And That Bodes Well For Delta And Northwest

With the looming US presidential election focusing the public's attention on such issues as the war in Iraq, high gas prices and a slump in the housing market, it probably shouldn't surprise us to learn members of Congress doesn't necessarily have airline mergers on their minds. But that's music to the ears of executives at Delta and Northwest.

The Atlanta Journal-Constitution reports Congress is now scheduling hearings for the fall session. Four such meetings were held this spring... but not a single review is on the docket for the upcoming term.

Delta spokeswoman Chris Kelly thinks she knows why. "We believe that Congress saw that antitrust (violations) would not be a significant concern with this deal," she said, noting the planned merger has already passed review by regulators in the European Union.

As for antitrust concerns in the US, that's for the Department of Justice to decide on. Attorneys are now reviewing the planned business case for the combined airline, and a "nay" vote from them could scrap any merger plans. And while lawmakers are forbidden from attempting to directly influence that process, they can indirectly pressure DOJ by influencing the general public.

Kelly notes, however, that there's been little significant public outcry in opposition of the merger. As for anti-trust concerns, Delta's case is aided by the fact a predicted sweep of "merger mania" among other US airlines failed to come to fruition... leaving several competitors in the marketplace for a merged Delta/Northwest, at least for now.

"We are pleased with the progress that has been made and believe we are on track for completion by the end of the year," she said.

That doesn't mean there aren't forces at work that could make a Delta/Northwest merger highly problematic, even if it's approved by regulators. Joseph Tiberi, spokesman for the International Association of Machinists and Aerospace Workers, said IAM remains firmly opposed to any merger that means job losses for its membership at Northwest.

"We’ve been opposed to this from Day One and our opposition will continue," said Tiberi. "We will continue meeting with members of Congress and take all steps possible to protect workers, because Delta and Northwest management clearly are not."

Tiberi points out airline executives have already stepped back from their earlier promise not to furlough any frontline employees due to the merger, telling Congress recently that "high fuel prices may make that impossible," he said.

"We have seen Delta and Northwest change their stories," Tiberi said. "If anything, we are less comfortable with [the merger.]"

Delta and Northwest executives hope to have the merger approved before the end of this year. Both carriers "chose to announce this merger in 2008 in part because of their belief that the Bush administration has been very pro-management," said Fordham University professor Frank Werner.

"Historically, Democrats have been more critical of mergers," he added... though even a pro-corporate Republican administration under John McCain could be skeptical of the benefits of fewer choices in the market, especially if air fares continue to climb.

"I'm a little bit surprised there hasn’t been more outcry from the public," Werner added. Then again... people have other things on their minds.

FMI: www.delta.com, www.nwa.com, www.newglobalairline.com. www.usdoj.gov