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Pilots at Northwest Airlines and Delta Air Lines, who reached an impasse over seniority issues in the spring, ultimately are willing to submit themselves to binding arbitration to resolve their disputes by the end of the year.

But first they'll take a run at melding their seniority lists through "a period of good-faith discussions designed to reach a negotiated agreement," Lee Moak, chairman of the Delta pilots union, said in a Thursday memo to his pilots.

A blended pilot seniority list and a joint labor contract are critical for a Delta-Northwest merger to succeed.

The Delta pilots' executive council unanimously approved the joint pilot labor agreement Wednesday, and the Northwest council is expected to vote on it today.

The labor deal, which union leaders are deciding whether to submit to the rank and file for ratification, would bring Northwest pilots up to equal pay with the Delta pilots on Day 1 of the merger.

The tentative agreement includes a pay raise of 5 percent for Delta pilots in 2009, and annual increases of 4 percent for Delta pilots through 2012. Northwest pilots, who now are paid less than Delta pilots, would receive larger increases to bring their pay up to Delta's levels. The Northwest union has not released details on how the pact affects its members.

Both pilot groups would receive equity in the merged carrier, according to Delta pilots' spokeswoman Kelly Regus.

In his Thursday letter, Moak said the labor agreement offers "significant gains" for both pilot groups "despite being negotiated in a hostile environment of record-high fuel prices, a slowing economy and a widespread industry downturn."

Northwest pilots' chairman Dave Stevens declined to be interviewed Thursday.

Earlier this year, Delta and Northwest pilots failed to agree on a way to blend seniority lists. During recent negotiations, they set up a two-step process for achieving a seniority list by the end of the year. If they do not negotiate a seniority list by a deadline -- which they didn't disclose Thursday -- then they will move to binding arbitration.

To limit the scope of the arbitration, they would mutually agree on the open and resolved issues before turning the matter over to arbitrators.

Delta estimates that financial benefits of a merged airline will be more than $1 billion through cost savings and revenue growth, and it needs the ability to combine the two fleets and workforces to achieve maximum benefits.

Pilots at the nation's two largest airlines are facing much tougher circumstances. At American, where pilots have been in negotiations for more than 18 months, the union's president recently said management was "failing its customers, its shareholders and its employees." At United, pilots learned Monday that 950 pilot jobs would be cut in conjunction with a fleet reduction of 100 airplanes.

Liz Fedor • 612-673-7709