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Fri, Jul 25, 2008

Passengers Sue To Block Delta/NWA Merger

November 5 Trial Date Set

Not everyone is looking towards what many see as the inevitable merger between Delta Air Lines and Northwest Airlines with eager anticipation. A group of airline passengers hopes to block such a deal from going through... and, they're going to have their day in court.

USA Today reports the November 5 trial will be presided over by US District Court Judge Vaughn Walker, with testimony expected to last 10 days. A ruling could come before Thanksgiving.

Opponents to the merger, which was announced April 14, say the combination of Delta and Northwest to create the world's largest airline would violate anti-trust laws, leading to decreased competition and fewer options for travelers.

The plantiffs, a group of 28 airline passengers, filed the suit last month. Shareholders in both carriers are expected to rule in favor of the deal in coming months, and few believe US regulators will stand in the way of the two airlines merging operations.

"Because the government has abdicated its responsibility, private parties are responsible for bringing these actions," said Joseph M. Alioto, a lawyer for the plaintiffs.

Both carriers maintain there will still be competition from other airlines, and they note few current Delta and Northwest routes overlap.

"We don't think there are any antitrust impediments to the merger," said Ben Hirst, Northwest's general counsel. "Whether the merger is analyzed by this Justice Department, a Justice Department in another administration or a court, as long as the examination is objective and professional we're very confident of what the outcome will be."

Alioto maintains that's exactly what one would expect them to say.

"If the merger is allowed, the first thing that's going to happen is they're going to increase the prices. And anybody who thinks they're not going to eliminate a hub is crazy," Alioto continued, adding he plans to call Delta CEO Richard Anderson and Northwest chief Doug Steenland to testify.

FMI: www.newglobalairline.com

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