NWA-Delta merger deal ready for airlines to sign

[Omaha Steve]

http://www.startribune.com/15859527.html


But the announcement is on hold because pilots haven't agreed how to blend their seniority lists.

By LIZ FEDOR, Star Tribune

Last update: February 22, 2008 - 7:22 AM

The proposed combination of Northwest Airlines and Delta Air Lines, structured as a stock swap and including a $750 million investment from Air France-KLM Royal Dutch Airlines, is set to be unveiled as soon as the pilots from both carriers resolve issues surrounding seniority.

"The merger agreement is in fact ready to sign. It is done," a source familiar with the negotiations told the Star Tribune Thursday.

Having reviewed the details of the deal Wednesday, Northwest's board is expected to meet again to act on resolutions authorizing management to implement the merger, the source said. "That won't happen until there is a pilot agreement, if there is," the person said.

The carriers' pilot groups are struggling to figure out a way to blend their workforces in a fair manner. Northwest and Delta pilots are represented by the Air Line Pilots Association (ALPA).

Northwest ALPA's executive council met Thursday to discuss the merger, the proposed labor contract and the union's strategy to resolve the seniority conflict. Pilot leaders are expected to continue that meeting today.

"Reaching agreement on economic issues prior to a formal merger would give Wall Street confidence in the new consolidated entity, which means improved value -- and thus improved equity -- for our pilots," Dave Stevens, chairman of the Northwest pilots union, said in a recent memo to his members. "Cooperation adds to the synergies of the new company, which allows it to pay higher wages, another benefit for our members."

FULL story at link.

[Thirtieschild]

1. Which airline is absorbing which? What will the new name be?

Headquarters where? I ask this as someone who no longer has access to a daily newspaper, who lived in Atlanta 39 years and who flew Delta almost exclusively. Thanks.

[Omaha Steve]

2. Found this with goggle to start with

http://minnesota.publicradio.org/display/web/2008/01/14/nwa_corp/

by Annie Baxter, Minnesota Public Radio
January 15, 2008

Merger discussions between Eagan-based Northwest Airlines and Atlanta-based Delta Air Lines appear to be on a fast-track. If the two carriers merge, the combination could crimp parts of Minnesota's economy. That is, if a merger leads to the loss of the Twin Cities hub or Northwest's corporate headquarters -- or both.

St. Paul, Minn. — Delta Air Lines is reportedly seeking to work out a merger agreement with either Northwest or United Airlines in two weeks.

Citing unnamed sources, the Wall Street Journal reports Delta officials plan to make their recommendation for the best merger partner to the carrier's board of directors early in February.

Northwest will not comment on developments, though the company's CEO has told employees the airline could benefit from a merger.

In the past, Northwest has been favored as Delta's most likely merger partner. And that has prompted experts to mull how the Twin Cities hub and Northwest's corporate headquarters could fare in a possible consolidation.

A number of airline analysts, including Ernie Arvai believe the Minneapolis-St. Paul International Airport would likely stay intact as a hub. If there are service reductions, Arvai thinks it would be a small percentage.

"Some people have said as much as 15 percent, I would say more in the 5 percent range, given the fact that Delta doesn't really have a great presence in the upper Midwest to Northwest's part of the country. Their nearest hub is Salt Lake City, their other nearest hub was Cincinnati, which they greatly deemphasized, and I think as an East-West connecting hub, Minneapolis is more convenient than Salt Lake City," Arvai says.

That's also the view of Bill Blazar of the Minnesota Chamber of Commerce, the state's largest business group. And it's a view he finds comforting. Blazar says losing the Twin Cities hub would make the area a much less convenient place from which to do business. And, he says, most business owners he speaks to value the hub enough that they don't mind paying Northwest a premium for non-stop flights.

"Some of them use stronger terms to describe how much they're paying to fly nonstop. And I say to them, well maybe the hub isn't important, and they say, 'Well, it's worth every dime,'" he says.

FULL story at link.


I'm headed out the door soon, and will be back later today.

[nightrider767]

3. This will not be a good thing for passengers...

Less competition between carriers to maintain price control.

I think things are bad enough for the traveling public, taking choices away, will not help.