World of Business. Delta airlines and Northwest airlines Merger, Essay

World of Business. Delta airlines and Northwest airlines Merger, Eastman Kodak Bankruptcy,Digitalization, Kodak Reorganization - Essay Example The merger which was approximately $3.1 billion is expected to restructure the US airline industry and will use the Delta name in its operations with its headquarters situated in Atlanta. This huge merger between the third largest Delta and the fifth largest Northwest airlines will help in creating a global giant with more than 700 jets, 6400 daily flights, almost $35 billion revenue yearly and the new company’s value of almost $17.7 billion, far above their current market value. The merger will also have approximately 75000 employees globally with no hub closures expected and a 1.25 delta share for each of the Northwest airlines shareholders in addition to the seniority protection of the frontline employees for both airlines via fair and equitable seniority integration. The merger of the Delta and the Northwest airlines was also facilitated by the fact that they have very few overlapping routes which may interfere with their operations since Delta had most routes in Europe an d Latin America while Northwest concentrated its business in Asia (Fedor Web). This major merger in the airline industry will further marry the Delta’s route networks in Europe and Latin America with the Northwest’s Asia networks and further create more routes thus widening its networks. This giant merger is expected to initiate significant and plausible efficiencies that will undoubtedly make the US and world’s customers’ gain greatly from savings on expenses for airport operations, technology and suppliers as well as heightening competition in the carrier industry. The merger was aimed at benefiting the two parties involved by making them more efficient in service provision and their respective operations. The merger was also intended to increase international presence and the ability to fund long term investments in the airline industry as well as offsetting the higher fuel prices which has fundamentally affected the financial viability of the airline operations. The merger will not lay off any employee but will tend to raise the salaries of all the employees for both airlines and further reduce their previous pay cuts that existed before the merger (Fleming Web). The merger of Delta and Northwest airlines is intended to provide a better solution of meeting the stakeholders’ objectives. The merger is expected to help the financiers, employees and passengers achieve their main intentions since it will allow the new company to make profits that will be used in increasing the dividends, raising workers pay, and satisfying their clients respectively. A stable and continuous profit will be maintained by the company to sustain its operations hence improving the various stakeholders’ aims. Other benefits that may be accrued are creating a global US carrier that intensively competes with other foreign airlines as well as enabling their customers from across the world get access to a global route system that will allow them to travel anywhere just by using same company’s facilities (Fleming Web). Increase of destinations greatly helps in adding further schedule options and extra opportunities to make more money while redeeming frequent flyer miles thus making a more financially stable airline company with a vast opportunity of growing and expanding. All the customers from both the airlines will benefit from each other’s greater services and strengths to various destinations as well as easing the integration risk due to their complementary networks and common membership in the Sky Team alliance. Although this merger was initially opposed by the Northwest’s airline due to the anticipation of job loss, there was a great