Air Transport World

Republic gives Northwest feed needed to compete; merger of the two carriers will make the fourth largest airlines in the U.S. in RPMs; will eliminate one of two majors at Minneapolis-St.Paul.

Republic gives Northwest feed needed to compete During its unsuccessful fight against the United Airlines purchase of Pan American World Airways' Pacific routes, Northwest Airlines made much of United's huge domestic network and its computer reservations system. Those two factors, argued Northwest, are so powerful that it might have to consider eventually getting out of the Pacific if United were allowed to go ahead.

United began Pacific operations Feb. 11. Not surprisingly, Northwest is not getting out of the Pacific. Instead, it purchased Republic Airlines to give it what Northwest Chief Executive Officer Steven G. Rothmeier calls the "critical mass" necessary to provide more feed and help fend off United. What the $884 million Republic purchase does not do is give Northwest any relief on the CRS front.

Announced in January, this deal is only the latest in a Northwest spending binge that includes aircraft, facilities, computers and a tour operator. (ATW, 8/85). Northwest also signed several agreements last year with commuter and regional airlines to beef up domestic feed.

Merger of the two lines will create the fourth largest U.S. carrier, in terms of revenue passenger-miles (fifth in domestic RPMs only), from what were once the seventh (Northwest) and tenth (Republic) carriers. The merger will also eliminate one of two major airlines at the Minneapolis-St. Paul hub. The two carriers have asked for rapid handling of the case, either by exemption or an expedited show-cause procedure that would eliminate the need for an oral hearing.

Competitive Concerns

The most optimistic projection is that approval could come as soon as this month. Northwest wants accelerated approval so it can mesh the Republic system with its own for the important summer season. Northwest-Republic does have the precedent of the People Express takeover of Frontier, which only took the Department of Transportation two months to approve. …

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