Delta-Northwest merger

The Delta-Northwest merger was approved this week. Some of you may remember that the Edward Bastian the president and CFO of the combined airline is an SBU graduate who was the keynote speaker at this spring's graduation. (now if he would only give BonaResponds some discounts!)

From BusinessWeek:

"In their Oct. 29 statement, DOJ antitrust lawyers offered not just their tacit approval, but they elaborated some of the benefits they anticipate from the enlarged Delta. The agency says the transaction “is likely to produce substantial and credible efficiencies that will benefit U.S. consumers and is not likely to substantially lessen competition.” Financially, a team of Delta and Northwest employees has been working feverishly for months to make this work. It’s an MBA student’s dream.

Among this deal’s likely advantages, according to DOJ:
• cost savings in airport operations, information technology, supply chain economics
• fleet optimization that will benefit consumers
• improved service made possible by combining under single ownership the complementary aspects of the airlines’ networks...."

What is less clear is how many of these benefits will be realized and why, short of existing competition, will any of the savings be passed on to consumers (BonaResponds discounts would be great PR! hint hint ;) ). Any company will price items as to what the market will bear, not on the costs of production.