longest-lasting between any US and European carriers. Despite attempts for the AF-KL dual relationship to apply to both DL and NW as AF and KL’s US partners, the US DOJ was dead-set against allowing 2 US airlines to participate in a commercial relationship with foreign carriers that might allow the two US airlines to discuss items such as fares and schedules which two competitors should not be able to discuss. The attempts at reapplying for fourway antitrust immunity involving AF-DL-KL-NW have grown silent as the focus has clearly moved to a full fledged merger on the US side.

While the AF acquisition of KL has gone better than a lot of people originally expected and KL continues to operate as a successful separate carrier, there are clear costs to the relationship that AF would like to eliminate, including the dual managements which are necessary to prove that AF and KL are separate companies, at least from an operational standpoint. While KL’s operational future cannot be known for sure right now, it is clear that a DL-NW merger would open the possibility for AF to deepen or tighten its relationship with KL.


While other European megacarriers are scouting their prospects in an Open Skies environment, AF has moved quickly to assemble a megacarrier on the European continent by committing billions of Euros in acquisitions.
AF’s determination to become a global powerhouse should be obvious by its determination and success so far in being selected to acquire Alitalia. It isn’t a coincidence that DL is already the largest foreign airline in Italy, making AF’s ability to turn AZ around much easier.

Delta has been no less determined to become a global carrier, desiring to leave behind its roots in the South to become a megacarrier on the world stage. While its early years after the Pan Am transatlantic acquisition were rocky, DL managed to maintain a position as the largest US carrier to Europe based on its large continental Europe operation and to build a fairly significant Latin American presence on its own. DL recognized it still needed to make JFK work and they also needed to develop a presence in East Asia where their early efforts from PDX and LAX were interrupted by the economic downturn of 2001 and 9/11. DL’s subsequent bankruptcy delayed but did not interrupt its intentions to grow again. DL has never lost sight of its desire to become a global megacarrier, though.

It seemed evident from the beginning of the Skyteam alliance that the CO-DL-NW three way relationship was not sustainable. Three very different cultures and types of products would be hard to integrate under ideal situations but the competitive nature of the US airline industry makes it necessary for CO, DL, and NW to be archcompetitors as well as partners, making it harder for AF to get what it wants. The clear ideal is for there to be a one to one relationship between European and US alliance partners.

Consolidation today is as much about building a global airline as it is about being to manage the domestic business in such a way so that US airlines can win. US airlines have trailed their global competitors in profitability for most of the post-deregulation period even though the US is the world’s largest economy and the largest air travel market in the world. US airlines need to be able to compete effectively in the global aviation market which is upon us or revenues will be shifted away from US to foreign airlines.

DL-NW is necessary in order for AF to cement its place in the US market but also so that DL can be positioned to compete effectively in the global aviation market place.

The US airline industry is not financially prepared to invest what is necessary to compete in the global marketplace. The four carriers that filed for BK this decade have sustainable balance sheets now but would not remain viable if they took on the levels of debt necessary to invest in their businesses to the levels that are needed. AA and CO have been able to sustain or improve their financial situations but they are not delivering the levels of profitability that the other four carriers are. For the first time in at least a decade, the network carriers are now posting financial results that are superior to what the LFCs are posting. The entire US industry needs financial stabilization and part of the formula has got to include reducing the number of competitors in the marketplace. It is way beyond sustainable for the US to have six network carriers, several more nationwide LFCs, and several more smaller network and LFCs. There is no other industry that is as fragmented as the airline industry and yet which has failed to consolidate. Consolidation is a necessary tool to allow businesses to effective compete. Maintaining dozens of airlines in the US might be attractive for the consumer but it is not sustainable for the industry. Further, the architects of deregulation predicted consolidation would be necessary and would have taken place decades ago. The last major round of consolidation in the US airline industry occurred nearly 20 years ago.

DL needs AF in order to complete its aspirations of being a leading global carrier and AF needs DL in order to gain a permanent foothold in the US market. While it is to be expected that relationships between other foreign and US airlines will strengthen, DL and AF seem to be most willing to build the global megacarrier that will be necessary to compete in today’s global marketplace. While AF and DL will maintain separate identities, the level of cooperation will be so close and the financial ties so deep that the carriers will be as close to one as they can be while remaining separate companies. The fact that AF is willing to cement its relationship with an equity stake in the new DL validates its intention to be the driving force behind the global megacarrier.

