A quest to become the “flag carrier for the United States around the world” is a key motivator behind the merger agreement between Delta and Northwest, suggested Delta CEO Richard Anderson, who will head the combined entity.
Anderson offered that characterization Tuesday during a joint Delta-Northwest news conference. The merger, he said, “gives us the scale and scope to be able to compete on a global basis.”
Delta President and CFO Ed Bastian, who is to hold the same titles at the combined airline, reinforced the notion that the merger is based more on broad strategic advantage than on the kind of opportunistic cost-cutting that often drives airline mergers.
Bastian acknowledged that both Delta and Northwest are continuing to reduce domestic capacity as standalone airlines even as they seek to expand international routes. However, the merger itself “is not predicated on domestic capacity rationalization,” he said. “This merger is predicated on the long-term strategic interest in hooking up end-to-end networks.”
Doug Steenland, Northwest’s CEO, noted that Northwest has been unable to take full advantage of its international route structure but that the combined airline would be able to do so. As an example, he suggested that the combination with Delta would enable the relaunch of New York-Tokyo service that Northwest was unable to sustain on its own.
The two airlines, to be branded Delta after the merger, did say that synergies and cost savings would enable savings of about $1 billion annually. But their vision of the overriding objective could be found in the title of a jointly issued information packet: “Creating America’s Premier Global Airline.”