Op-ed a merged delta-northwest brought consumer benefits opinions content from atwonline

Ten years ago, on Oct. 29, 2008, Delta Air Lines closed its merger with Northwest Airlines. At the time of the announcement, critics warned of the horrible things that would follow. For example, the American Antitrust Institute (AAI) predicted “restricted seat availability, higher fares, degraded service quality, and less choice for consumers.” AAI also made the ominous prediction that the merger “would harm competition and consumers” and advocated that the merger be blocked. Fortunately for consumers, the Department of Justice was not swayed. Today, based on every relevant measure, the merger has been an unqualified success and has provided massive benefits to America’s and the international traveling public.

Post-merger, Delta has expanded its network, allowing its customers to connect to more places around the world.

In some US cities, including some of the largest and most competitive markets, the change has been dramatic. At New York LaGuardia our ASMs are up 83%. We have grown our seats 88% at Los Angeles and 74% at Boston. Delta created a new hub in Seattle where we have grown our seat capacity 200% with the addition of 50 destinations, including 14 international destinations. Our growth has not been restricted to high profile cities. Delta has added new service or increased ASMs by over 10% in 176 markets. We have also expanded international service to Europe, both in existing markets and from five additional gateway cities that include Indianapolis, Los Angeles LAX, Orlando, Tampa and Raleigh-Durham. Capacity to Latin American and the Caribbean has also grown by nearly 70%. All of this growth has generated massive consumer benefits. Indeed, economists who have analyzed the merger have concluded the consumer benefits generated greatly exceeded those that Delta had anticipated at the time of the merger.

The dire prognostication that the merger would stifle competition was also wrong. Options for air travel have also expanded over the past 10 years. Travelers today can select from a range of competing airline business models–from LCCs, to ultra-LCCS, regional network carriers and global network carriers. Since 2010, US ultra-LCC Spirit Airlines has grown its capacity by over 330%, while Allegiant has grown by more than 150%, JetBlue Airways has grown by over 70% and Alaska Airlines has grown by over 85%. Even with consolidation, LCCS and ultra-LCCS have expanded their share of the US market. This competitive market has led to an increase in the average number of competitors in US city pairs from 3.3 in 2000 to 3.4 in 2007 and 3.5 in 2017. The airline industry remains fiercely competitive.

This robust competition has resulted in fares that are among the lowest in history. According to a recent US Department of Transportation analysis, fares in the third quarter of 2017 were at “the lowest inflation adjusted quarterly fare in 23 years of air fare records.” This is true even after taking fees into account. Of the three 2-1 overlap city pairs for Delta and Northwest pre-merger–routes that critics predicted large fare increases–average fares have fallen by an average of 19% since the merger. Fares between Cincinnati-Detroit have fallen by 23%, fares between Cincinnati-Minneapolis have fallen by 28% and fares between Minneapolis-Salt Lake City have fallen by 11%.

Delta customers have also enjoyed improvements in operational performance and the travel experience. Delta’s completion factor has improved to the point that cancelations are rare for anything other than weather. Last year, Delta had 242 days where it completed every one of its mainline flights. In the 10 years since the merger, despite its larger size and scope, Delta’s missed bag ratio improved by 79%, on-time delivery improved by 22.7 points and the rate of bags delivered within 14 minutes improved by almost 11 points. Delta is enjoying its highest customer satisfaction scores in history. Delta’s most recent JD Power score of 767 is more than 100 points higher than the average of Delta and Northwest scores before the merger. A substantial improvement of a simple metric that speaks volumes–our customers appreciate the difference.