Delta-Northwest Merger

The possibility of the Delta-Northwest Airlines merger might be put off for a little longer. There are some issues to be sorted out before the merger goes ahead. It is important that the mistakes committed in the merger between US Airways and America West Airlines not be repeated. For the deal to go through, it is crucial to get the pilots of both the airlines to agree on seniority, pay, and routes to fly. The opportunities from such a merger are immense but quite challenging as well. It would not be in the interest of the market to allow a single airline to have such huge clout on certain routes. The approval from the Justice Department not withstanding, it seems imperative that the merger will most likely go ahead.

Thorny issues like the name of the merged airline as well as the corporate headquarters has been agreed upon during the negotiations. The new airline will be called Delta and the headquarters will be based in Atlanta. A major breakthrough will be get the pilots to agree on the issues mentioned earlier. Delta pilots usually make more and fly newer planes while their Northwest counterparts tend to have more years of experience and will want to protect their seniority.

The shares of both the companies dropped slightly after the announcement of the delay in the merger process.

Article research: Reuters