NWA Primed for Merger

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Northwest CEO says his airline 'fixed'

Pacific Business News (Honolulu) - 2:56 PM HAST Tuesday


Northwest Airlines Corp. CEO Doug Steenland on Tuesday declared the airline "fixed" but declined to comment on growing speculation that the carrier is moving toward a merger.
Steenland made his comments during a speech given at the Minneapolis/St. Paul Business Journal's Industry Outlook Event Tuesday morning.
His appearance comes in the midst of talk that a wave of consolidation is set to strike the airline industry, and as Northwest prepares to exit from Chapter 11 bankruptcy protection.
Steenland said the Twin Cities can "count on" Minneapolis remaining a hub, and that its presence at the airport may grow over time. Northwest has no specific plan to merge the airline in 2007, he said; its business plan is based on the company remaining independent.
During public comments following the speech, Steenland said he has doubts that US Airways' multibillion bid to acquire Delta Air Lines will move forward, citing the hostile nature of the hoped-for deal. However, the bid has "put pressure on the industry to consider options," he said.
Since the takeover attempt was announced, speculation surfaced that Delta and Northwest (Pink Sheets: NWACQ) are weighing a merger. Steenland later declined to comment on the subject.
Following the event, he added that consolidation in the industry will "continue to be talked about," and cited what's happened in Europe -- now dominated by three major carriers -- as a relevant trend.
On Northwest's financial future, Steenland said the company has achieved its goal of reaching $2.5 billion in savings and will release its business plan in the coming weeks. In that plan, Northwest will set forward its expected growth and profit forecast, he said.
Over the last year, Northwest has made strides in resolving long-running labor troubles. However, the company has yet to finalize a contract with its flight attendants. Steenland declined to comment on whether further talks between the carrier and attendants are scheduled.
Minneapolis-St. Paul Business Journal

 

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AP
NWA Chief: Airline Has No Merger Plans
Tuesday January 30, 4:55 pm ET
By Joshua Freed, AP Business Writer Northwest Airlines CEO: No Plans to Merge This Year, but No Comment on Report of Delta Talks


MINNEAPOLIS (AP) -- Northwest Airlines Corp. plans to emerge from bankruptcy as an independent carrier and stay that way through 2007, Chief Executive Doug Steenland said on Tuesday.


Northwest and other airlines have been the subject of intense merger speculation, and US Airways Group Inc. has offered to buy Delta Air Lines Inc. Northwest has hired a merger consulting firm, but said that was so it could be prepared to respond to merger offers.

But Northwest has no plans to merge either before it exits bankruptcy (expected by June 30) or later this year, Steenland said, speaking to reporters after a breakfast for Twin Cities business leaders. He declined to comment on reports that Northwest has held talks with Delta Air Lines. And he declined to comment on whether Northwest is currently in merger talks.
Northwest is due to file details of its reorganization plan by Feb. 15. "That business plan and that valuation will be predicated on Northwest being a standalone, independent airline," he said.

Steenland also said Northwest intends to keep its headquarters in the Twin Cities, but added that it would have to be open to a move if that was in the company's best interest.

Northwest has made deals with most of its unions that cut wages in return for claims against Northwest's bankruptcy. The union that represents baggage handlers and other ground workers said it got about 86 cents on the dollar when it sold $36 million of its $181 million claim earlier this month, and the union is aiming to distribute checks to workers by Feb. 7.

But flight attendants never ratified an agreement and the contract imposed by Northwest included no claim against Northwest like the other unions got -- a fact Northwest has been pointing out on its employee hotline messages.
On Tuesday Steenland said Northwest still hopes to make a deal with flight attendants, with a bankruptcy claim as an incentive. The Association of Flight Attendants said mediated talks are planned for Friday.

Flight attendants have been fighting for the right to strike over the imposed contract, and are awaiting a decision by the 2nd Circuit Court of Appeals.
Union spokesman Ricky Thornton said nothing has changed with either side's position.
"Northwest has made no movement from their end, and we have nothing more give," he said.