Delta and Northwest merge

[Everlong204]

By HARRY R. WEBER, AP Business Writer 13 minutes ago

 

ATLANTA - Delta Air Lines Inc. and Northwest Airlines Corp., squeezed by record high fuel prices and a slowing economy, are combining in a stock-swap deal that would create the world's biggest carrier.

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The boards of both companies gave the deal the go-ahead Monday.

 

Delta said the combined airline, which will be called Delta, will have an enterprise value of $17.7 billion. It will be based in Atlanta, and Delta CEO Richard Anderson will head the combined company.

 

Under the terms of the transaction, Northwest shareholders will receive 1.25 Delta shares for each Northwest share they own. The exchange ratio represents a premium to Northwest shareholders of 16.8 percent based on Monday's closing stock prices.

 

Delta Chairman Daniel Carp will become chairman of the new board of directors and Northwest Chairman Roy Bostock will become vice chairman. Delta President and Chief Financial Officer Ed Bastian will retain his titles.

 

The new board will be made up of 13 members, seven of whom will come from Delta's board, including Anderson, and five of whom will come from Northwest's board, including Bostock and Doug Steenland, the current Northwest CEO. One director will come from the Air Line Pilots Association, the union that represents pilots from both carriers.

 

There will be an unspecified number of job cuts or transfers through the consolidation of overlapping corporate and administrative functions, Delta said. The two airlines employ more than 80,000 people combined. The company expects no involuntary furloughs of front-line employees and said the existing pension plans for both companies' employees will be protected.

 

Delta doesn't plan to close any of the two airlines' hubs.

 

Delta also said that it has agreed with its pilot leadership to extend its existing collective bargaining agreement through the end of 2012. The agreement, which is subject to pilot ratification, facilitates the realization of the revenue synergies of the combined companies once the transaction is completed, Delta said. It also provides the Delta pilots a 3.5 percent equity stake in the new company and other enhancements to their current contract.

 

The agreement does not cover Northwest pilots.

 

Delta said it will use its best efforts to reach a combined Delta-Northwest pilot agreement, including resolution of pilot seniority integration, prior to the closing of the merger.

 

U.S.-based non-pilot employees of both companies will get a 4 percent equity stake in the new airline when the deal closes, Delta said.

 

The announcement comes a year after the two carriers emerged from Chapter 11 bankruptcy protection. Both carriers are losing money again but are in much better shape than the four much-smaller airlines that have filed for bankruptcy or gone out of business in recent weeks.

 

The deal will need antitrust approval, and integrating the work forces of fully unionized Northwest and Delta, where pilots are currently the only major unionized work group, will be tricky.

 

The joining of Atlanta-based Delta and Eagan, Minn.-based Northwest, if approved by regulators and shareholders of both companies, will result in combined annual revenue of $31.7 billion, vaulting it ahead of Fort Worth, Texas-based AMR Corp.'s American Airlines for the top spot in the U.S.

 

It would be the biggest carrier in the world in terms of traffic, before any further domestic capacity cuts and any divestitures that might be required by antitrust regulators.

 

The agreement comes after several months of merger discussions between Delta and Northwest and at one time between Delta and Chicago-based UAL Corp.'s United Airlines. Analysts believe a Delta-Northwest combination will stand up better to regulatory scrutiny because the two carriers have less overlap, even though a Delta-United combination could create more scale and have greater synergies.

 

Years of mounting losses forced Delta and Northwest to file for bankruptcy protection in New York on Sept. 14, 2005. Both emerged from bankruptcy as leaner carriers last spring, after shedding billions in costs during their reorganizations.

 

While in bankruptcy, Delta fended off a hostile takeover bid by Tempe, Ariz.-based US Airways Group Inc.

 

Delta said its plan to remain on its own would create more value than US Airways' $9.8 billion bid, which Delta argued would not pass regulatory hurdles. The value argument never materialized, as Delta's post-emergence market capitalization started out $1 billion less than US Airways' bid and less than the $9.4 billion to $12 billion Delta projected. Its market value has fallen precipitously in the months since amid airline industry woes, including high fuel prices and a general inability to gain traction raising ticket prices.

 

Many analysts predicted an eventual Delta-Northwest merger after Anderson, a former Northwest CEO, was named last August to be the chief executive officer of Delta.

 

Anderson, who was Northwest's CEO from 2001 to 2004, immediately sought to quiet those suggestions, telling Delta's pilots union chairman the morning his appointment was announced that he believed in Delta's standalone plan and that "he was not coming in as CEO to facilitate a merger with Northwest."

