SkyTeam Partner Stands Ready With Strategic, Financial Support

A Delta Air Lines merger with Northwest Airlines could encounter problems. Air France-KLM says money need not be one of them.

In a Thursday report, the Wall Street Journal cited unnamed sources familiar with the deal as saying Air France-KLM, which partners with both Delta and Northwest in the SkyTeam alliance, stands ready to offer strategic or financial backing for a merger between the two.

The Journal says the European carrier could offer cash -- something in short supply at US airlines -- in return for a significant stake in the new, combined US carrier. The offer could make Northwest a much more attractive merger proposition for Delta than United Airlines parent UAL Corp, the other candidate reportedly under consideration.

While Air France-KLM could not own more than 25 percent of the consolidated company under US law, the stake could greatly improve the European airline's access to US markets. If the report proves founded, it suggests Air France-KLM, like Northwest, sees some urgency in controlling its own destiny in what analysts say is a coming wave of industry consolidation.

Or, as Northwest President and CEO Doug Steenland put it to the New York Times last week when the merger rumors hit the news, "If we wait to react to what others do we could be left with options that are undesirable or with no options at all."

FMI: www.delta.com, www.nwa.com, www.airfrance.com