Florida Flyer

From yesterday evening's Financial Times:

http://www.ft.com/cms/s/0/cb732600-d...0779fd2ac.html


Delta Air Lines and Northwest Airlines are closing in on an agreement to merge the two US carriers, people familiar with the discussions said.
The airlines may clinch the landmark accord as early as the middle of this month, the people said, though they cautioned that negotiations could still stall or even collapse.
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Delta and Northwest have made some progress in selecting the combined company’s top managers. Richard Anderson, Delta chief executive, would keep that title following the proposed merger, while Doug Steenland, Northwest chief executive, would remain part of a senior team that would include executives from both airlines, the people said.



A deal between Delta and Northwest, two of the world’s largest carriers, would help squeeze excess capacity from an industry beset by record fuel costs and intense competition for passengers. It could also spark a wave of consolidation throughout the industry, as rivals scramble to strike deals that help them eliminate unprofitable routes and weather a looming economic downturn.

The two airlines and their advisers still need to find common ground on the deal’s terms, including the ratio at which Northwest investors will exchange their shares for those in the new company.
There are also no assurances that any of the concessions either side have made will be part of a final agreement, should there be one, one person said.

Mindful of the scrutiny any airline merger will receive from regulators, politicians, organised labour and consumer advocates, both carriers are striving to structure a deal that would minimise job losses while still delivering the cost savings its shareholders crave.
It is a delicate balance and any agreement would merely mark the start of a lengthy process of winning the necessary approvals and then integrating complex operations into one company.

Northwest declined to comment on Wednesday. A Delta spokeswoman said: “Delta’s board is working with management to analyse strategic options, including potential consolidation transactions, to ensure Delta maintains its leadership position.”

Delta executives received approval from their board last month to pursue a merger with either Northwest or United Airlines, another legacy carrier. As January ended, and Delta’s talks with Northwest gained momentum, United in turn weighed reigniting negotiations with yet another airline, Continental.

Copyright The Financial Times Limited 2008

ToiletDuck

"minimise job loss" my fanny. Looks like upgrades are about to go to junk. I was doing all I could to get in the big leagues before this hit but it looks like I'm a year late.

gasnhaul

Yeah, grand ain't it? I should have been out of the USAF Jan of 07, but noooo...excuse me but I've gotta go stand in front of my a$$ kicking machine for awhile.

GNH

freezingflyboy

I think 2008 is going to be a bad year to be at the bottom of ANYONE'S seniority list. Better hold on everyone!

Rosie

A consolidation or reduction in any of the carriers domestic capacity creates interesting opprotunities for carriers like SWA. If consolidation occurs (and I think it will) some LLC will take advantage of it.

By the way I agree with freezing...I wouldn't want to be on the bottom of the list.

Superpilot92

It doesnt matter where you are when/if it happens. Every carrier will be effected, both major and regional. Remember the best time to get on with a company is when others hesitate. If you wait till everyone wants on your your already to late. Write that down its important.

johnso29

I'm sure that's what many people at America West were thinking for years and look how it turned out for them. No one is sure that any consolidation will happen. These morons on Wall Street won't shut about it because they are trying to make money. Remember how close CAL and UAL were to merging last year. It's all we heard about and it NEVER happened. The stock market is weak and it needs a boost. No one is sure if consolidation will happen, and no one is sure if furloughs will result. Everyone keeps talking about furloughs due to route overlap, but Delta and Northwest really don't have much domestic overlap which is probably why they are Skyteam partners. Delta and Northwest are hiring close to 1000 pilots this year alone, and the need for pilots will continue regardless of mergers. Delta and Northwest have planes that will be delivered, and are expanding internationally which requires more pilots than domestic flying. And if the merger happens, who knows how many NWA pilots will stick around. Perhaps many will early out because they still have a sour taste in their mouths from the NWA/Republic merger. Frozen pensions give guys a lot of incentive to leave at 60. Bottom line, no one knows what will happen so just sit back, relax, and enjoy the ride.

Lighteningspeed

I have to agree with Johnso29. Let's not beat ourselves into frenzy over things we have no control over. Whatever happens happens. Only time will tell. Meanwhile, interview, fly, get hired etc and live your life.

NWA and Delta have very little if any overlap in domestic routes. Most of the growth I suspect will be in the international sector. Therefore, there may still be hope for pilots.

Superpilot92

Not to mention between the 2 companies they plan on hiring 700+ pilots in 2008. So IF they needed to furlough it would be a wash because all they would have to do is stop hiring and it would be a wash. Thats saying they needed to furlough 700+ pilots = unlikely. Very little overlap, retirements, growth should equal no furloughs.

BalloonChaser

Anyone know how long this might take to get finalized anyway. I mean merging senority lists could take forever but I'm sure if DAL and NWA announced a merger say on May 1st, I'm assuming it's not going to be one big happy family on May 2nd. Are we looking at years of consolidation and such before the dust settles? Curious from those that may have been through this before.
FWIW I agree, minimal overlap, both showing profit, orders and hiring, you'd think they could just stop the hiring process and shift resources until they finalize a fleet?
24% of the market share if they merge - would be an awesome entity.