Live

Watch CBSN Live

Delta and Northwest Receive Government Approval for Merger

About a month ago, I noted that while Delta and Northwest had both approved their merger, we were still waiting for the most important approval - the US Department of Justice (DOJ) - to come through. Earlier today, that happened, and the merger is now official.

I think what was most surprising about the DOJ's approval is that it didn't require a single change. No slots needed to be sold, no gates had to be offered to others, and it just sailed right through. While it's true that Northwest and Delta have very little overlap, there are some places, especially between hubs, that are now going to be significantly less competitive. Why didn't the DOJ try to make any efforts to address this?

Well, it's no surprise to hear that the current administration has been very good to the business world. That's quite apparent to anyone who has been watching the headlines as the country struggles through the current financial crisis. So it's also no surprise to see that the DOJ would just let this merger happen without suggesting any changes. It's not the same DOJ we saw tear apart the attempt US Airways-United merger right around the time of George Bush's first election.

To be fair, that one had much more serious anti-competitive issues than this one which has very few, but I imagine the penalties for an attempt at the same US Airways-United merger today would be far less severe than they were back then as well.

But back to the merger at hand. It is now officially completed in the eyes of the law. Now it's time for the really hard work to begin - the actual integration. Planning is one thing, but actually making it happen is something else entirely.

View CBS News In
CBS News App Open
Chrome Safari Continue