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Jaunted Comments: Thoughts on the Delta-Northwest Merger

You've no doubt noticed we get comments. Usually they're funny, and we like to highlight the best every Friday. But a recent note on our story about the proposed Delta-Northwest merger caught our eye.

Raphael Bejar wrote us a little essay on why he thinks the merger isn't a good idea:

In the airline industry today, size is no longer the exclusive driver of value to the shareholder. Sheer size can certainly assuage supply-chain woes, create economies of scale and rein in costs--an attractive proposition in this age of rising fixed expenses. But the real path to profitability for legacy carriers is an overhaul the existing business model.

LCCs have transformed themselves into thriving e-commerce enterprises, creating value for shareholders and maximizing profits; legacies are still trying to be the biggest kid on the block.

Now, Bejar runs a company that helps airlines reduce costs and boost ancillary revenues, so we're not surprised that he'd advocate this position. But it's interesting to consider LCCs as web enterprises rather than travel companies. The one low cost airline he didn't mention, Skybus, actually brags about being a web-only carrier.

This is what makes the chatter about big-time mergers so interesting. We're not just talking about balance sheets, we're talking about the future of commercial aviation. Should legacy carriers perpetuate the status quo, or is the traveling public ready for a new direction? Delta won't ask, but customers are the ones who buy the tickets.

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Related Stories:
· Comment on the Delta-Northwest Merger Talks [Jaunted]
· Airline Mergers coverage [Jaunted]