Delta-NWA, Continental-United Merging
Merger talk is again the topic du jour in aviation news. The latest news that has everyone buzzing comes from The Wall Street Journal, which writes "merger discussions between Delta Air Lines and Northwest Airlines have picked up steam, and a deal could be announced in the next two weeks, according to people who have been briefed on the negotiations." Interestingly, a similar report a day earlier from The Atlanta Journal-Constitution did not seem to ignite the same buzz as the report in the Journal, which picked up the story on its website yesterday afternoon. Like the Journal, the Journal-Constitution also cites only unnamed sources. The AP also cites unnamed sources in saying a deal could come as early as next week.
But the merger story did seem to advance yesterday. The Houston Chronicle says a Delta-NWA merger may end up "triggering a similar response by Houston-based Continental Airlines and United Airlines." Indeed, the Journal cites "a person familiar with the situation" in writing that "preliminary talks between United Airlines parent UAL and Continental Airlines have grown more serious" as the talks between Delta and NWA press on. "It appears unlikely, however, that Continental will pursue a deal until it is fairly certain that Delta and Northwest are going to merge," The New York Times adds.
But, if there is a Delta-NWA deal, the Journal says "the hope" at United and Continental would be to cement their deal "very near a Northwest-Delta announcement, so the two potential combinations would undergo regulatory scrutiny at the same time," the Journal's source says. "Another person with knowledge of the situation said United and Continental are poised to act quickly once another airline merger is announced," the Journal writes.
As for a Delta-NWA merger, talks were thought to have gotten hung up on how power would be shared among each side's management following a combination. But the Journal-Constitution says its sources tell it that "talks moved forward after Northwest's board of directors pressured (NWA CEO Doug) Steenland." The Journal's Wednesday report echoed that development, saying "Mr. Steenland and the board reached agreement on his management team's potential role in the combined carrier."
Meanwhile, over at United and Continental, the Chicago Tribune writes "egos are less of a concern in the current negotiations, sources say. (United CEO Glenn) Tilton appears more open to ceding power. And some leaders within United's powerful labor unions privately say they would welcome the chance to work with Continental managers, known for fostering healthy employee relations." Still, while all the merger talk has dominated airline news in 2008, there's still a possibility for a very anticlimactic outcome. The Journal notes Delta CEO Richard Anderson ultimately "could still tell his board he thinks Delta should remain independent," perhaps scuttling all of the latest merger maneuvering. Stay tuned …
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airline news, airline merger, Delata, NWA, United, Continental, aviation news, airfare watchdog
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