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The Domino Effect: Will Airlines Follow One Another in the Consolidation Game?
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The Domino Effect: Will Airlines Follow One Another in the Consolidation Game?

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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Delta Airlines is reportedly about to merge with Northwest Airlines in a deal that’s likely to set off a major round of consolidation in the airline industry. Wharton experts say that other major airlines are likely to fall in line with their own consolidation plans. Or so the speculation goes. But this scenario has been talked about before. Is the latest consolidation dance for real this time? For Delta and Northwest, the advantages of consolidation are relatively clear: Delta dominates the southeast, and Northwest has complementary routes in the northern part of the United States. More importantly, Northwest has international routes to Asia. According to Elizabeth Bailey , Wharton professor of business and public policy, the need to build lucrative international routes is one of the reasons airlines are consolidating. In addition, she states, a merged Delta-Northwest would have minimal overlap. “If Delta and Northwest merge, the question will become what happens to the others at the dance,” says W.…

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