Northwest pilots try to keep Delta merger deal alive
By LIZ FEDOR, Star Tribune
In a memo to Northwest pilots, union officers expressed support for "expedited arbitration" as a way to resolve their seniority integration conflict with Delta pilots.
Meanwhile, Delta's management pressed ahead Tuesday with an aggressive plan to combat high oil prices, including cutting 2,000 jobs, or 3.6 percent of its workforce, and slashing Delta's domestic flight capacity by 10 percent later this year.
"With fuel expected to remain at approximately $100 per barrel for the foreseeable future, we must take action to keep Delta strong," Delta CEO Richard Anderson and Delta President Ed Bastian told the airline's 55,044 employees in a memo.
Separately, Dave Davis, Northwest's chief financial officer, said at a New York investor conference Tuesday that the run-up in fuel prices could push Northwest's 2008 fuel bill to $5.2 billion, about $800 million more than it had projected.
"We have a thorough review underway of our capacity right now, with a particularly hard look at domestic" flying, Davis said. In January, Northwest indicated that it would shrink domestic capacity by 5.5 to 6.5 percent this year. But Northwest CEO Doug Steenland said Sunday that, after the big jump in oil prices, "We have to rethink the size of the airline we operate."
Davis didn't announce any capacity reductions or employee layoffs on Tuesday, and he didn't say when Northwest will make alterations to its 2008 business plan.
Davis and Bastian, who made presentations to Wall Street analysts, declined to answer specific questions about the fate of a potential Delta-Northwest merger.
"With the cost of fuel where it is, we think that the case for industry consolidation remains strong and is in fact stronger than ever," Davis said.
For his part, Bastian said, "We are proponents of consolidation, but it does have to be the right deal."
The two airline executives spoke a day after Lee Moak, Delta pilots union chairman, unequivocally stated in a memo to Delta pilots that the two pilot groups were unable to reach a deal on a combined seniority list.
"We will not seek a transaction for a transaction's sake," Moak said in his memo, in which he explained that he terminated discussions with the Northwest pilots group over the weekend.
Moak described how the two pilot groups convened this month in Washington, D.C., in hopes of a breakthrough. "It became clear that the position of the other pilot group had not meaningfully changed, and therefore the on-again, off-again integration talks were suspended without substantial movement toward a middle ground agreement," Moak wrote. He added that he had informed Delta's top management that the two pilot groups were unable to reach an agreement on blending their seniority lists.
Seniority pact or no merger
Industry insiders, including New York-based consultant Robert Mann, said Tuesday that it's unlikely that Delta's Anderson and his board of directors would proceed with a merger without a seniority list and the support of the Delta pilots.
Jerry Glass, an aviation consultant and former US Airways executive, said Anderson clearly stated that he would only do a merger deal if the transaction met certain principles, including protecting the seniority of Delta employees. "You have to assume they'll adhere to those principles," Glass said.
Dave Stevens, chairman of the Northwest pilots union, and his officers expressed unease with Delta's proposed merger business plan, which they viewed as risky. In their memo, they wrote: "Do we base a seniority list which will affect Northwest pilots for the next 30 years on an aggressive business plan and aircraft options over the next few years which may never be implemented?"
But the Northwest pilot leaders also hinted that they aren't ready to abandon a merger with Delta.
Story
NW Pilots Want Merger With Delta
Lets not go pop those champaigne corks just yet huh NHBB?
By LIZ FEDOR, Star Tribune
In a memo to Northwest pilots, union officers expressed support for "expedited arbitration" as a way to resolve their seniority integration conflict with Delta pilots.
Meanwhile, Delta's management pressed ahead Tuesday with an aggressive plan to combat high oil prices, including cutting 2,000 jobs, or 3.6 percent of its workforce, and slashing Delta's domestic flight capacity by 10 percent later this year.
"With fuel expected to remain at approximately $100 per barrel for the foreseeable future, we must take action to keep Delta strong," Delta CEO Richard Anderson and Delta President Ed Bastian told the airline's 55,044 employees in a memo.
Separately, Dave Davis, Northwest's chief financial officer, said at a New York investor conference Tuesday that the run-up in fuel prices could push Northwest's 2008 fuel bill to $5.2 billion, about $800 million more than it had projected.
"We have a thorough review underway of our capacity right now, with a particularly hard look at domestic" flying, Davis said. In January, Northwest indicated that it would shrink domestic capacity by 5.5 to 6.5 percent this year. But Northwest CEO Doug Steenland said Sunday that, after the big jump in oil prices, "We have to rethink the size of the airline we operate."
Davis didn't announce any capacity reductions or employee layoffs on Tuesday, and he didn't say when Northwest will make alterations to its 2008 business plan.
Davis and Bastian, who made presentations to Wall Street analysts, declined to answer specific questions about the fate of a potential Delta-Northwest merger.
"With the cost of fuel where it is, we think that the case for industry consolidation remains strong and is in fact stronger than ever," Davis said.
For his part, Bastian said, "We are proponents of consolidation, but it does have to be the right deal."
The two airline executives spoke a day after Lee Moak, Delta pilots union chairman, unequivocally stated in a memo to Delta pilots that the two pilot groups were unable to reach a deal on a combined seniority list.
"We will not seek a transaction for a transaction's sake," Moak said in his memo, in which he explained that he terminated discussions with the Northwest pilots group over the weekend.
Moak described how the two pilot groups convened this month in Washington, D.C., in hopes of a breakthrough. "It became clear that the position of the other pilot group had not meaningfully changed, and therefore the on-again, off-again integration talks were suspended without substantial movement toward a middle ground agreement," Moak wrote. He added that he had informed Delta's top management that the two pilot groups were unable to reach an agreement on blending their seniority lists.
Seniority pact or no merger
Industry insiders, including New York-based consultant Robert Mann, said Tuesday that it's unlikely that Delta's Anderson and his board of directors would proceed with a merger without a seniority list and the support of the Delta pilots.
Jerry Glass, an aviation consultant and former US Airways executive, said Anderson clearly stated that he would only do a merger deal if the transaction met certain principles, including protecting the seniority of Delta employees. "You have to assume they'll adhere to those principles," Glass said.
Dave Stevens, chairman of the Northwest pilots union, and his officers expressed unease with Delta's proposed merger business plan, which they viewed as risky. In their memo, they wrote: "Do we base a seniority list which will affect Northwest pilots for the next 30 years on an aggressive business plan and aircraft options over the next few years which may never be implemented?"
But the Northwest pilot leaders also hinted that they aren't ready to abandon a merger with Delta.
Story
NW Pilots Want Merger With Delta
Lets not go pop those champaigne corks just yet huh NHBB?
