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VOL. 123 | NO. 41 | Thursday, February 28, 2008

Delta Executives: No Combo Deal Yet

By HARRY R. WEBER | AP Business Writer

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ATLANTA (AP) - Delta Air Lines Inc.'s top two executives told employees Tuesday that the nation's No. 3 carrier has not yet arrived at a potential combination transaction that meets all of its conditions.

Later Tuesday, Northwest Airlines CEO Doug Steenland told employees in a letter that Northwest is still considering "strategic alternatives," according to the most recent information available by press time.

The memo to employees from Delta Chief Executive Richard Anderson and President Ed Bastian was issued as talks between the Atlanta-based carrier and Eagan, Minn.-based Northwest Airlines Corp. have been hampered by an inability by their pilots unions to reach a deal on integrating seniority lists.

The executives said the company's criteria for any potential deal include protecting the seniority of Delta employees and creating greater job security.

Other conditions include that the combined airline be called Delta and be headquartered in Atlanta. Officials familiar with the talks have said those criteria have already been met, as have most other issues, except for pilot integration.

"Rest assured that we will not complete a transaction unless all of these conditions are met," the Delta executives said in the
memo. "We have a strong stand-alone plan. We will maintain our attention on executing that plan while we continue to look at strategic alternatives."

Steenland told Northwest
workers: "We continue to believe that consolidation among the network carriers is inevitable."

Given that, he wrote, Northwest would consider a deal that would provide more long-term security and growth opportunities for workers, create value for shareholders, and help customers and the cities Northwest serves.

"We continue to consider strategic alternatives based on these criteria," he wrote.

Not too long ago, Delta and Northwest seemed all but certain to announce a combination.

That still could happen, but the pilot impasse has jeopardized a deal. Neither side has suggested it's ready to walk away, but there has been a public and private silence in recent days from many people familiar with the deal.

Industry observers say that if a Delta-Northwest combination falls through, the two airlines could stay independent, seek a quick deal with another carrier or wait until next year to try the consolidation game again.


---

AP Business Writer Joshua Freed in Minneapolis contributed to this report.


Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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