-- Delta Air Lines completed its purchase of Northwest Airlines Wednesday, hours after the Justice Department announced the merger that will create the world's new largest airline will save consumers money without hurting competition.
The decision removed the last major obstacle to the marriage of the two of the USA's largest airlines. The merger is expected to close by year's end.
The new Delta would operate nearly 800 large jets, employ about 75,000 people and produce about $35 billion in annual revenue. American Airlines, currently the world's largest airline, operates 635 large jets, has about 80,000 workers and generates about $23 billion in annual revenue.
Justice's approval was not a surprise. The two airlines' route systems have little duplication and their combination did not seem to attract the same level of opposition and controversy that the proposed United-US Airways merger did seven years ago. The Justice Department blocked that deal, citing serious concerns about the impact on competition.
Delta spokeswoman Betsy Talton said Delta was not surprised the Justice Department chose not to require any divestiture of takeoff and landing slots at slot-controlled airports such as New York Kennedy, New York JFK, Newark Liberty or Reagan National. Delta is currently the largest airline at JFK and second-largest at Reagan National in Washington. Delta's and Northwest's marketing alliance partner, Continental Airlines, dominates Newark Liberty.
She said starting today and through the upcoming holiday travel season, Delta and Northwest passengers will not notice significant changes. She said customers should continue to check-in and do business with Delta and Northwest separately as they have in the past.
The airlines will continue to operate separate websites, separate reservation systems and separate frequent-flier programs. "We both both believe complete the integration of the airlines with customer benefits rolling out over the next 12 to 18 months," she said.
The deal is worth almost $3.2 billion, based on Wednesday's closing price for Northwest's shares of $9.77. Northwest shareholders will receive 1.25 shares of Delta stock for each share of Northwest stock they own. Northwest's shares, though up from July 15 low of $4.68 a share, are still trading below the $11.22 at which they closed on April 14, the day the deal was announced. Delta's shares closed Wednesday $8.16, also well above their July 15 low of $4, but also still below the $10.48 at which they closed on April 14.