Delta Air Lines Inc may reach a merger agreement with Northwest Airlines Corp that would form the world's largest carrier, two people familiar with the talks said.
Delta and Northwest have shared details of a proposed combination with Air Line Pilots Association chapters at each carrier, the people said. Union leaders will study how to mesh seniority lists, said the people, who asked not to be identified because the plan is still private. An announcement of the merger may come within weeks, one of the people said.
Labor support is important so airlines can operate smoothly and achieve their planned savings. Pilots at Atlanta-based Delta and Northwest see consolidation as the only way to recoup concessions they made in bankruptcy, said Michael Derchin, an analyst at FTN Midwest Research Securities in New York.
"Job losses and seniority issues are labor's chief concerns," Derchin said in a report last week. "In return for support of consolidation, labor would likely demand stakes in the combined carriers, some job protection and higher wages."
A combination between Delta, the third-largest US carrier by passenger traffic, and No. 5 Northwest would bypass AMR Corp's American Airlines as the biggest airline.
Tammy Lee, a spokeswoman for Eagan, Minnesota-based Northwest, and Delta spokeswoman Betsy Talton said the airlines had no comment. Pilot union leaders at the two airlines didn't immediately return calls seeking comment.
The carriers have declined to confirm merger talks that others, including Northwest's pilot union, say are under way.
Delta's pilot union helped derail a hostile takeover bid by US Airways Group Inc last year by rallying opposition from Delta's bankruptcy creditors committee and employees. Labor groups at US Airways have been feuding since that carrier merged with America West Holdings Corp in 2005.
Seniority is critical for pilots because it helps determine pay, work schedules and the size of aircraft they fly. Pilots can't take seniority with them if they leave one airline to move to another carrier.
Northwest CEO Doug Steenland told employees last Wednesday that industry consolidation was "highly likely."
Reaffirming previous remarks, Delta CEO Richard Anderson said on Friday that Delta "will only go ahead if a merger meets our goals to strengthen the company and create job security for both companies' employees."
US carriers are studying mergers and considering selling off assets like frequent-flier programs in response to rising fuel prices and concern that demand may slow. More low-fare competition and excess seating capacity have also crimped airlines' ability to raise ticket prices.
Delta fell US$0.30 to US$18.19 on Feb. 8 in New York Stock Exchange composite trading, while Northwest fell US$0.05 to US$18.45.
The two carriers each filed for bankruptcy protection on Sept. 14, 2005, and exited last year after securing lower-cost union deals.
DEFENSE: The first set of three NASAMS that were previously purchased is expected to be delivered by the end of this year and deployed near the capital, sources said Taiwan plans to procure 28 more sets of M-142 High Mobility Artillery Rocket Systems (HIMARS), as well as nine additional sets of National Advanced Surface-to-Air Missile Systems (NASAMS), military sources said yesterday. Taiwan had previously purchased 29 HIMARS launchers from the US and received the first 11 last year. Once the planned purchases are completed and delivered, Taiwan would have 57 sets of HIMARS. The army has also increased the number of MGM-140 Army Tactical Missile Systems (ATACMS) purchased from 64 to 84, the sources added. Each HIMARS launch pod can carry six Guided Multiple Launch Rocket Systems, capable of
Authorities have detained three former Taiwan Semiconductor Manufacturing Co (TMSC, 台積電) employees on suspicion of compromising classified technology used in making 2-nanometer chips, the Taiwan High Prosecutors’ Office said yesterday. Prosecutors are holding a former TSMC engineer surnamed Chen (陳) and two recently sacked TSMC engineers, including one person surnamed Wu (吳) in detention with restricted communication, following an investigation launched on July 25, a statement said. The announcement came a day after Nikkei Asia reported on the technology theft in an exclusive story, saying TSMC had fired two workers for contravening data rules on advanced chipmaking technology. Two-nanometer wafers are the most
TRAJECTORY: The severe tropical storm is predicted to be closest to Taiwan on Wednesday and Thursday, and would influence the nation to varying degrees, a forecaster said The Central Weather Administration (CWA) yesterday said it would likely issue a sea warning for Tropical Storm Podul tomorrow morning and a land warning that evening at the earliest. CWA forecaster Lin Ting-yi (林定宜) said the severe tropical storm is predicted to be closest to Taiwan on Wednesday and Thursday. As of 2pm yesterday, the storm was moving west at 21kph and packing sustained winds of 108kph and gusts of up to 136.8kph, the CWA said. Lin said that the tropical storm was about 1,710km east of Oluanpi (鵝鑾鼻), Taiwan’s southernmost tip, with two possible trajectories over the next one
CHINA’s BULLYING: The former British prime minister said that he believes ‘Taiwan can and will’ protect its freedom and democracy, as its people are lovers of liberty Former British prime minister Boris Johnson yesterday said Western nations should have the courage to stand with and deepen their economic partnerships with Taiwan in the face of China’s intensified pressure. He made the remarks at the ninth Ketagalan Forum: 2025 Indo-Pacific Security Dialogue hosted by the Ministry of Foreign Affairs and the Prospect Foundation in Taipei. Johnson, who is visiting Taiwan for the first time, said he had seen Taiwan’s coastline on a screen on his indoor bicycle, but wanted to learn more about the nation, including its artificial intelligence (AI) development, the key technology of the 21st century. Calling himself an
RSS