Delta Air Lines-Northwest Airlines merger

On April 15, 2008, Delta Air Lines and Northwest Airlines announced a merger agreement.^[1] The merger of the two carriers formed, at the time, the largest commercial airline in the world, with 786 aircraft. The merged airline is called "Delta."^[2]

Leading up to the announcement

It had been reported as early as January 2008 that Delta and Northwest were in merger discussions.^[3] News reports covering the event and the official press release reported that the new airline would use the Delta name and its world headquarters in Atlanta. The proposed merger partners lost a combined $10.5 billion in Q1 2008, an amount that exceeded their combined market capitalization.^[4][5]

When the airlines combined, the "new Delta" would be based in Atlanta with a network focused on its Worldport at Atlanta and WorldGateway at Detroit, along with hubs at Minneapolis-St. Paul International Airport, Cincinnati/Northern Kentucky International Airport, John F. Kennedy International Airport in New York City, Salt Lake City International Airport, Memphis International Airport, Narita International Airport near Tokyo, Amsterdam Airport Schiphol, and Paris-Charles de Gaulle Airport.^[6]

Announcement

On April 14, 2008, both Delta and Northwest Airlines announced that they would merge to create the world's largest airline under the Delta name. The Atlanta-based combined airline will have $17.7 billion enterprise value.^[7] The company also stated on April 14, 2008 that it agreed with its pilot union to extend the existing collective bargaining agreement through the end of 2012.^{[citation needed]} The agreement, subject to a vote by the pilots, provided Delta pilots a 3.5% equity stake in the created new airline.^{[citation needed]}

After the Announcement

On September 26, 2008 it was announced that both Delta and Northwest's shareholders had approved the merger.^[8] Approval by a federal antitrust review board's blessing was the last step needed to finalize the deal.^[9] The proposed merger "is likely to produce substantial and credible efficiencies that will benefit U.S. consumers and is not likely to substantially lessen competition," the Justice Department said in a statement issued by its Antitrust Division.^[10]

The deal passed through anti-trust overview from the Department of Justice; as most analysis expected, the deal was not blocked, due to the minimal overlap between the two airlines' routes and very little threat to competition in the industry.^[11] The merger was also expected to be the subject of several hearings on Capitol Hill. Representative Jim Oberstar of Minnesota, who also serves as chair of the House Committee on Transportation and Infrastructure, made clear his opposition to the merger, and he fought it in Washington.^[12] There was also strong support for the merger at the Capitol from legislators from Georgia, including Representative Lynn Westmoreland, Representative David Scott, and Senator Johnny Isakson.^[13] On August 7, 2008, the merger won regulatory approval from the European Union. ^[14]

After a six-month investigation, government economists concluded the merger would likely drive down costs for consumers without curbing competition. On October 29, 2008, the United States Department of Justice approved Delta's plan to acquire Northwest.^[15]

The Delta Air Lines and Northwest Airlines airline operating certificates were merged on December 31, 2009. Reservations systems were merged on January 31, 2010, which officially retired the Northwest brand.

Transition from Northwest to Delta

• In airports where Northwest and Delta operate in separate terminals, one airline moves to another's terminal. For example, in Los Angeles International Airport, NWA, which had a smaller operation, moved into Delta's Terminals 5 and 6 from its previous home in Terminal 2 on June 30, 2009.
• Northwest WorldPerks was merged into Delta SkyMiles on October 1, 2009
• As of 31 December 2009, 216 of NWA's 303 aircraft have been painted in Delta livery.Northwest's three US Hubs have been fully rebranded and gates have been consolidated along with other US airports. Some routes are being transferred to Delta from Northwest and to Northwest from Delta depending on the route.

The "New" Delta Air Lines Fleet

Prior to merging with Northwest Airlines, Delta Air Lines had an all-Boeing (including McDonnell Douglas aircraft) fleet. Delta inherited numerous Airbus aircraft in its merger with Northwest Airlines. Delta was one of the last major airlines to operate the original Boeing 737–200 models, until the last of these aircraft retired in 2006. Delta has the largest fleets of Boeing 757 and Boeing 767 and the largest US operator of the Airbus A330 aircraft of any airline. It is the second largest operator of the McDonnell Douglas MD-80 (behind American Airlines) and the largest operator of the Boeing 767–300 and 767-400ER. Delta's Boeing Customer Code is "32", i.e., 777-232LR, 767-432ER, etc.

See also

• Delta Air Lines
• Northwest Airlines

References

1. ^ Delta/Northwest Announce Merger Agreements (Official Press Release: April 14, 2008)
2. ^ Delta/Northwest To Become Largest Airline In The World
3. ^ http://www.ajc.com/business/content/business/delta/stories/2008/01/11/delta_0112.html
4. ^ TheStar.com | Business | On a wing and a prayer
5. ^ AFP: Delta, Northwest slash their value ahead of merger
6. ^ Image Viewer
7. ^ Delta Newsroom
8. ^ Northwest shareholders OK Delta combo plan Associated Press via Yahoo! News
9. ^ Shareholders Approve Delta-Northwest Merger
10. ^ [1]
11. ^ NWA-Delta merger seen likely to pass U.S. scrutiny
12. ^ http://money.cnn.com/news/newsfeeds/articles/djf500/200804151754DOWJONESDJONLINE000765_FORTUNE5.htm
13. ^ http://www.11alive.com/news/politics_govt/article_politics.aspx?storyid=114468
14. ^ Delta's merger with Northwest gets OK in Europe - chicagotribune.com
15. ^ UPDATE: US Justice Dept Allows Delta-Northwest Airlines Merger