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Delta-Northwest Merger Approved by Shareholders

Shareholders from both Delta and Northwest voted on September 25 to approve the two airlines' proposed merger. Each airline's shareholders offered nearly unanimous support for the tie-up. So what's next on the agenda? The airlines must receive regulatory approval from the Department of Justice, which will look at the numerous antitrust concerns surrounding this deal. There's also a pending lawsuit, filed against the merger in an effort to kill it.

Assuming the merger passes these tests, the idea of a combined carrier could become a reality quicker than we think. With that, it's worth wondering whether or not the resulting mega-airline will actually be good for customers. Over at the Wall Street Journal's Middle Seat Terminal blog, it's noted that Cincinnati, in particular, may take see a sharp drop-off in flights, and a corresponding spike in prices. The airport is a major hub for Delta, so previously competing Northwest routes will likely be dropped.

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A large part of the reasoning behind this deal has always been the two airlines' complimentary schedules which, at the level of a global route network, have little overlap. However, the Cincinnati case suggests we could see route consolidation at each airline's hubs, which include Minneapolis/St. Paul, Detroit, and Memphis for Northwest, and Cincinnati, New York, Atlanta, Los Angeles, and Salt Lake City for Delta.

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