Sun, Mar 30, 2008 page11

• Northwest seeks to revive merger talks with Delta

  • NY TIMES NEWS SERVICE
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  Northwest Airlines has asked Delta Air Lines if it would like to restart merger talks, despite the inability of the carriers' pilots to agree on how to merge their all-important seniority lists.

  The latest discussion between Northwest and Delta was tentative, a person with knowledge of the situation said, and it appeared on Friday that the ball was in the court of Delta chief executive Richard Anderson.

  A Delta spokeswoman, Betsy Talton, declined to comment.

  Merging without the approval of pilots could anger the airlines' most powerful work group and make it difficult to run a combined airline efficiently. But the threat might help push the pilots back into negotiations.

  Dave Stevens, chairman of the Northwest chapter of the Air Line Pilots Association, said in a statement late on Friday: "In order for any airline merger to be successful, the pilots of both groups must be involved and agree to the terms. We will reserve our judgment and support until the economic and contractual elements of an agreement have been negotiated."

  Delta and Northwest had hoped to obtain a new contract covering the roughly 11,000 pilots and an agreement on merging their two seniority lists before going forward with a merger.

  In exchange, the managements had offered higher pay and a stake in the combined carriers.

  The terms called for the combined airline to be known as Delta, to be based in Atlanta and to be run by Anderson. Northwest chief executive Douglas Steenland had agreed to step aside if the carriers combined.

  Some airline investors, hoping merged carriers would be more profitable, started urging combinations even before Delta and Northwest emerged from bankruptcy last year.

  Seniority governs pay, schedule and many other elements of a pilot's career. Merging two lists is always divisive.

  More than two years after US Airways merged with America West Airlines, pilots are still fighting over a combined list. That has prevented the company from operating as a single airline.

  Anderson has promised that any merger would improve job security at Delta and that he would not do a deal unless "the seniority of our people is protected." Proceeding without cooperation from pilots could invite their opposition. Some in Congress already oppose big airline mergers, concerned that they will reduce competition and lead to higher fares.

  Together or alone, carriers face difficult times. Continental Airlines chief executive Lawrence Kellner warned workers a week ago that airlines' furious efforts to raise fares in recent weeks were not going very well. Carriers need higher fares to cover increased fuel costs.

  "Unfortunately, recent ticket price increases haven't been matched by low-cost carriers, meaning that recent domestic price hikes have resulted in very little revenue to us," Kellner told workers in a weekly voice-mail message.

  The slowing economy, meanwhile, could soon dampen demand for air travel.

  Some analysts are expecting billions of dollars in airline losses this year after two years of profits at most carriers.

  United Airlines and Delta each announced plans this month to ground 15 to 20 planes to reduce capacity, and Delta said it would reduce employment by 2,000.

  Northwest is also looking at reducing its fleet.
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