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What Delta-Northwest Merger Means for St.Maarten and Saint Martin

April 16, 2008

Atlanta carrier Delta, which recently came out of bankruptcy proceedings, immediately turned the industry’s scales and became the leading partner in the board approved 17.7 billion dollar merger with Northwest Airlines out of Minneapolis. Make no mistake, Delta is actually buying Northwest Airlines. With 800 aircraft and some 75,000 people employed worldwide, once again a new “biggest” airline in the world has been crowned.

What will this mean for St.Maarten’s tourism? Well, obviously we’re just a very small pea in the pod, but for the moment it looks like there are some benefits of scale. More cities will have less burdensome, quicker access to St.Maarten. With fast connections, preferably even direct flights being the number one customer desire in airtravel, St.Maarten’s marketplace will expand exponentially with this “merger”. But there is also a downside…..

Less competition means more price fixing. And make no mistake about it, with the rising fuel cost, it’s going to cost an arm and a leg to fly to the friendly island. All imported food prices will go up, while number of visitors will decline. And that will effectively curb a lot of travel appetite in the near to midterm future.

What about MGM Mirage in Las Vegas laying off 4,000 supervising jobs? Have you ever heard of the gaming industry laying off or being affected by an economic downturn. I haven’t. Cinemas, Theatres, Alcohol consumption and Gambling are anti-cyclical in economic terms. People there is something serious going on with this economy and you better start preparing yourself to survive the brunt of it. This is no doomsday talking, it’s just paying the price for decades of easy credit (buy now, pay later) and the invincible feeling that we deserved it. We have been living too high on the hog, thinking that wealth building has no limits, trees grown into the skies, we thought we could afford to buy a million dollar home on $50,000 annual income. Well the pied piper has come to collect.

The Delta-Northwest merger has a much bigger impact than just how it affects individual destinations. It heralds a new era of economies of scale, which means the market size is shrinking, so we need to re-structure to survive and take as much business from our competitors as we can.

St.Maarten get ready for cut throat tactics in tourism. Your one legged tourism depending economy is going to hurt. If you can manage to put all differences aside, put your heads together with the French side and work out a combined plan so attractive that it will take tourism away from other destinations, the Delta Northwest merger will be a good thing.

If you can’t, Delta might just pull out of St.Maarten to make equipment available for other destinations that did see the light. There are many scenarios calling for attention in the current economy, but up here in the states the picture is getting clearer by the day. With oil prices projected to go up to $184 per barrel by the end of this year (70% higher then today), travel will come to a screeching halt for most of us. Cruise ships, car pooling, co-habitation, creativity…a lot of “c” driven words will reign when it comes to saving.

I suggest to turn the word “Travel” into “Cravel”, as in the craving to enjoy foreign places but with the implications of discomforts and cost as was communicated in the origins of the word “Travail” (French for Work).

Written by admin · Filed Under Latest News 

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