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Continued: Is NWA merger on horizon?

  • Article by: LIZ FEDOR , Star Tribune
  • Last update: October 16, 2007 - 10:23 PM

At that time, Moak wrote to fellow pilots: "Mr. Anderson assured me that he was not selected as CEO to facilitate a merger between Delta and Northwest or any other airline."

Five weeks later, Moak sent another letter to pilots that pointed out that Delta's board of directors "was selected by Delta's creditors during the bankruptcy process."

The Delta board is responsible to Delta's shareholders, Moak said in his Sept. 24 letter, and institutional investors could force Delta into a merger.

Comments still stand

A Delta pilots spokeswoman said Tuesday that Moak's Sept. 24 comments still stand.

Philip Baggaley, a Standard & Poor's credit analyst, said Anderson's comments implied "that Delta could be interested in a merger, but only as a buyer, rather than a target company."

He noted that the costs of acquiring and integrating another airline would carry "considerable risk for the buyer."

The complexities of blending union workforces, company cultures, fleets and debt loads have made airline mergers work better in theory than in practice.

When US Airways was making its takeover bid for Delta, it was being dogged by problems combining ticketing operations and labor forces from its merger with America West.

Pilots from the two carriers still are bitterly divided.

Northwest and Delta pilots are both represented by the Air Line Pilots Association.

Delta's pilots aggressively opposed a merger with US Airways, but Moak testified before a U.S. Senate committee that Delta pilots would support the "right consolidation effort" that had a "rational mix of routes, employees and resources."

Anderson struck a delicate balance Tuesday when he acknowledged the need to satisfy employees and shareholders when considering a merger.

"Our employees are our greatest asset," he said, adding that employee "support is crucial for our continued success."

But he also cited the need to "do our very best to create shareholder value."

Liz Fedor • 612-673-7709

Liz Fedor • lfedor@startribune.com

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