30 October 2008

Green light for Delta-Northwest merger

The Northwest Airlines name will go following completion of its merger with Delta Air Lines.

The combined carrier will carry the Delta name and be based at its headquarters in Atlanta.

The merged airline will serve more than 375 cites worldwide Ã¢â¬' more than any other airline - with approximately 75,000 employees handling more than 170 million passengers a year.

The merger will occur through an integration process over the next 12-24 months after being cleared by the US Department of Justice.

Passengers have been advised to continue to check-in and do business directly with the airline operating their flight just as they did before the merger.

Delta will continue operation of the airlinesÃ¢â¬â¢ separate web sites, www.delta.com and www.nwa.com, as well as the two airlinesÃ¢â¬â¢ reservation systems and loyalty programmes.

As a combined company, Delta will maintain all its hubs at Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK, Salt Lake City, and Tokyo-Narita Ã¢â¬' each of which will benefit from improved global connectivity.

The deal is expected to generate $2 billion or more in annual revenue and cost savings from more effective aircraft utilisation, a more comprehensive and diversified route system, and cost cuts from reduced overhead and improved operational efficiency.

The company expects to incur one-time cash costs not exceeding $600 million to integrate the two airlines.

Ã¢â¬ÅâœIt has a best-in-class cost structure and strong liquidity balance that better positions the company to adapt to the weakening global economy,Ã¢â¬~ a statement said.

CEO Richard Anderson said: Ã¢â¬ÅâœDelta is combining the best of two industry leaders to create a premier global airline that will be unmatched in the scope and level of service we offer our customers.

Ã¢â¬ÅâœAs we have been proving, this is a different type of merger for the industry thanks to the complementary nature of the two airlines and the calibre of the people who will make this the most successful merger in airline history.Ã¢â¬~

by Phil Davies