Delta confirms no merger till conditions met

Delta executives have given an assurance to their employees that the company will ensure that all rights of the employees are well protected if it goes for the merger deal with Northwest Airlines.

In the memorandum issued to the employees, Delta Chief Executive Richard Anderson and President Ed Bastian have said that any deal with Northwest has not yet been finalized till date. They said that the company's criteria for any potential deal include protecting the seniority of Delta employees and creating greater job security

"To date, we have not arrived at a potential transaction that meets all of our principles. Rest assured that we will not complete a transaction unless all of these conditions are met," Anderson said. "We have a strong stand-alone plan. We will maintain our attention on executing that plan while we continue to look at strategic alternatives."

According to various sources, the main hindrance to the contract is to decide the seniority for the 12,000 pilots who will work under the combined carrier. The pilot unions have reportedly agreed on a comprehensive joint contract, but this issue has held the finalization of any contract. If the pilot talks are unable to yield any results then the deal on a combination of the two airlines will be in real trouble.

Delta pilots generally earn more money than Northwest pilots and also fly newer planes. At the same time, Northwest pilots tend to have more years of experience and want to protect their seniority in the combined airlines.

In a separate note to its employees, Northwest’s chief executive, Doug Steenland, said the airline believes "consolidation among network carriers is inevitable."

Steenland said- “Northwest continues to consider options that would provide greater long term security and growth for employees and create value for shareholders, and benefit customers and service.”

Some other issues in the deal are like the combined airline should be called Delta and be headquartered in Atlanta. But these issues have reportedly been solved already.

Industry observers say that if a Delta-Northwest deal does not successfully fall through, the two airlines can either seek a quick deal with another carrier or wait until next year to again try the consolidation between them.

On the New York Stock Exchange, Delta shares fell by 56 cents, to $15.59. Northwest shares first rose 15 cents, or less than 1 percent, to $16.01 but shed 16 cents after hours.