Delta – Northwest Airlines Merger

15 04 2008

Late Monday (today), a merger was announced between Delta and Northwest Airlines.  The resulting corporation will be named Delta, and will be the world’s largest airline.  The board at the new Delta Airlines would consist of 7 Delta board members, 5 Northwest board members, and 1 representative from the Air Line Pilot’s Association.  The transaction, which will be handled in stock, will total $17.7 billion.

Northwest shareholders will recieve 1.25 shares of Delta for every 1 Northwest share they own.  The main offices would be in Atlanta, Georgia, and executive offices might be in Minnesota.  The new company, Delta, would create over $1 billion in annual revenue, and the integration costs are estimated not to exceed $1 billion as well.

Although it seems as though every other aspect is playing out well, the one key point where the airlines have not yet agreed is pilots.  The pilots have not yet integrated their hierarchies, and this will pose a major problem.



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