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Delta-Northwest Merger Media
October 29, 2008 -
Delta completes deal to acquire Northwest Airlines
MINNEAPOLIS (AP) — Delta Air Lines completed its $2.8 billion acquisition of
Northwest Airlines on Wednesday, turning two of America's most storied airlines
into the world's biggest carrier.
Delta and Northwest closed the deal just hours after the Justice Department said
it had no antitrust objections.
The company will keep Delta's name, Atlanta headquarters, and chief executive
Richard Anderson, who used to run Northwest. Delta executives said travelers
will see no differences right away. New uniforms will be phased in next year,
and Northwest's fleet with its signature red tail will be repainted over the
next two years, the companies said.
"I will tell you from a customer perspective and a frequent-flier perspective it
is business as usual," Anderson said.
The combined airline would carry more traffic than either Air France-KLM
(currently the world's largest) or American Airlines, the biggest U.S. carrier.
But antitrust regulators rejected worries that the new Delta would hurt
consumers, or competition.
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August 19, 2008 - Delta-Northwest merger set to cruise through Congress
As summer winds down, Congress is lining up its autumn hearings. But airline
mergers, the subject of four hearings this spring, are not among the hot-button
issues scheduled for attention.
With no more congressional reviews planned, conventional wisdom holds that the
proposed merger of Delta Air Lines and Northwest Airlines will be completed this
year without additional political objections.
'We believe that Congress saw that antitrust [violations] would not be a
significant concern,'' Delta spokeswoman Chris Kelly said.
Politics is not supposed to play a role because attorneys at the Justice
Department review a merger for possible antitrust violations. That department
alone has the power to block a deal. But elected lawmakers can play an indirect
role in the review process by whipping up popular sentiment against deals that
might limit competition.
House and Senate hearings in April and May, shortly after the deal was
announced, failed to create a firestorm of protests, leaving the Delta-Northwest
merger seemingly cleared for takeoff. Andrew Steinberg, an aviation attorney and
former chief counsel for the Federal Aviation Administration, said, ''I have not
heard there are any problems.'' Justice spokeswoman Gina Talamona said the
review is ''ongoing.''
Some opponents say they will continue to object. - Article from the
Salt Lake Tribune
May 17, 2008 - Delta-NWA merger benefits could take years
Analyst tells Congress that $1 billion in short-term costs would strain airlines
The planned Delta-Northwest merger will cause short-term pain but should be
beneficial in the long run, credit rating firm Standard & Poor's said.
The estimated $1 billion in merger-related costs will strain the airlines, which
are already feeling some of the same financial pressures that sent them into
bankruptcy protection nearly three years ago.
But the combination also will relieve some competitive pressure and allow the
carriers to raise ticket prices, Standard & Poor's airline analyst Philip
Baggaley said Thursday in a report based on his testimony to Congress earlier
this week.
Baggaley said he sees "significant risks" in the costs and operational
challenges of the merger, which Delta and Northwest executives hope will
generate $1 billion annually in higher revenues or lower costs by 2012.
Full Article
Apr 25, 2008 -
Lawmakers Caution On DAL-NWA Merger
Key House and Senate lawmakers yesterday argued that the Delta-Northwest
merger must be examined in the context of what the airline industry could look
like if Delta-Northwest triggered a wave of industry consolidation.
In back-to-back hearings on Capitol Hill yesterday, Northwest CEO Douglas
Steenland and Delta CEO Richard Anderson testified that the proposed merger
would not fall afoul of antitrust laws. Steenland and Anderson testified in the
morning before the House Judiciary committee's task force on antitrust and
competition policy, and in the afternoon before the Senate Judiciary's
subcommittee on antitrust, competition policy and consumer rights.
"We are concerned that this merger could result in a cascade of mergers," said
Rep. John Conyers (D-Mich.), chairman of the Judiciary committee, who said he
could foresee a future industry with "three major carriers competing with a
handful of low-cost carriers." Conyers urged caution, questioning the rush to
consolidate.
The competitive landscape has changed, with the rise of LCCs and with the
liberalization afforded by such agreements as the U.S.-European Union open-skies
deal, Anderson and Steenland argued. A merged carrier will be better able to
compete against "large, well-funded foreign flag carriers" that are stepping up
frequencies to the U.S., Anderson said.
Full Story
April 25, 2008 -
Delta, Northwest warn Congress on job cuts
Delta Air Lines Chief Executive Officer Richard Anderson and Northwest
Airlines Corp. CEO Douglas Steenland told congressional committees and other
interested parties on Thursday a merger of the two carriers would likely mean
about 1,000 job cuts at the combined airline's headquarters.
The duo gave testimony to a House Judiciary Committee task force about the
airlines' planned merger. They also appeared before the Senate Judiciary
Committee's Subcommittee on Antitrust, Competition Policy and Consumer Rights on
Thursday afternoon to testify about the merger plans.
Anderson and Steenland said the airlines would be better off as a combined
entity, and could together better weather record-high fuel costs, which forced
the airlines into a total net loss of more than $10 billion for the first
quarter.
Atlanta-based Delta (NYSE: DAL) reported a net loss of $6.4 billion on $4.8
billion in revenue for the first quarter, including a $6.1 billion non-cash
goodwill impairment charge from the decline in its market capitalization due to
sustained record fuel prices. Delta spent $1.4 billion on fuel in the first
quarter, up 50 percent. The airline hedged 27 percent of its fuel consumption,
for an average fuel price of $2.85 a gallon. Delta realized $46 million in gains
on fuel hedge contracts settled during the quarter.
