Northwest-Delta deal holds for pilots' clearance
— -- If the complex deal comes together in time, an announcement from the carriers could come Thursday, said two sources who have been briefed on the deal and couldn't speak publicly because it's not final.
The combination of Atlanta-based Delta, the USA's third-biggest carrier, and Eagan, Minn.-based Northwest, No. 5, would eclipse Fort Worth-based American Airlines, the current No. 1.
Whether the deal gets approval from both boards Wednesday hinges in large part on the success of negotiations involving the pilots unions at both airlines, which were continuing Tuesday.
Merger plans tentatively call for giving the pilots an equity stake in the combined carrier in exchange for their support and willingness to quickly integrate the two airlines' employees and aircraft, which is crucial to realizing benefits of the merger. The Air Line Pilots Association, the union that represents the 12,000 pilots at both carriers, is seeking a stake of at least 5% and a seat on the merged carrier's board, the sources said. In exchange, the union would agree in advance to labor contract terms and a joint job seniority list for pilots.
Seniority determines which planes, routes and schedules airline pilots fly, and how much they earn as a result. If the pilot negotiations aren't finished, the boards are not expected to vote Wednesday on the merger, the sources said.
The new carrier would also award an equity stake to European giant Air France-KLM — parent of Paris-based Air France and Dutch carrier KLM — in exchange for as much as $1 billion in cash. Both Air France and KLM are already partners with Delta and Northwest in Europe, jointly marketing flights.
Delta and Northwest have declined to comment on the merger talks, but a senior Air France-KLM official confirmed to analysts last week that his company will invest in the combined airline if the deal ultimately closes.
Such a merger would be subject to an intensive review by the U.S. Department of Justice to determine whether it violates federal laws regarding competition. The merger could not close without Justice Department approval.
The merged company would retain the Delta name and be headquartered in Atlanta, the sources said. The new entity would, at least initially, retain all the airport hubs both carriers currently operate: New York, Tokyo, Atlanta, Detroit, Minneapolis, Cincinnati, Memphis, and Salt Lake City.
Delta CEO Richard Anderson, at one time Northwest's CEO, would become chief executive of the merged airline. The deal would be closed through an exchange of stock, with shareholders of Delta and Northwest trading their stock for shares in the new company.
Contributing: Dan Reed
Related Stories
ABC News Live