acl65pilot

approve a merger that would create the world's largest airline in terms of traffic, according to people familiar with the talks.

If it is approved, these people said, the companies are likely to announce the deal Tuesday, although one person said details could be revealed Monday evening.

DELTA MERGER
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A senior Delta pilot briefed on the talks said he expected the deal to be announced Tuesday, possibly after the market closes. The pilot said the Delta pilots tentatively agreed to contract changes aimed at allowing the merger to go forward, in exchange for a pay raise and an equity stake in the new company.

Another indicator that something big is afoot: Delta requested that a meeting room large enough for hundreds of people be made ready by Monday evening at the former Georgia International Convention Center near the Sheraton Gateway near the airport.

According to one person familiar with the arrangements, Delta has reserved the facility to meet with its top 400 executives and managers sometime Tuesday.

The two airlines have been intent on reviving their earlier deal as an antidote to deteriorating industry conditions. Jet fuel prices have soared in recent weeks, adding hundreds of millions of dollars to airlines' annual fuel bills, and a likely recession threatens to drive down travel demand and ticket prices.

Four smaller airlines have filed bankruptcy or ceased operation in recent weeks.

Atlanta-based Delta and Eagan, Minn.-based Northwest hope a merger will allow them to trim some costs while also reaping more revenues by stitching together their largely complementary route networks.

Delta, the nation's third-largest carrier, has key hubs in Atlanta and New York and extensive trans-Atlantic routes. Northwest, the fifth-largest airline, has a large Asian network and big hubs in Detroit and Minneapolis.

It's unclear how one would-be player will now figure in the possible mega-merger. Air France-KLM is no longer likely to be an investor in the planned merger, or may reduce its planned stake, according to two people familiar with the talks. The European company, currently the world's largest airline in terms of revenue, had said it would invest $750 million into a combined Delta-Northwest.

Delta's and Northwest's investors object that their holdings would be diluted by an Air France investment, according to one of the people. Some investors and airline executives also believe Delta and Northwest, with roughly $6 billion in combined cash reserves, don't need a cash injection from Air France-KLM.

All four carriers are key partners in the SkyTeam alliance.

Negotiations with pilots may continue after a merger announcement. Delta and Northwest may try to forge an agreement later with Northwest's pilots before the deal is closed, according to one of the people.

Earlier plans to announce a Delta-Northwest merger in February foundered when the two carriers' pilots unions were unable to work out an agreement on how to merge their seniority lists. Seniority is a key factor to pilots because it determines what aircraft they fly and what schedules they hold.

In recent weeks, Delta and Northwest decided to resume talks with an aim toward cutting a deal with Delta's pilots union.

The senior Delta pilot, who requested anonymity, said the latest agreement the union has tentatively reached with its pilots offers fewer incentives because the industry's prospects have dimmed in recent months.

"It's not the Olympic gold medal," said the pilot. "It's the silver because we couldn't work together with Northwest. Gas prices and the economy are relegating all labor groups to hold their position. For us to get a pay raise is a miracle."

The pilot also said that this is the first airline merger in the "history of aviation" in which a pilot's group has been included before a merger announcement.

"It's all due to Lee Moak's leadership," said the pilot, referring to the chairman of Delta's pilots union. "We're the ones that drove the process."

The tentative deal between Delta's pilots and management would need to be ratified in a pilot vote 30 days after a merger is announced. Northwest pilots could be added to the deal, said the pilot, at which time there could be additional pay raises.

"We've made some gains in this agreement, and hoping to add gains," said the pilot.

The pilot was "cautiously optimistic" about the success of a combined Delta-Northwest carrier, given current economic conditions.

The pilot said the combined airline will be a "global powerhouse. If we can get this done quickly, we're going to

sailingfun

I love these quotes from senior Delta pilots that always turn out to be wrong. The AJC has reported this merger as a done deal at least 3 different times. I suspect they may be right this time because of conversations with other individuals involved in the process. I never however place a ounce of faith in the AJC rag.

acl65pilot

true, but this is a very good source