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April 23, 2008 -
Delta CEO: Likely To Identify Additional Merger Synergies
Delta Air Lines Inc. (DAL) and Northwest Airlines Corp. (NWA) will likely
identify additional opportunities for revenue and cost synergies as they carry
out a "bottom-up" analysis in the coming months, Delta's chief executive said
Wednesday.
Delta and Northwest last week announced plans to merge in a deal that would
create the world's largest carrier. The airlines said the deal is essential to
help them compete in the current environment and would result in more than $1
billion in annual revenue and cost benefits by 2012.
Delta Chief Executive Richard Anderson said during a conference call to discuss
first-quarter earnings that the airlines "established a very conservative
base-case on synergies" and that the original analysis was based on a top-down
analysis. "We haven't plumbed the depths of the cost synergies" that are
possible through the merger, he added.
Full Article
April 17, 2008 -
Delta confident of antitrust approval
Last week, Delta and Northwest airlines got preliminary federal approval to
essentially function as a single carrier to Europe. Now, Delta officials are
hoping that antitrust immunity is a sign of things to come in getting its
proposed merger with Northwest approved.
The Department of Transportation allowed the two airlines — in conjunction with
Air France-KLM, Alitalia and Czech Airlines — to share routes and revenue for
service between Europe and the United States.
The Justice Department will now investigate whether the Delta-Northwest merger
announced this week will limit consumer choices and lead to higher prices.
Full Article
April 16, 2008 -
Merging Delta, Northwest promise the world
Just hours after Delta Air Lines and Northwest Airlines Corp. announced a
$3.1 billion merger that would create the world's largest airline, they were
already working to convince their customers that bigger is better.
If the marriage is approved by the Justice Department, the new company would be
called Delta, employ 75,000 people globally and manage a fleet of almost 800
aircraft making some 6,400 daily flights. Combined with their regional partners,
the merged airlines would provide access to 390 destinations in nearly 70
countries. In a statement, Delta and Northwest, which are the country's third-
and fifth-largest carriers, respectively, estimated the value of the new company
to be $17.7 billion.
Full Article
April 16, 2008 -
Northwest, Delta airlines thrust into merger
The deal, which would form the world's largest airline, comes as jet fuel prices soar and the U.S. economy totters.
Delta Air Lines Inc. and Northwest Airlines Corp. agreed to a merger Monday that would create the world's largest airline and could trigger a wave of industry consolidation and fare increases.
The pact came amid one of the industry's most tumultuous periods as three airlines collapsed in one week and American Airlines, currently the largest carrier in the world, canceled thousands of flights because of missed aircraft inspections. Full Article
April 16, 2008 -
Delta execs hope to win over NW pilots
Executives with Delta Air Lines said Wednesday they still hope bring Northwest
Airlines' pilots on board before they complete their merger sometime later this
year.
Delta's chief executive, Richard Anderson, and its president, Ed Bastian, said
Delta and Northwest pilots "came close" to an agreement on integration about 48
hours before the two carriers announced Monday night that they plan to combine
forces to create the world's biggest airline.
"I'm confident we can still get this done together," Bastian said in a meeting
with reporters and editors at The Atlanta Journal-Constitution — part of an
effort to sell the merger to the public, employees and investors.
Full Article
April 16, 2008 -
Fitch: Delta, NWA merger provides 'financial stability'
The planned merger between Delta Air Lines Inc. and Northwest Airlines Corp.
likely will have little effect on U.S. airports, Fitch Ratings reports.
The New York-based rating agency also said the carriers' merger and possibly
others are needed for the continued financial stability of the domestic airline
industry after years of steep losses.
"Unfortunately, such consolidation may have adverse impacts on the consumer
through increased air fares," the company said. "However, a more stable
long-term financial profile for the airlines would bode well for airports in
general, even if cost per enplanement were to rise."
Full Article
April 16, 2008 -
Mapping Out an Airline for a New World
Delta and Northwest Imagine a Global Force to Fly Above Any Downturn
Executives of Northwest Airlines and Delta Air Lines yesterday made their case
for completing a merger and creating the largest air carrier in the world. Their
pitch essentially boils down to this: The new Delta would be a massive and
growing global operation designed to survive tough economic times while
providing better customer service.
"It's a unique combination," Richard Anderson, Delta's chief executive, said at
a news conference yesterday. "It's a combination about addition, not
subtraction." Anderson and other executives have pledged not to cut domestic
flying more than already planned, to retain all of their hubs and to avoid
layoffs.
But a legion of analysts, lawmakers and consumer advocates said those goals may
be hard to accomplish with spiking oil prices and a weakening economy. The
skeptics said they would expect the merger, if approved by regulators, to lead
to fare increases, fewer flights at airports now served by both carriers and
cutbacks at their smaller hubs.
"The reality is there will be fewer flights on some routes and layoffs in some
cities where there is significant overlap between the carriers," said Michael
Miller, chief executive of Green Skies, an aviation consulting agency. "I would
expect some cuts at the smaller hubs and mid-size cities."
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April 15, 2008 -
NWA Employee Unions Aren't Quick To Embrace Merger
Northwest Airlines employee unions aren't quick to embrace the merger with
Delta Air Lines, even with the promise that there will be no job loss among
frontline employees. No group opposes the deal more than the pilots.
"The labor discord which will result from the current structure of this merger
is likely to overwhelm the potential economic positives," said Northwest Pilot's
Master Executive Council Dave Stevens.
Northwest pilots feel they are being unfairly treated in the merger when it
comes to seniority and pay scale, which gives Delta pilots the advantage.
"I think it's very unfortunate that the Delta pilots negotiated without the
Northwest pilots in agreement," said Stevens
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