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  • Delta donks the deal

    Posted Feb 26 2008, 02:24 PM by Matt Koppenheffer
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    The other day I noted the wrench that airline pilots had thrown in the plans for Delta and Northwest to merge. It appears today that the potential tie-up has come to nearly a complete stop as an internal Delta memo drew a line in the sand as far as what the company sees necessary for a deal to work.

    According to The Wall Street Journal, the memo was signed by both Delta's CEO and CFO and said that keeping the airline based in Atlanta and maintaining seniority for all of its employees were requirements for any deal to move forward. Outside of those conditions being met, Delta plans to continue to focusing on making it as a stand-alone airline.

    What's yet unclear is the real meaning of the memo. Given the fact that this supposedly internal memo got leaked, I can't help but wonder if it's simply a pressure tactic by Delta in an attempt to get Northwest to bow to its demands. Neither company is currently in an overly conservative financial position, but many think that a combined entity could take advantage of economies of scale that would help combat high oil prices and heavy competition from discount carriers.   Read More...

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  • Merging in the friendly skies

    Posted Feb 22 2008, 01:32 PM by Matt Koppenheffer
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    For a few weeks now, Delta Air Lines, the third-largest U.S. airline by traffic, and Northwest Airlines, the fifth largest, have been in talks to combine. The combination would create a new leader in U.S. air traffic and hopefully give the combined company significant synergies and economies of scale.

    The negotiations have hit a bit of a snag though, as pilots have been unable to come to an agreement about how the seniority list of the new company would look. According to The Wall Street Journal, this list dictates everything from how much the pilots are paid, to what kinds of planes they fly and when they get time off. Though the hitch could be resolved, The Journal cited unnamed sources as saying the deal could be called off if an agreement isn't reached soon.   Read More...

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