So what does AF/DL need to do to better compete as a global megacarrier? For years, US carriers have been satisfied to serve far fewer global destinations than their European counterparts, including funneling traffic to/from their European partner hubs. In Europe, DL has already seen the value it can add to a European partner by flying to dozens of destinations beyond the partner’s hubs. CO’s value to Star will be equally as significant. However, there will continue to be opportunities to develop relationships, esp. to/from former French colonies and French strongholds. It is even possible that AF might be the operating carrier on routes between the US and countries which are hostile to the US but which can sustain nonstop service to the US. Coordination and corporation in Latin America will allow DL to grow with AF’s support (since many Latin airports do not have the infrastructure necessary to support widebody flights to Europe).

The greatest opportunities exist across the Pacific and it is there that DL will rework and build upon NW’s Pacific operation to transform it from a hub to hub based to a hub and spoke network. DL’s 777LR and NW’s 787 orders (both of which will arrive before any other competitor’s orders) provide a powerful opportunity for DL to penetrate deeper into Asia from its (combined DL/NW) interior as well as coastal hubs. The 757 and 767 provide considerable potential to open new markets across both the Atlantic and Pacific. DL’s LAX facility will become much busier using the equity that NW has in Asia to develop new routes along with NW’s extensive intra-Asia route authority. The long awaited replacement of DL’s JFK facility will now open. AF, as a stockholder, will tap into its vast resources to build a combined DL/NW into a superpower from which AF will derive a share of the profits.

A huge network will not be sustainable if the US airlines do not have a highly competitive product. DL is building on CO’s successes as having a quality product that is competitive with global carrier offerings by enhancing the product across its system. Such investments are expensive but absolutely necessary if the US airlines are to regain a leadership position in the US industry. For too long, US airlines have maintained market share by virtue of their control of the domestic marketplace. As foreign airlines tap into the US domestic market (such as LH has done with B6), it is no longer a given that US airlines will be able to keep their international traffic on their own aircraft if a city is not served by a foreign carrier.

For years there have been those in the US who have called for a complete lifting of foreign ownership limits in order to allow capital to flow into the US industry. I am certain that the US airline industry has argued that it needed the opportunity to restructure itself before allowing foreign capital to flow in. Without restructuring, foreign airlines would simply be buying into an unstable and unsustainable US airline industry. If foreign investment flowed into the US industry without consolidation taking place, overcapacity and intense competition would continue, destroying foreign investment just as domestic investment in the US airline industry has been destroyed.

The formula for a turnaround of the US airline industry lies in blending all of the ingredients proposed as solutions for the US industry: foreign investment, consolidation in the domestic market, creation of US carriers with true global coverage, and investment in the US airline product such that it can be competitive in the global marketplace. AF and DL understand this vision and are moving to create a global aviation superpower built on these principles. I can only hope that AF/DL is the first of several enhanced relationships such that US airlines regain a leadership position in the global aviation marketplace

cosa ne pensate?

[araial14]

E poi boh,a me queste supermega fusioni non mi sono mai piacute troppo...perchè vengono eliminati marchi e livree storiche...

Quoto!

[i_disa]

E poi boh,a me queste supermega fusioni non mi sono mai piacute troppo...perchè vengono eliminati marchi e livree storiche...

Quoto!

in effetti, è la verità. la fusione tra DL e NW potrebbe essere ufficializzata in settimana stando ad una notizia riportata dall ANSA

[Fabri88]

E poi boh,a me queste supermega fusioni non mi sono mai piacute troppo...perchè vengono eliminati marchi e livree storiche...

Quoto!

Bi-quoto

Tra un po' si fondono pure Easy-Jet e Ryanair...
Già me la vedo la fusione per creare la Regina delle Low-Cost (operante magari negli "Open Skies")

[araial14]

Tra un po' si fondono pure Easy-Jet e Ryanair...
Già me la vedo la fusione per creare la Regina delle Low-Cost (operante magari negli "Open Skies")

Come ipotesi non la vedo così lontana...purtroppo

[i_disa]

riguardo alle modalità di fusione non si sa niente, almeno per il momento. per il matrimonio DL NW non credo che si possando essere grossi problemi visto che fanno entrambe parte di sky team. la situazione è un po piu complessa tra UA e CO: una è fondatrice di Star Alliance, l altra è una delle ultime entrate di Sky Team. secondo voi quel potrebbe essere lo scenario se UA e CO si fondessero veramente? credo che una delle due debba lasciare la propria alleanza