 

But eight months later, that's what Anderson is doing, and many analysts believe he didn't have a choice amid plummeting airline market values and soaring fuel prices.

 

Wall Street and some airline executives have pushed for consolidation for years, arguing that too many seats are chasing too few passengers. The resulting discounting has made it hard for airlines to cover their expenses.

 

However, Northwest and Delta overlap relatively little in the U.S. ? which could actually help them gain antitrust approval. Delta's routes are strongest in the eastern U.S. and to Latin America and Europe. Northwest would complement that with its near-lock in the Midwest along with flights to its Tokyo hub and other points in Asia.

 

Northwest's Asian routes have been one of its main appeals to other carriers. It and United are the only two U.S. carriers with the rights to pick up new passengers in Japan and fly them farther into Asia. Delta and Northwest also complement each other internationally because they are both part of a marketing alliance that includes Air France-KLM.

 

U.S. airlines get the majority of their revenue from domestic service, though that trend has shifted in recent years as more carriers, particularly Delta and Northwest, have sought to increase international service.

 

http://news.yahoo.com/s/ap/20080415/ap_on_...delta_northwest

 

 

Time to put on the seatbelts, grab a bag of popcorn and get ready for a wild ride in the airline industry. It should be interesting. It looks like United and Continental airlines are already gearing up to merge. What that means for ExpressJet is yet to be seen.

[MarlinFan10]

United and Continental merging? Madness. Continental is very nice while United is crap.

 

I guess this leaves American in 3rd after being #1 for a while once all these mergers happen.

[IrishHarrington]

delta and northwest are the two worst airlines i ever flown on , i suppose this merger will result in one really big crappy airline

[Ice Man]

delta and northwest are the two worst airlines i ever flown on , i suppose this merger will result in one really big crappy airline

 

 

AIR TRANS is the worst.

 

AIR TRANS is the worst.

 

AIR TRANS is the worst.

 

 

Fin.

[BullDurham]

For some reason, I think Pittsburgh International Airport just got a little quieter, again. :thumbdown

[gomarlins9703]

It will be a shame if CO megers with UA. CO is the last of the quality legacy carriers.

[Dr Beinfest]

Top:

JetBlue

British

American (transatlantic)

Air Canada

KLM

 

 

Bottom:

Iberia

American (MD-80 fleet )

United

Southwest

Northwest

 

 

 

 

Delta

[Everlong204]

It will be a shame if CO megers with UA. CO is the last of the quality legacy carriers.

 

 

True..the good news is that the talk is in a merged company the Home base would be Houston and Continentals CEO would run the company so the service on the United side would definitely improve . Not sure if the name is going to be Continental or United but I'm since Continental has most of the cash and the power it could be them.

 

Me, the merger scares me just in the sense that my company does the regional flying for Continental (Expressjet). We have 205 aircraft in Continental colors and if the merger goes down the company will probably have to rebid for the flying against other regional companies and that can get dicey. We'll see what happens. It would be nice to be able to choose either a Chicago or Cleveland base though.

 

 

Either way, airline ticket prices are going to go up. The low cost carriers are already feeling it/dieing. Skybus, ATA, Aloha have already gone out of business. Frontier is in Bankruptcy and may not get out of it. JetBlue has started selling a few of there aircraft in hopes they don't have to do anything further and Air Tran canceled there order for 737's. It's just not profitable to run an airline with $89 round trip fares. not with jet fuel at $5.20 a gallon. Southwest hedged most of there fuel at $2.89 a gallon back in 1999. It was a 10 year contract. Awesome move by them at the time and has allowed them to keep fares as low as they have. come 2009 though, they will be feeling it too. It should be an interesting next 2-3 years for the airline bizz.

[Lefty]

Are you a pilot?

[MarlinFan10]

It will be a shame if CO megers with UA. CO is the last of the quality legacy carriers.

 

 

True..the good news is that the talk is in a merged company the Home base would be Houston and Continentals CEO would run the company so the service on the United side would definitely improve . Not sure if the name is going to be Continental or United but I'm since Continental has most of the cash and the power it could be them.

 

Me, the merger scares me just in the sense that my company does the regional flying for Continental (Expressjet). We have 205 aircraft in Continental colors and if the merger goes down the company will probably have to rebid for the flying against other regional companies and that can get dicey. We'll see what happens. It would be nice to be able to choose either a Chicago or Cleveland base though.

 

 

Either way, airline ticket prices are going to go up. The low cost carriers are already feeling it/dieing. Skybus, ATA, Aloha have already gone out of business. Frontier is in Bankruptcy and may not get out of it. JetBlue has started selling a few of there aircraft in hopes they don't have to do anything further and Air Tran canceled there order for 737's. It's just not profitable to run an airline with $89 round trip fares. not with jet fuel at $5.20 a gallon. Southwest hedged most of there fuel at $2.89 a gallon back in 1999. It was a 10 year contract. Awesome move by them at the time and has allowed them to keep fares as low as they have. come 2009 though, they will be feeling it too. It should be an interesting next 2-3 years for the airline bizz.

Awwww.... Aloha went out of business?

[Ice Man]

Top:

Continental

JetBlue

British

American (transatlantic)

Air Canada

KLM

 

 

Bottom:

Iberia

American (MD-80 fleet )

United

Southwest

Northwest

 

 

 

 

Delta

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Air Trans

 

 

Fixed :mischief

[Ice Man]

I've flown Air Trans twice out of BWI and I've never had any problems whatsoever. Again, I don't know what factors you guys are taking into consideration but sometimes it's the airport's fault. A friend of mine recently had a nightmare of a time flying Air Trans out of Atlanta and almost missed his flight but from what he told me, all of the issues appeared to be attributed to the airport itself.

 

 

Air Trans coach seating is absolutely dreadful. God forbid you're more than 3ft. I've flown in all kinds of airliners and Air Trans has to be the most cramped.

 

From LA to Orlando all I got to eat were Peanuts. I paid less with Delta and got a pretty tasty chicken Caesar salad. Whateves.

[Dr Beinfest]

I've flown Air Trans twice out of BWI and I've never had any problems whatsoever. Again, I don't know what factors you guys are taking into consideration but sometimes it's the airport's fault. A friend of mine recently had a nightmare of a time flying Air Trans out of Atlanta and almost missed his flight but from what he told me, all of the issues appeared to be attributed to the airport itself.

 

 

Air Trans coach seating is absolutely dreadful. God forbid you're more than 3ft. I've flown in all kinds of airliners and Air Trans has to be the most cramped.

 

From LA to Orlando all I got to eat were Peanuts. I paid less with Delta and got a pretty tasty chicken Caesar salad. Whateves.

 

 

Delta didnt give food on a 6 hour flight from Miami to Salt Lake City... jerks.

[Hammerhead]

I've flown Air Trans twice out of BWI and I've never had any problems whatsoever. Again, I don't know what factors you guys are taking into consideration but sometimes it's the airport's fault. A friend of mine recently had a nightmare of a time flying Air Trans out of Atlanta and almost missed his flight but from what he told me, all of the issues appeared to be attributed to the airport itself.

 

 

Air Trans coach seating is absolutely dreadful. God forbid you're more than 3ft. I've flown in all kinds of airliners and Air Trans has to be the most cramped.

 

From LA to Orlando all I got to eat were Peanuts. I paid less with Delta and got a pretty tasty chicken Caesar salad. Whateves.

 

 

Delta didnt give food on a 6 hour flight from Miami to Salt Lake City... jerks.

I once had two meals on a Delta flight from San Diego to Fort Lauderdale. Plus the pretzels or whatever in between. Their food is actually pretty good.

[MarlinFan10]

I really have no idea what other airlines are like, but American is decent. My father is an American pilot so I've exclusively flown American expert for a couple times on Continental, Hawaiian Air, and Aloha Airlines. :confused

[Dr Beinfest]

I have family across the pond so I fly annually over to Europe, whether its to visit or vacation. Ill go at it with a couple of airlines.

 

Alitalia: Sucks. No T.V.'s for a 10 hour flight to Milan, and they kept the lights on the entire time... food was absolutely disgusting...

American: Great, personal T.V.'s and an actual menu to chose from haha.

British: Best airline food in the business, and the stewards/stewardess's are so nice to you... havnt been on it recently but with their customer service Id imagine they all have TV's now.

Swiss: Serve Calzones. Nuff said?

Iberia: absolute worst, the food is like the fat of the chicken and the TV is worse than no TV, its a mockery considering there is one per cabin, and its about 20 inches.

[MarlinFan10]

I don't really know much about it but it certainly seems like being an airline pilot is one of the best jobs imaginable (all things considered).

I'd say making $200,000 a year for almost no work and traveling to Europe and South America is pretty easy. I find it amusing when pilots strike since everyone in the company does more work than then but they make more than everyone except upper management.

[Everlong204]

I don't really know much about it but it certainly seems like being an airline pilot is one of the best jobs imaginable (all things considered).

I'd say making $200,000 a year for almost no work and traveling to Europe and South America is pretty easy. I find it amusing when pilots strike since everyone in the company does more work than then but they make more than everyone except upper management.

 

 

16 year captain at Continental makes 200,000 a year with all the bennies. A first year first officer at Continental Express makes $21,000, is on call 5 days on 2 days for 24 hours (I have gotten calls at 3 a.m to get assigned trips). 4 day trips with 16 hour duty day followed by 8 hours rest (so you get 8 hours to deboard the plane, get to the hotel shuttle, check in at hotel, sleep, wake up, get dressed, eat, show up to airport, get through security, pre flight the airplane and board the passengers...FAA dosent require 8 hours of sleep at night, just 8 hours from when you shut off the engine to when you start them up again the next morning) with another 16 hour day with 8 hours rest. This after a 4 year college education and paying $60,000 in flight training to get the minuimum flight times to get hired by a regional. Plus you get to deal with bird strikes, engine failures/fires, dealing with forgin pilots at JFK and Miami who cant understand what air traffic controll is telling them. ( Had to abort a landing because a aero Mexico pilot thought he was cleard onto our runway when he wasent. and safeguarding the lives of all the passengers against whatever mother nature thows at your aircraft.

 

The most a captain makes at Continental Express (ExpressJet) is 110,000 at the 10 year mark. IF you choose to move on to continental (which is a seperate airline) you start back on the bottom of the totum pole at $30,000 and on call then have to rework your way up to $200,000 which takes 16 years ..(your prolly 30-32 when you would make the move from coexpress to continental)

 

Dont get me wrong, I love my job and it's great most of the time. The Emb-145 is a great aircraft to fly, and once you get high seniorty and can pick your days off, get solid scheduals and nice pay theres no better job out there. Best office view bar none of any other job. The job has taken a beating since 9/11 and hopefully we'll win back some of retirment/pay we had to give up to keep the airlines a float.

 

The people you ussually see protesting are the first offices and young captains working 16 hour days with the responsibilty of safeguarding hundreds of lives trying to not see there $20,000- $ 30,000 paycheck get cut another 15%. Though the upper echalon guys will protest too to support them.

[MarlinFan10]

I don't really know much about it but it certainly seems like being an airline pilot is one of the best jobs imaginable (all things considered).

I'd say making $200,000 a year for almost no work and traveling to Europe and South America is pretty easy. I find it amusing when pilots strike since everyone in the company does more work than then but they make more than everyone except upper management.

 

 

16 year captain at Continental makes 200,000 a year with all the bennies. A first year first officer at Continental Express makes $21,000, is on call 5 days on 2 days for 24 hours (I have gotten calls at 3 a.m to get assigned trips). 4 day trips with 16 hour duty day followed by 8 hours rest (so you get 8 hours to deboard the plane, get to the hotel shuttle, check in at hotel, sleep, wake up, get dressed, eat, show up to airport, get through security, pre flight the airplane and board the passengers...FAA dosent require 8 hours of sleep at night, just 8 hours from when you shut off the engine to when you start them up again the next morning) with another 16 hour day with 8 hours rest. This after a 4 year college education and paying $60,000 in flight training to get the minuimum flight times to get hired by a regional. Plus you get to deal with bird strikes, engine failures/fires, dealing with forgin pilots at JFK and Miami who cant understand what air traffic controll is telling them. ( Had to abort a landing because a aero Mexico pilot thought he was cleard onto our runway when he wasent. and safeguarding the lives of all the passengers against whatever mother nature thows at your aircraft.

 

The most a captain makes at Continental Express (ExpressJet) is 110,000 at the 10 year mark. IF you choose to move on to continental (which is a seperate airline) you start back on the bottom of the totum pole at $30,000 and on call then have to rework your way up to $200,000 which takes 16 years ..(your prolly 30-32 when you would make the move from coexpress to continental)

 

Dont get me wrong, I love my job and it's great most of the time. The Emb-145 is a great aircraft to fly, and once you get high seniorty and can pick your days off, get solid scheduals and nice pay theres no better job out there. Best office view bar none of any other job. The job has taken a beating since 9/11 and hopefully we'll win back some of retirment/pay we had to give up to keep the airlines a float.

 

The people you ussually see protesting are the first offices and young captains working 16 hour days with the responsibilty of safeguarding hundreds of lives trying to not see there $20,000- $ 30,000 paycheck get cut another 15%. Though the upper echalon guys will protest too to support them.

I guess it's different after 9/11. It didn't used to take several years to get up to that salary. BTW my father does happen to be a 16 year captain with American and basically picks where he wants to go and when, but has gone absolutely nowhere in terms of salary raises and status since 9/11. I'm not saying it doesn't take a lot of work to get a gig as an upper level airline pilot, but once you get there, it's pretty damn easy.

[Everlong204]

I don't really know much about it but it certainly seems like being an airline pilot is one of the best jobs imaginable (all things considered).

I'd say making $200,000 a year for almost no work and traveling to Europe and South America is pretty easy. I find it amusing when pilots strike since everyone in the company does more work than then but they make more than everyone except upper management.

 

 

16 year captain at Continental makes 200,000 a year with all the bennies. A first year first officer at Continental Express makes $21,000, is on call 5 days on 2 days for 24 hours (I have gotten calls at 3 a.m to get assigned trips). 4 day trips with 16 hour duty day followed by 8 hours rest (so you get 8 hours to deboard the plane, get to the hotel shuttle, check in at hotel, sleep, wake up, get dressed, eat, show up to airport, get through security, pre flight the airplane and board the passengers...FAA dosent require 8 hours of sleep at night, just 8 hours from when you shut off the engine to when you start them up again the next morning) with another 16 hour day with 8 hours rest. This after a 4 year college education and paying $60,000 in flight training to get the minuimum flight times to get hired by a regional. Plus you get to deal with bird strikes, engine failures/fires, dealing with forgin pilots at JFK and Miami who cant understand what air traffic controll is telling them. ( Had to abort a landing because a aero Mexico pilot thought he was cleard onto our runway when he wasent. and safeguarding the lives of all the passengers against whatever mother nature thows at your aircraft.

 

The most a captain makes at Continental Express (ExpressJet) is 110,000 at the 10 year mark. IF you choose to move on to continental (which is a seperate airline) you start back on the bottom of the totum pole at $30,000 and on call then have to rework your way up to $200,000 which takes 16 years ..(your prolly 30-32 when you would make the move from coexpress to continental)

 

Dont get me wrong, I love my job and it's great most of the time. The Emb-145 is a great aircraft to fly, and once you get high seniorty and can pick your days off, get solid scheduals and nice pay theres no better job out there. Best office view bar none of any other job. The job has taken a beating since 9/11 and hopefully we'll win back some of retirment/pay we had to give up to keep the airlines a float.

 

The people you ussually see protesting are the first offices and young captains working 16 hour days with the responsibilty of safeguarding hundreds of lives trying to not see there $20,000- $ 30,000 paycheck get cut another 15%. Though the upper echalon guys will protest too to support them.

I guess it's different after 9/11. It didn't used to take several years to get up to that salary. BTW my father does happen to be a 16 year captain with American and basically picks where he wants to go and when, but has gone absolutely nowhere in terms of salary raises and status since 9/11. I'm not saying it doesn't take a lot of work to get a gig as an upper level airline pilot, but once you get there, it's pretty damn easy.

 

 

It's still a great job and once you pay your dues your golden, you can get months with 19-21 days off ..even at the regional level. It's just tough when your starting out and got 85,000 in loans and a mortgage/rent and possibly a family and not get upset when management wants to cut your 20,000 a year paycheck 15 %.

 

Where pretty happy with our management here at ExpressJet. Has your dad had anything to say about American's lately ? I hear that some of the contract negotiations and relations with management in general have gotten pretty heated lately.

[Everlong204]

I think the best way to get into the airline pilot business is definitely post-military. Or at least it seems that way.

 

 

For sure, if my right eye wasn't t so near sighted I prolly would have done that. The bennies are so nice in the military now all the pilots usually stay as long as they can, I would say most military pilots are lifers at this point. Thats why alot of us college kids can get into the airlines so quickly now.

[PhxPhin]

not at all necessary now though - i know some guys who went to schools like embry riddle instead of the military so they could get in on what's all up a decent pilot market

 

my uncle flies for Comair (delta) and just received his captaincy there - he was very experienced before taking that job and put in about 8-9 years before getting that bump - there are decent family benefits, but all up it doesn't pay exhorbinately well - especially when you consider how restricting it is to change companies or even parts within the company (like the situation with continental express if my uncle went from comair to delta it would be a paycut and back to the bottom of the line.......)

 

my little brother is actually in a flight school right now in Sanford, FL ............ it's a crazy industry with a lot of red tape and insanity - but a neat industry as well - you do have to pay some serious dues though and when you finally get to the top it's a mandatory retirement age that will be waiting