Delta Air Lines Inc. and Northwest Airlines Corp
|
 Email to a Friend
|
ATLANTA - Delta Air Lines and Northwest Airlines, squeezed by record high fuel prices and a slowing economy, are combining in a stock-swap deal that would create the world’s biggest carrier. The boards of both companies gave the deal the go-ahead Monday.
 Delta said the combined airline, which will be called Delta, will have an enterprise value of $17.7 billion. It will be based in Atlanta, and Delta CEO Richard Anderson will head the combined company. Under the terms of the transaction, Northwest shareholders will receive 1.25 Delta shares for each Northwest share they own. The exchange ratio represents a premium to Northwest shareholders of 16.8 percent based on Monday’s closing stock prices.
Delta Chairman Daniel Carp will become chairman of the new board of directors and Northwest Chairman Roy Bostock will become vice chairman. Delta President and Chief Financial Officer Ed Bastian will retain his titles. The new board will be made up of 13 members, seven of whom will come from Delta’s board, including Anderson, and five of whom will come from Northwest’s board, including Bostock and Doug Steenland, the current Northwest CEO.
One director will come from the Air Line Pilots Association, the union that represents pilots from both carriers. There will be an unspecified number of job cuts or transfers through the consolidation of overlapping corporate and administrative functions, Delta said. The two airlines employ more than 80,000 people combined. The company expects no involuntary furloughs of front-line employees and said the existing pension plans for both companies’ employees will be protected.
Delta doesn’t plan to close any of the two airlines’ hubs.
Delta also said that it has agreed with its pilot leadership to extend its existing collective bargaining agreement through the end of 2012. The agreement, which is subject to pilot ratification, will allow the combined company to realize the revenue synergies of the transaction, Delta said. It also provides the Delta pilots a 3.5 percent equity stake in the new company and other enhancements to their current contract.
The agreement does not cover Northwest pilots.
Delta said it will use its best efforts to reach a combined Delta-Northwest pilot agreement, including resolution of pilot seniority integration, prior to the closing of the merger.
U.S.-based non-pilot employees of both companies will get a 4 percent equity stake in the new airline when the deal closes, Delta said.
Northwest pilots and the union representing most of Northwest’s ground workers immediately announced they would fight the combination.
Dave Stevens, chairman of the Northwest branch of the Air Line Pilots Association, said in a prepared statement, “The risk to Northwest Airlines and to the Northwest pilot group from letting this merger proceed, as it is now structured, is simply too great.”
Email to a Friend
|
How Would You Like To Fly To Europe For As Little As 75 Bucks?
Our Number One Fly Drive Travel Deal For Thanksgiving, Christmas, or New Years To The State Of Florida
Member Exclusives! Save Up To 15 Percent Instantly Off The Lowest Published Airfares Through September 15, 2010!
GIVE A DAY OF VOLUNTEER SERVICE IN 2010, GET A DAY OF DISNEY THEME PARK FUN – FREE
Travel Deal Of The Day: Washington DC To St. Thomas For $280 Roundtrip All Taxes Included. Plus, Other Cities On Sale
Cheap Discount Airfares To Cancun, Mexico Plus Seven Nights At 4 -Star Resort From $499 Per Person!
Airfare Plus 5 Night Sun And Fun 4-star Hotel Getaways From $219 Roundtrip Per Person All Taxes Included
Free Wi-Fi On 4 Major U.S. Airline Now Thru Holidays December 31, 2009!
Cheap Discount Airfares To Select Florida Cities From $139 Roundtrip All Taxes Included Thru Feb. 10, 2010
Southwest Vacations Offers Packages To Popular Destinations