[i_disa]

un punto d'incontro ci sarà sulel flotte di DL e NW: il 787. NW l ha gia ordianto e dovrebbe essere la prima compagnia statunitense a riceverlo e su alcuni forum statunitensi girano voci che DL a breve annuncerà un ordine per il 787. purtroppo non ci sono conferme

[i_disa]

dal portale

DELTA E NORTHWEST TORNANO AL TAVOLO: FUSIONE PIU’ VICINA

La fusione tra Delta e Northwest torna agli onori della cronaca dopo alcune settimane di silenzio. La ripresa delle trattative è arrivata in concomitanza con l’imminente annuncio dei risultati del primo trimestre, che si annunciano tutt’altro che positivi e con la notizia dei primi fallimenti tra le compagnie aeree (tre soltanto nei cieli Usa). Secondo alcune indiscrezioni riportate anche dal Wall Street Journal sembra che si stia ammorbidendo anche la posizione dei piloti, che avevano bloccato dii fatto la prima fase delle trattative, e alcune novità potrebbero arrivare già nella prossima settimana.
(ttgitalia.com)

[MikeAlphaTango]

Le mie perplessità su una fusione DL-NW erano basate più che altro sulla flotta:
Sul lungo raggio NW usa 747-400 e A330 mentre la DL usa 767/777
Sul medio-corto raggio NW usa la famiglia A320 e l'ormai vecchissimo DC-9(che immagino sarà il primo ad essere ritirato e anche alla svelta) mentre DL usa 737 e MD-88.
Giusto per quanto riguarda la flotta regional invece si trova una commonality con aerei della famiglia CRJ ed Embraer per Delta Connection e NW Airlink

Beh, giusto per fare un esempio non troppo lontano da noi basta dare un occhiata alla flotta di AF-KLM:
Sul lungo raggio: 747, 777, 330, MD11
Sul medio: A320 & C., 737
Sul corto: chi più ne ha più ne metta!

Non credo che, per quanto riguarda la fusione DL-NW debbano nascere troppi dubbi circa la composizione un pò troppo "variegata" della flotta

[Maxlanz]

Tra un po' si fondono pure Easy-Jet e Ryanair...
Già me la vedo la fusione per creare la Regina delle Low-Cost (operante magari negli "Open Skies")

Come ipotesi non la vedo così lontana...purtroppo

Sono piuttosto perplesso su questa ipotesi di fusione.
Quale sarebbe delle due ad adattarsi allo standard dell'altra visto che che Easy non è così "aggressiva" come Ryanair?

Ciao
Massimo

[i_disa]

NOZZE DELTA-NORHWEST, SI RALLEGRANO AIR FRANCE-KLM
(ANSA) - PARIGI, 15 APR - Air France si rallegra dell'accordo raggiunto dalle alleate Delta e Northwest in vista della loro fusione. Lo ha dichiarato una portavoce del gruppo. Air France-Klm, che si e' sempre dichiarata favorevole alle nozze delle due compagnie americane che fanno parte dell'alleanza Skyteam, fara' commenti piu' dettagliati nel pomeriggio con un comunicato. Il gruppo franco-olandese ha anche indicato in passato di essere pronto ad appoggiare il progetto finanziariamente con un investimento di 750 milioni di dollari. Fonti vicine al cda di Delta hanno pero' dichiarato al quotidiano 'La Tribune'' che Air France-Klm potrebbe essere escluso dal capitale del nuovo colosso aereo in quanto ''la nuova societa' non avra' bisogno di raccogliere capitali supplementare''. ''Il nuovo gruppo e Air France-Klm sono gia' partner'' hanno ricordato le fonti sottolineando che ''a questo stadio non avranno bisogno di legami capitalistici'. (ANSA). XGT

[i_disa]

AIR FRANCE-KLM: NESSUNA PARTECIPAZIONE FINANZIARIA A DELTA
ANSA) - PARIGI - Air France-KLM non partecipera' finanziariamente al progetto di fusione tra Delta e Northwest in quanto ''le risorse in liquidita' delle due compagnie non richiedono finanziamenti supplementari attraverso un aumento di capitale riservato'' al gruppo franco-olandese. Lo precisa Air France-KLM in un comunicato in cui si felicita dell'annunciato accordo tra le due compagnie americane la cui fusione, sottolinea, ''facilita il varo della co-impresa transatlantica che associa il gruppo Air France-KLM e il nuovo gruppo Delta che ingloba Northwest''. (ANSA). XGT