Delta, Northwest Announce Merger

April 14, 2008 03:42 PM
by Anne Szustek
Following months of discussion, the Delta-Northwest merger finally becomes a reality this week. Meanwhile, smaller airlines are buckling under the falling economy.

30-Second Summary

After resolving various pilot disputes, Delta Airlines and Northwest Airlines announced Monday that they have agreed to a merger deal that will create the world's largest carrier.

Atlanta-based Delta met with pilots over the weekend, trying to reach an agreement that would give them a pay hike and official stake in the new airline, reports the Atlanta Journal-Constitution.  

Meanwhile, Northwest officials met in the airline’s hub of Minnesota, saying they will oppose any merger that does not keep the interests of their pilots “at the forefront of the decision-making process.”

While solving pilot problems helped to seal the deal, analysts predict the two carriers may still have issues to work out, including how to handle current shareholders’ interests and outside investment once the merger becomes reality.

The airline industry has been beset by “brutal market conditions,” reports The Financial Times: “A surge in fuel costs and a looming drop-off in demand for air travel triggered a spate of bankruptcies among smaller carriers and pressed even their bigger peers to consider transactions that would reduce expenses and maximize revenues.”

Carriers ATA, Aloha and Skybus all declared bankruptcy earlier this month, leaving passengers stranded and experts wondering if other small, low-cost airlines would soon suffer the same fate.
Watch the local coverage of the merger talks on Minnesota news channel WCCO.

Headline Link: Delta and Northwest announce merger

Related Topics: As merger looms, other airlines face troubles

Opinions & Analysis: The cost of flying and the problem with pilots

Background: Merger talk

Reference: ALPA


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