Wednesday, October 29, 2008

DOJ Gives Blessing to Delta/Northwestern Merger

Posted by D. Daniel Sokol

DOJ has released a Statement of the Department of Justice’s Antitrust Division on Its Decision to Close Its Investigation of the Merger of Delta Air Lines Inc. and Northwest Airlines Corporation.  In short, the merger is kosher.  As the release states:

After a thorough, six-month investigation, during which the Division obtained extensive information from a wide range of market participants –including the companies, other airlines, corporate customers and travel agents –the Division has determined that the proposed merger between Delta and Northwest is likely to produce substantial and credible efficiencies that will benefit U.S. consumers and is not likely to substantially lessen competition.

The two airlines currently compete with a number of other legacy and low cost airlines in the provision of scheduled air passenger service on the vast majority of nonstop and connecting routes where they compete with each other. In addition, the merger likely will result in efficiencies such as cost savings in airport operations, information technology, supply chain economics, and fleet optimization that will benefit consumers. Consumers are also likely to benefit from improved service made possible by combining under single ownership the complementary aspects of the airlines’ networks.

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