Pilots, Air France could see stakes in Delta-Northwest deal
By Marilyn Adams, USA TODAY
Delta (DAL) and Northwest (NWA) airlines appear close to a merger agreement that would give their pilots and European carrier Air France (AKH) ownership stakes in what would be the world's biggest airline.
The Air Line Pilots Association, the union representing 12,000 pilots at both carriers, is seeking a stake of at least 5% of the merged airline, and a seat on the board of directors, according to three sources briefed on the talks who can't speak publicly because the deal isn't final. Delta and Northwest declined to comment on the talks, as did the union and Air France.
In exchange for the stake in the combined airline, the pilot groups would help speed up the integration by agreeing in advance to contract terms, and by resolving issues related to job seniority at their current airlines. If these issues can be resolved quickly, the merger could be announced next week, the sources said.
Air France, which already has a marketing partnership with Delta and Northwest in Europe, would buy a stake in the new airline for nearly $1 billion in cash, the sources said. No payment would be made between the principal airlines. Air France's investment would give the merged carrier an operating cushion. The Air France stake would be within the limits on foreign ownership of U.S. airlines set by federal law.
A merger between Delta, the USA's No. 3 carrier, and No. 5 Northwest would create the world's largest carrier, eclipsing No. 1 American Airlines. (AMR) The "new" Delta would have headquarters in Atlanta, where Delta is based, the sources said. Delta CEO Richard Anderson, at one time Northwest's CEO, would be chief executive.
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By Marilyn Adams, USA TODAY
Delta (DAL) and Northwest (NWA) airlines appear close to a merger agreement that would give their pilots and European carrier Air France (AKH) ownership stakes in what would be the world's biggest airline.
The Air Line Pilots Association, the union representing 12,000 pilots at both carriers, is seeking a stake of at least 5% of the merged airline, and a seat on the board of directors, according to three sources briefed on the talks who can't speak publicly because the deal isn't final. Delta and Northwest declined to comment on the talks, as did the union and Air France.
In exchange for the stake in the combined airline, the pilot groups would help speed up the integration by agreeing in advance to contract terms, and by resolving issues related to job seniority at their current airlines. If these issues can be resolved quickly, the merger could be announced next week, the sources said.
Air France, which already has a marketing partnership with Delta and Northwest in Europe, would buy a stake in the new airline for nearly $1 billion in cash, the sources said. No payment would be made between the principal airlines. Air France's investment would give the merged carrier an operating cushion. The Air France stake would be within the limits on foreign ownership of U.S. airlines set by federal law.
A merger between Delta, the USA's No. 3 carrier, and No. 5 Northwest would create the world's largest carrier, eclipsing No. 1 American Airlines. (AMR) The "new" Delta would have headquarters in Atlanta, where Delta is based, the sources said. Delta CEO Richard Anderson, at one time Northwest's CEO, would be chief executive.
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