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Northwest/Delta
Issues:
The airline industry is facing a major melt down. With raising oil prices, 82.5% increase over 2007 prices; they are all looking at different avenues for survival. Majority of airlines are facing cutbacks, increases in fares, bankruptcy or a merger with other airlines. Consolidation has been seen as the most palatable out of the before mentioned. By combining you are grounding planes, eliminating routes and cutting staff which all ensure profitability.
Northwest and Delta started to talk to each other regarding a possible merger as a solution (Critical thinking and Decision Making). This would increase their planes and employees once combined which would make them one of the biggest single airlines in the industry, assuring an increase in market share (Strategic Planning).
Concepts
Once the decision was reached to merge it seemed like a win-win situation from management’s perspective. They felt that with Northwest’s extensive Asian presence and Deltas large European one it would make them more competitive together than separate. They also could combine ancillary services like reservation lines and airport operations, all resulting additional savings.
“On the administrative and management employees, where there may be some overlap, we are going to have some voluntary programs and attempt in every way we can to avoid involuntary layoffs. At the end of the day there may be some involuntary cuts on management and administrative sides”. Nelson, T. (2008)
Employees however felt th ...