Delta Air, Northwest on verge of merger

Business Materials 14 April 2008 23:09 (UTC +04:00)

Expectations grew that Delta and Northwest airlines could announce a merger as early as Tuesday after months of talks, a deal that would produce the world's largest airline. ( dpa )

The merged airline would combine Delta's trans-Atlantic routes to Europe and to and within Latin America with Northwest's Pacific routes to Asia. American Airlines would fall to second place as the world's carrier if the deal goes through.

The Northwest board was slated to meet Monday, according to Bloomberg financial news service. Reports appeared in major US newspapers Monday saying an agreement was near.

Delta chief executive officer Richard Anderson met Sunday in Minneapolis, Minnesota, with his Northwest counterpart Doug Steenland to discuss the merger plans, according to people familiar with the talks cited by Bloomberg.

Delta, the third-largest US carrier, is hoping that a merger with number-five Northwest would consolidate fuel costs, which surged 77 per cent in the past year.

Delta spokeswoman Betsy Talton and Northwest spokeswoman Tammy Lee declined to comment.

Pilots have been a sticking point in the negotiations, and have refused to draw up a combined seniority list before a merger. Pilots are the only major unionized group at Delta. Seniority determines pay, type of aircraft and routes flown.

Delta has reached preliminary agreement with its 7,000 pilots on some issues.

Northwest pilot leader Dave Stevens said yesterday in an e-mailed statement to Bloomberg that any merger involving Northwest must be in the best interests of pilots, customers and employees in order to "avoid our vigorous opposition."

The merger was threatened last month after pilot leaders at Delta and Northwest failed to agree on how to combine their seniority lists. The two sides differed over how younger pilots at Delta would move up the list as older Northwest pilots retired.

If the merger goes through, it is expected to put pressure on other US airlines to consolidate.