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Delta and Northwest to MergeApril 16, 2008 By: George Dooley
The long awaited merger of Delta Air Lines and Northwest Airlines has been announced in an all-stock deal valued at $17.7 billion. The airlines said the deal would take as long as a year to be finalized, including regulatory approvals. The new airline will be called Delta.
Officials said that the merger, one of the largest in airline history, helps offset record oil prices and intense competition and will benefit employees, communities and consumers. Delta’s pilots also reached an agreement on a post-merger contract.
The merger will combine Delta’s strengths in the South, Mountain West, Northeast, Europe and Latin America with Northwest’s positions in the Midwest, Canada and Asia. Competition will be preserved and enhanced as a result of complementary networks, executives said.
World headquarters of the combined airline will be in Atlanta, with executive offices in Minneapolis/St. Paul. Major airline operations and an employee base will remain in Minnesota.
SkyTeam frequent flyer programs and partner networks will be integrated and existing Air France, KLM joint venture partnerships will be continued.
Combining Delta and Northwest will create a global U.S.-flag carrier strongly positioned to compete with foreign airlines that are continuing to increase service to the United States, the airlines said. The new Delta is estimated to generate $1 billion in annual revenue.
Delta CEO Richard Anderson will be CEO of the combined company. Delta Chairman of the Board Daniel Carp will become chairman of the new Board of Directors and Northwest Chairman Roy Bostock will become vice chairman.
Combined, the company and its regional partners will provide access to more than 390 destinations in 67 countries. Delta and Northwest, together, will have more than $35 billion in aggregate annual revenues, operate a mainline fleet of nearly 800 aircraft and employ approximately 75,000 people worldwide. Visit www.delta.com.