The Justice Department announced today that its Antitrust Division has found that “the proposed merger between Delta and Northwest is likely to produce substantial and credible efficiencies that will benefit U.S. consumers and is not likely to substantially lessen competition.” This clears the way for Delta and Northwest to merge officially. It was not an unexpected decision.
Justice says that the combined airline will face competition from other carriers on the “vast majority” of its nonstop routes. Furthermore, it adds, “the merger likely will result in efficiencies such as cost savings in airport operations, information technology, supply chain economics, and fleet optimization that will benefit consumers. Consumers are also likely to benefit from improved service made possible by combining under single ownership the complementary aspects of the airlines’ networks.”
I’ll reiterate what I said about the merger back when it was announced: There was no reason to block it on business or policy grounds, but the business case for merging was weak.
The Associated Press reports that the merger faces a lawsuit set to go trial next week in San Francisco. See also my previous blogging on the Delta-NWA tie-up and “merger mania 2008.”
