Last November the upstart US Airways, based in Florida, made a bid for Delta Airlines that was turned away. Delta is a valued, long-time corporate citizen of Atlanta. While the smaller airline’s bid was unsuccessful, the effort still sent shock waves throughout the state.
That same month there were other rumors of merger talks with United Airlines. Both parties denied talking, but agreed the airline industry needed to consolidate.
As the New year began, fresh merger talks hit the business wires. This time Northwest Airlines, based in Minneapolis, Minn., was said to be in talks with Delta. But lo and behold, United, was in the mix, too. News of merger talks gave a shot (15 percent) to Delta’s ailing stock price that at one point last year had lost 45 percent of its value.
Not all are happy. Rep. Jim Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee, worries that pairing Delta and Northwest would put union jobs in jeopardy. Of Delta’s 51,000 employees, only pilots are unionized, while most of Northwest’s 31,000 employees are union members. Those same concerns have been expressed by other lawmakers. The Washington Post reported that Rep. Jerry Costello, D-Ill., chairman of the House aviation subcommittee, said, "Generally, airline mergers are not good for airline employees or consumers. When airlines merge, it means there are fewer airlines, less competition and higher prices." Sen. Byron Dorgan, D-N.D., said, "I don’t think any of the airline problems are going to be solved by airlines getting bigger."
However, airlines are looking for ways to save money and grow stock value. There are too many wings in the air with different stripes to make much profit, so a merger is inevitable. According to the Associated Press, the head of the pilot’s union, Lee Moak, told members in a letter that "consolidation may indeed be at our door."
Whichever door opens to expose Delta’s new suitor, lets hope they keep the Delta family name and keep Atlanta as their home. While few jobs would be lost, having Delta headquartered in Atlanta gives the entire state a boost.
- Macon Telegraph
Jan. 24, 2008