"If Anyone Has Any Objections... Yes, You In The Back, In The
Delta and Northwest Airlines have
checked off another big box on their to-do list in preparation for
a merger. The Detroit News reports the FAA has given the two
carriers its blessing
to combine operations within the next 15-18
The two big remaining hurdles are approval from shareholders of
both companies, which is expected Wednesday, and a signoff from the
US Department of Justice, anticipated in the fourth quarter.
If those approvals are received, Northwest shareholders will get
1.25 shares in the new Delta for each share of Northwest stock they
own. Northwest will disappear as a separate entity, and Delta will
become the biggest airline in the world, with major hubs in
Detroit, Atlanta, Memphis, Cincinnati, Minneapolis/St. Paul, Salt
Lake City, New York, Amsterdam and Tokyo.
Speaking of the FAA approval, Northwest Senior VP Ken Hylander
commented, "Our ultimate goal is to implement a seamless transition
for our customers and this is a big step toward that end."
Delta shareholders will meet Wednesday at the Georgia
International Convention Center in College Park, while Northwest's
meeting will be held at the AXA Equitable Center in New York.
Observers told the Atlanta Journal-Constitution they expect the
vote to be a "rubber stamp" approval of the merger, after four
proxy advisory firms all recommended "yes" votes. Airline
consultant Darryl Jenkins tells the paper the volatile economy
makes a stronger argument for the merger.
"There’s some strength in being large, especially when
you’re kind of completing Delta’s network," Jenkins
said. "Northwest is a very good fit to Delta, probably one of the
better fits we’ve ever seen." He adds that maximizing the
benefits of the merger could take a year or two.
Another big vote at Delta's meeting will be a new employee
compensation plan which allocates 15 percent of stock to employees.
Pilots for both airlines have already accepted their end of that
Among the few remaining voices of dissent is the International
Association of Machinists. The union has urged a "no" vote, calling
the merger risky, and noting the combined airline will have a total
pension fund deficit of $7 billion.
The IAM led picketers outside both shareholder meetings