DELTA-NWA MERGER NEWS
Cox News Service

Delta, Northwest merger talks on hold!

A merger deal between Delta Air Lines and Northwest Airlines is on hold while their pilot unions try to hammer out how to combine workers and how much to demand from the companies. The move is aimed at smoothing the integration of Delta and Northwest, but some experts said pilots may drag out negotiations or demand too much, potentially scuttling the deal.

"It ain't going to be easy, and it could be a deal-buster" if the unions can't agree or seek too large a pay-off from going along with the merger plans, said Vaughn Cordle, chief analyst at consulting firm at Airline Forecasts.

The pilots may push for more than $1 billion in incentives, including stock in the combined airlines, pay raises, and other contract improvements, Cordle said. "That may kill the deal." Such a pilot agreement could allow the carriers to announce a merger pact either late this week or sometime next week, these people said.

The people briefed on the discussions said they believe union leaders are motivated to clear a path for the planned merger. The airlines have offered pilots an equity stake in the contemplated merger. The unions also hope a merger will reverse some of the pay cuts and other concessions they made to Delta and Northwest as they headed into twin bankruptcy restructurings.

Meanwhile, Delta and Northwest have largely resolved other issues related to a planned stock-swap merger. Delta Chief Executive Richard Anderson is expected to remain at the controls, while Northwest CEO Doug Steenland will give up a direct management role and remain of the board of directors, according to one person.

Delta's pilots union, with about 6,300 active members, is the only large union group at the Atlanta-based carrier. Minneapolis-based Northwest has roughly 4,500 active pilots in its ALPA unit. More than 80 percent of Northwest's workers are in unions.

WHO’S NEGOTIATING YOUR MERGER INCENTIVES? HOW MUCH STOCK WILL DELTA GIVE YOU? PAY RAISES AND CONTRACT IMPROVEMENTS TOO?

WHO’S PROTECTING YOUR SENIORITY? WHO’S NEGOTIATING YOUR IMPROVEMENTS?

DON’T GET LEFT BEHIND, SIGN THAT IAM A-CARD NOW AND TURN IT IN TODAY!