Max Powers
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Northwest Reworks Plan
For Merger With Delta
[FONT=Times New Roman,Times,Serif]Deal Could Give Pilots
Less Generous Terms[/FONT]
[FONT=times new roman,times,serif][FONT=times new roman,times,serif]By SUSAN CAREY and PAULO PRADA
March 28, 2008 3:28 p.m.[/FONT]
[/FONT]
Northwest Airlines Corp. executives have proposed that Delta Air Lines Inc. and Northwest proceed with their planned merger, said people familiar with the matter.
But a jump-started deal wouldn't include the terms of a combined pilot labor agreement and the salary enhancements previously foreseen, they said, because the pilots failed to reach agreement on other terms the companies sought to ease the merger.
Getty Northwest Airlines executives have proposed that Delta and Northwest proceed with their planned merger, but a jump-started deal could give less generous terms to their pilots. While the idea may be unpopular with the pilots, there is nothing to prevent the carriers from taking that course. Delta still is pondering the idea, these people said. But both airlines know that if they are going to proceed, they need to move very quickly so the transaction can be scrutinized before current Justice Department officials leave office at the end of the year when the administration changes.
A Delta spokeswoman declined to confirm whether her company has received a proposal from Northwest to proceed without the support of the pilots. "Our board and senior management will continue to explore strategic options," she said.
The two carriers had an entire deal ready to go in February and required only the final approval of their boards. The terms included a share swap at near market values, with Northwest holders getting a small premium; a $750 million investment by their European marketing partner Air France-KLM SA; and a common pilot labor contract for their combined 11,000 pilots that would give all of them raises, with Northwest's 5,000 aviators getting heftier increases to bring them up to Delta levels.
The combined carrier, which would be the world's largest by traffic, was to keep the Delta name, remain based at Delta's Atlanta headquarters and be run by Richard Anderson, Delta's chief executive officer. Doug Steenland, Northwest's CEO, was expected to take a lesser role as a director or leave the combined enterprise altogether. When the original deal was conceived, the companies didn't foresee layoffs, hub closures or much capacity shrinkage, believing instead that combining would generate a big boost in revenue and some operational efficiencies.
They held off, however, because they wanted their pilots to agree first on a method of building a single seniority list. Seniority is key to pilot career advancement and dictates what types of planes they fly, whether they are captains or first officers, when they get time off and whether they could be furloughed.
READ MORE
For Merger With Delta
[FONT=Times New Roman,Times,Serif]Deal Could Give Pilots
Less Generous Terms[/FONT]
[FONT=times new roman,times,serif][FONT=times new roman,times,serif]By SUSAN CAREY and PAULO PRADA
March 28, 2008 3:28 p.m.[/FONT]
[/FONT]
Northwest Airlines Corp. executives have proposed that Delta Air Lines Inc. and Northwest proceed with their planned merger, said people familiar with the matter.
But a jump-started deal wouldn't include the terms of a combined pilot labor agreement and the salary enhancements previously foreseen, they said, because the pilots failed to reach agreement on other terms the companies sought to ease the merger.
A Delta spokeswoman declined to confirm whether her company has received a proposal from Northwest to proceed without the support of the pilots. "Our board and senior management will continue to explore strategic options," she said.
The two carriers had an entire deal ready to go in February and required only the final approval of their boards. The terms included a share swap at near market values, with Northwest holders getting a small premium; a $750 million investment by their European marketing partner Air France-KLM SA; and a common pilot labor contract for their combined 11,000 pilots that would give all of them raises, with Northwest's 5,000 aviators getting heftier increases to bring them up to Delta levels.
The combined carrier, which would be the world's largest by traffic, was to keep the Delta name, remain based at Delta's Atlanta headquarters and be run by Richard Anderson, Delta's chief executive officer. Doug Steenland, Northwest's CEO, was expected to take a lesser role as a director or leave the combined enterprise altogether. When the original deal was conceived, the companies didn't foresee layoffs, hub closures or much capacity shrinkage, believing instead that combining would generate a big boost in revenue and some operational efficiencies.
They held off, however, because they wanted their pilots to agree first on a method of building a single seniority list. Seniority is key to pilot career advancement and dictates what types of planes they fly, whether they are captains or first officers, when they get time off and whether they could be furloughed.
This is also exactly why every time something goes down in regards to the airlines the mgmt teams can blame it on those "stupid" pilots. :smash:
