Speculation has intensified that Delta Air Lines and Northwest Airlines are set to merge after a report said they had shared plans with pilots’ unions.
The Bloomberg news agency claims that the firms have submitted merger plans to the Air Line Pilots Association (ALPA) for union leaders to study.
Neither firm would comment on the report and the ALPA was not immediately available to respond.
A deal would create the largest US airline, overtaking American Airlines.
Industry wide woes
Delta and Northwest both exited Chapter 11 bankruptcy protection last year, but the firms are still struggling in the face of higher fuel costs and a downturn in consumer spending.
These troubles are affecting the whole airline industry and analysts expect a wave of consolidation, enabling carriers to cut costs, reduce the number of overlapping routes and raise ticket prices.
There are already rumours of another even larger deal being considered by United Airlines and Continental Airlines.
However, any merger plans may face obstacles from pilots’ unions worried about job losses, work schedules, and pay levels.
Last year a hostile takeover offer for Delta from its rival US Airways was blocked by the airline’s creditors.
WHAT TO TAKE AWAY FROM THIS ARTICLE:
- Delta and Northwest both exited Chapter 11 bankruptcy protection last year, but the firms are still struggling in the face of higher fuel costs and a downturn in consumer spending.
- These troubles are affecting the whole airline industry and analysts expect a wave of consolidation, enabling carriers to cut costs, reduce the number of overlapping routes and raise ticket prices.
- The Bloomberg news agency claims that the firms have submitted merger plans to the Air Line Pilots Association (ALPA) for union leaders to study.
