Delta Accord Paves Way for Northwest Deal, People Say (Update1)
By [bn:PRSN=1] Mary Jane Credeur [] and [bn:PRSN=1] Mary Schlangenstein []
April 10 (Bloomberg) -- Delta Air Lines Inc. and its pilots agreed on a tentative contract to clear the way for a merger with Northwest Airlines Corp. that would create the world's largest carrier, people familiar with the talks said.
The pilot accord includes higher pay and an equity stake in the combined airline, which would keep Delta's name and Atlanta headquarters, said the people, who didn't want to be identified because the plan is still private. The tie-up may be announced next week, the people said.
To work around an impasse between Delta and Northwest pilots, who couldn't agree on how to mesh their ranks, Delta is drawing up the new contract with just its 7,000 pilots, said the people. Northwest's 5,000 pilots will be asked to join under a single contract later, the people said.
Negotiations to create a combined seniority list may take months to complete, the people said. Pilots for both companies are represented by the Air Line Pilots Association.
The merger includes a small premium for Northwest investors, three of the people said.
Delta spokeswoman Betsy Talton declined to comment, other than to reiterate that the company's board committee to assess mergers remains active. Tammy Lee, a spokeswoman for Eagan, Minnesota-based Northwest, declined to comment.
To contact the reporters on this story: Mary Jane Credeur in Atlanta at
[email protected]; Mary Schlangenstein in Dallas at
[email protected]
Last Updated: April 10, 2008 16: