Pilots, AF/KL Could Take Stake in DL/NW Merger

[chucky]

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


Story

 

[Alice Cramden]

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


Story

The pilots also want a seat on the board. What a joke. Last time they had a seat on the board, it was a non voting seat.

5% of 270M shares divided by 7100 DAL pilots.

I don't do math in public.

 

[luv2fly]

The pilots also want a seat on the board. What a joke. Last time they had a seat on the board, it was a non voting seat.

5% of 270M shares divided by 7100 DAL pilots.

I don't do math in public.

There still is a non voting position. Why would it be a joke to have a voting position in light of owning 5% of the new airline?
Like it or not, the unions can ensnarl this proposed union in Congressional hearings. Management clearly recognizes that fact and wishes to have the pilots issues resolved. A lesson well learned from the US/AW merge.
As the article mentioned. The combined ALPA group would represent roughly 12,000 pilots.

 

[PHX PHLyer]

There has got to be something going on here with the city of Atlanta and the headquarters. I know that the name will be Delta and that Delta IS Atlanta....but if I were a shareholder (based on what I know now), I would be really pissed!! I mean, automatically foregoing over $250 million by moving the headquarters out of Minnesota is just a waste of money and synergies. The reason you do a deal is to gain synergies that are of value for the company and shareholders. You want every last penny of the synergies. Simply giving back $250 million just so Delta can stay in Atlanta is BOGUS. Atlanta must be offering at least $250 million worth of incentives to keep Delta in Atlanta. Even offering $225 million to stay in Atlanta is not in the best interest of the shareholders....its just a pride thing....which has no place in deals of this magnitude. Something has got to be going on. I know that people say...but a Delta-Northwest deal could save $1.5 billion so its not that big of a deal..BS!!!! $250 million is no small chunk of change....and change that should go to shareholders...not just back into the pocket of Minnesota!

 

[North by Northwest]

I wouldn't get too up set about what newspapers are saying with "anonymous" "close to the deal" sources. No one knows what the name is or where the HQ is except those involved with the deal.

Moreover, I for one still see this having to pass muster with the DOJ (and NW has been waiting how long for anti trust immunity with AF?). They can try to dismiss Oberstar if they want (at their peril). Seems to me Mr. Oberstar supported Ual in it's bid against Steenland (as punishment) for an extra China bid (guess who got it)

Along with "striking a deal" with just pilots...last I checked, that left 26,000 other NWA employees who speak to the same politicians as pilots. Now, I suspect they are getting ready to see a whole lotta angry folks lining up behind Obertsar, and the State of Minn. (Hillery piped in on it today)

If this thing even BEGINS to look like trouble/anger is starting to stir..it will be dead (and once it is announced, the "Golden share" is gone, regardless if the deal is consummated. NO one will be to blame but that worthless pack of parasites on the NW BOD).

No one should delude themselves into thinking the other 26,000 NW employees are just sitting around waiting. The battle lines are being drawn parallel to the "side deal" with the pilots. This ain't bankruptcy.

 

[bigbusdrvr]

so,.....the republic pilots got fenced off the widebodies for how long??? oh yea 25 years......most of a career...

Now the delta f/o's who became captains just a few years ago, when their captains left to protect their pension money, are gonna "SLOT" (ie nicholai/ ALPA merger)POSIBILITY....in front of them......

Nicholai said every merger revolves around its own situation...but how do you explain to a 25 yr northwest capt that the wide bodies will be shared with 15 year delta pilots.....

Just asking.....

 

[North by Northwest]

so,.....the republic pilots got fenced off the widebodies for how long??? oh yea 25 years......most of a career...

Now the delta f/o's who became captains just a few years ago, when their captains left to protect their pension money, are gonna "SLOT" (ie nicholai/ ALPA merger)POSIBILITY....in front of them......

Nicholai said every merger revolves around its own situation...but how do you explain to a 25 yr northwest capt that the wide bodies will be shared with 15 year delta pilots.....

Just asking.....

I think everybody is jumping the gun here. NOTHING from an OFFICIAL source has been said. I can hardly see any NWA pilot giving up ANYTHING. Why should they when their Pacific Division is one of the largest long hauls in the world. Further, I am sure NWA/Republic pilots are in NO MOOD for a repeat of losing ANY seniority. They would be NUTS to give up the left seat Trans Pacific to someone with 3 years less sen. (and tens of thousands of dollars) THAT will not happen.

A merger agreement doesn't mean it is going anywhere if it is just NW pilots "for it". I believe in DOH PERIOD...or NO MERGER.

NWA's future is secure financially / franchise /infrastructure...if we can just get rid of the disease that's running it. This is happening so that a few people can get rich from the transaction.

New Name
DOH
Who cares about HQ.

Or NO MERGER.

p.s. why would a Delta/Northwest need money from AF/KLM when they would be sitting on a combined $6.5 Billion cash. (NWA has $3.5) (I think Dal has $3)

 

[PHX PHLyer]

New Name
DOH
Who cares about HQ.

Or NO MERGER.

I care about headquarters. What if they told you that a DTW or MSP crew base was closing down and there would only be one big base in ATL? And you would either have to move to ATL and take those flights or commute from the MSP or DTW base to ATL to work? There are almost as many people in the MSP headquarters as there are NW pilots....so why should they get the shaft? Especially when there are $250 million dollars in debt rebates and a great headquarters facility?

I guess the reason that I care is that I accepted a job at NW headquarters a few months ago and won't start until June and this could really throw my ass in a tizzy....but at the same time....why should the headquarters employees be so expendable?

 

[North by Northwest]

People should wait until the Fat Lady has sung. There could very well be duel ops Atl / MSP.

I say this because there are some VERY Powerful spheres in Minnesota and they will not give up Northwest Airlines with out a very bloody fight, one that could cost the merger. Why should they give up a company that is the oldest and only remaining US Flag carrier left? For what? What the hell is in it for Northwest people, we don't NEED to merge with anyone. The present operation (built from the sweat/ loss of jobs / loss of pay/ taxpayer money) has a fantastic future alone.

All I can say is...there better be some damn good money coming our way. (and I mean TOP of the Industry)

 

[PHX PHLyer]

People should wait until the Fat Lady has sung. There could very well be duel ops Atl / MSP.

I say this because there are some VERY Powerful spheres in Minnesota and they will not give up Northwest Airlines with out a very bloody fight, one that could cost the merger. Why should they give up a company that is the oldest and only remaining US Flag carrier left? For what? What the hell is in it for Northwest people, we don't NEED to merge with anyone. The present operation (built from the sweat/ loss of jobs / loss of pay/ taxpayer money) has a fantastic future alone.

All I can say is...there better be some damn good money coming our way. (and I mean TOP of the Industry)

I agree 100%. What is in this for NW people? Last time I checked NW was more profitable than DL. So why shoudl DL get everything good out of this.....the management (not that anyone at NW will be sad to see Steenland go), the name, the headquarters, the bargaining power, etc. NW is not about to go under or anything like that and they are bringing A LOT to the table. Delta can start routes to Europe all it wants....but it can't just start all those routes to NRT, BKK, PVG, PEK, GUM, MNL, etc. NW has some seriously valuable assets. I can only hope that if it becomes Delta, with Delta management, completely headquartered in Atlanta that Minnesotan law makers raise HELL until the thing dies. This is a merger of two carriers that are both bringing things to the table and are not financially in trouble....not an acquisition.....and there should be at least some give and take.....not all just take take take on the part of DL

 

[757inthebarrel]

so,.....the republic pilots got fenced off the widebodies for how long??? oh yea 25 years......most of a career...

Now the delta f/o's who became captains just a few years ago, when their captains left to protect their pension money, are gonna "SLOT" (ie nicholai/ ALPA merger)POSIBILITY....in front of them......

Nicholai said every merger revolves around its own situation...but how do you explain to a 25 yr northwest capt that the wide bodies will be shared with 15 year delta pilots.....

Just asking.....

Delta brings many more widebodies and higher paying aircraft to a merger than NW does. A twenty five year NW Capt shouldn't have any trouble anyway. It's the FOs who will see their upgrade slip further and further down the road who have the most to lose.

 

[North by Northwest]

Delta brings many more widebodies and higher paying aircraft to a merger than NW does. A twenty five year NW Capt shouldn't have any trouble anyway. It's the FOs who will see their upgrade slip further and further down the road who have the most to lose.

Not quite...NW has never placed options that it didn't fill (cept the A340)

Therefore, Delta brings 120 widebodies 767s/ 16 777 (including on order) NWA brings 129 744s/787s/A330s/13 742 F (including orders & options) a brand new fleet I might add (x the 400s)

I don't think you are going to get many NW pilots to give up, over the next 10 years 787s, A330s for someone to jump 3-5 years ahead of them. Pay scale is a matter of a few years vs. a career term.

There is no upside for Northwest employees (that we don't already have, except a larger foot print)

 

[NewHampshire Black Bears]

I gotta' laugh !
Some people make DL out to be like a Filet Mignon, when they are(now) at best, a NY sirloin !

DL "NEEDS" a deal.

If you look around the Industry, at the 5 Legacy's, ONLY DL NEEDS a DEAL !!!!!!!!!!

(YA ya I know DL got a lone China route)

Just because they LOOK for Runways in Siberia, and the African continent, to land a 767 on, does NOT Give them a Global Reach.

Think I'm wrong ? Then "WHY" was Anderson LEAPFROGGED into the corner office in HOTLANTA ??

Answer:............Cause HE and (rat faced) DOUG, have been "cooking up this "thing" for Years !!!

As I mentioned before, in another DL thread,................AA.........aka.........(The Male Lion)....has the BEST View of all thats going on, while it suns itself in the Weeds, lying down at Rest

 

[Ch. 12]

I gotta' laugh !
Some people make DL out to be like a Filet Mignon, when they are(now) at best, a NY sirloin !

DL "NEEDS" a deal.

If you look around the Industry, at the 5 Legacy's, ONLY DL NEEDS a DEAL !!!!!!!!!!

(YA ya I know DL got a lone China route)

Just because they LOOK for Runways in Siberia, and the African continent, to land a 767 on, does NOT Give them a Global Reach.

Think I'm wrong ? Then "WHY" was Anderson LEAPFROGGED into the corner office in HOTLANTA ??

Answer:............Cause HE and (rat faced) DOUG, have been "cooking up this "thing" for Years !!!

As I mentioned before, in another DL thread,................AA.........aka.........(The Male Lion)....has the BEST View of all thats going on, while it suns itself in the Weeds, lying down at Rest

AA just has indigestion and can't eat any more right now. Perhaps a small meal (AS) but they remember the gas pains that the last big one left them with...and the cost to their pocket books.

 

[luv2fly]

I appreciate your enthusiasm for AA Bear. That being said I don't understand the whole RA! RA! mantra crap.
AA isn't merging with NW. AA might try to play the part of spoiler, but that's goind to be a tough battle considering the possibility that AF/KLM is going to throw their weight behind this deal.
DL is a global airline whether you like it or not. You claim it is the only legacy needing a merge and you allude to the fact that DL lacks any Asian presence. Your argument conflicts with itself. Here is where I give AA props. With the notable exception of AA, all the legacies face gaping holes in route structure and therefore would benefit from consolidation. Combine NW's Pacific routes and DL's Atlantic and you have a formidable carrier with an extensive route structure comparable to AA and exceeding it in many cases. And btw, those African runways have proven to be quite lucrative.
That is why Anderson "leapfrogged" into the corner office as you say. That and the fact Wallstreet likes consolidation whether it makes sense or not.
The thing you have to remember Bear about being king of the hill, is that there is always someone out there planning to knock you off the hill. It is a ruthless dog eat dog business that doesn't care about employees or even the customers for that matter. It's about money and even your precious AA just may get trumped this time.
The good news for you Bear is either way AA doesn't have to merge so those retirement checks are in no jeopardy. It appears that AA's best opportunity for expansion will lie in its relationship with BA, but as you know federal law precludes those two from any formal consolidation at this time.