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May-01-2008Delta-Northwest: Unlikely to Fly(topic overview)
CONTENTS:
- WASHINGTON - A double-header of hearings Thursday gave the chief executives of Delta Air Lines Inc. and Northwest Airlines Corp. a sampling of the skepticism and scrutiny their proposed combination faces on Capitol Hill. (More...)
- Douglas Steenland, left, of Northwest Airlines and Richard Anderson, right, of Delta talk about the two airlines merger plans with the Free Press Editorial Board on Wednesday. (More...)
- 'Over the longer run, we would expect that there will be additional international opportunities from Detroit over time,' Richard Anderson, Delta's chief executive, told a meeting of the Detroit Free Press editorial board. (More...)
- The Department of Transportation a week before the agreement tentatively approved transatlantic antitrust immunity for six SkyTeam alliance members and gave the nod to a four-way joint venture for Air France, Delta, KLM and Northwest. (More...)
- From USA Today: "Airlines could spend up to $3.2 billion over 10 years to collect fingerprints from foreign travelers heading out of the country, according to a government proposal. (More...)
- Air Line Pilots Association: 4,500 mainline pilots Delta At Delta, it's a different story. (More...)
- For decades, "Air travel has been one of the incredible bargains for U.S. consumers," says Tom Horton, American Airlines' chief financial officer. (More...)
- "Two pilots suspected of falling asleep on a flight from Honolulu to Hilo in February were fired last week by the airline go! (More...)
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WASHINGTON - A double-header of hearings Thursday gave the chief executives of Delta Air Lines Inc. and Northwest Airlines Corp. a sampling of the skepticism and scrutiny their proposed combination faces on Capitol Hill. Delta CEO Richard Anderson and Northwest CEO Doug Steenland first told House and then Senate lawmakers that their airlines would be stronger together than they are apart, more competitive with large foreign carriers and better equipped to handle record fuel prices that led them on Wednesday to report a combined first-quarter loss totaling $10.5 billion. They reiterated that no hubs will be closed, no large-scale layoffs are planned and that the combination will create roughly $1 billion in cost savings. "Oil is a game changer and this merger makes us stronger," Mr. Anderson said, estimating that no more than 1,000 corporate positions will be eliminated. [1] Sen. Charles Schumer (D-NY) says he has met with Delta's CEO to try and minimize any negative impacts a merger with Northwest Airlines would have on upstate New York air travelers. Earlier this month, Atlanta-based Delta Air Lines Inc. (NYSE: DAL) and Eagan, Minn. -based Northwest (NYSE: NWA) announced a $17.7 billion merger deal. Schumer said he met with Delta CEO Richard Anderson last week. The senator said he was concerned about the impacts a merger would have after reading Anderson's comments that because of fuel costs and other economic conditions, domestic carriers would need to raise fares by 15 percent to 20 percent.[2]
WASHINGTON With Delta Air Lines and Northwest Airlines considering a merger, if they go through with it, it won't impact service at Stewart Airport, Senator Charles Schumer said Monday. Schumer spoke with Delta CEO Richard Anderson and got a commitment from him that no flights from either carrier would be cut at the Newburgh airport. At present, Northwest flies to its Detroit hub and Delta flies to its Atlanta hub.[3]
DETROIT -- The day after the merger of Delta and Northwest airlines is complete, fliers using the new airline at Detroit Metropolitan Airport will hardly notice, the CEOs of the two airlines said Wednesday. That kind of seamless transition is possible because the two airlines are a natural fit, Delta CEO Richard Anderson and Northwest CEO Doug Steenland said in a meeting with The Detroit News on Wednesday. The two companies will work well as one because they already cooperate with codesharing and frequent flier programs, operate networks with little overlap and have marked international route strengths that complement each other well, the CEOs said.[4] According to old buddies Richard Anderson and Doug Steenland, the proposed merger of Delta and Northwest airlines not only will sail through the usually tough antitrust review process, it will usher in a new era of airline prosperity and ease consumer access to the world. The merger is already facing challenges, ranging from lawmakers and consumers worried about reduced competition, abandoned hubs and higher prices for both domestic and international flights, to distrustful employees and some industry veterans who have seen past proposals crater before consummation.[5]
"The benefits are there with or without high fuel prices." Anderson estimated the new Delta would be profitable within two years after the merger's close, despite record fuel prices which helped push both airlines -- along with most of their competitors -- to report large first-quarter losses. Delta and Northwest are uniquely positioned to marry and be stronger, in a large part because they "cleaned up" their operations during their separate bankruptcy reorganizations that ended last June, the CEOs said. The next logical step for growth -- and a return to profitability -- is to combine Delta's strengths along the East Coast, in the Mountain West and to Europe, Latin American and Africa with Northwest's dominance in the upper Midwest and to Asia, they said. Steenland said combining the two companies allows the new Delta to throw out the "survival playbook" airlines have been tied to through years of cutthroat competition with low-fare carriers and other challenges such as economic downturns, the Sept. 11 terrorist attacks and now record fuel prices. The combination of the two companies will help Detroit Metro grow its presence as a key international gateway, especially on routes to Asia.[4] Not everyone is thrilled with that prospect. Phoenix-based industry consultant Hubert Horan, who used to run Northwest's international division as it developed its trans-Atlantic alliance with KLM, says he doesn't believe the $1 billion in annual revenue improvements and cost savings touted by Anderson and Steenland is enough to offset the huge financial risks associated with trying to integrate two vastly different companies. Horan says his biggest concern is the potential for steep increases in international fares. "Everyone talks about the need to consolidate and reduce capacity on the domestic side because of high fuel prices," he says. "But they're justifying this merger all on the international side." Delta and Northwest officials insist that no hubs would be closed after their merger, but they left open the possibility of further shrinkage and route changes. Both carriers have announced significant schedule cutbacks that will begin later this year in response to increasing oil prices.[5]
With today's unprecedented jet fuel prices, airline executives and aviation analysts are warning that only extreme fare increases and dramatic cutbacks in flights will enable the industry to cover a 2008 jet fuel bill the airlines' trade group projects will be 44% higher than last year's. By this time next year, there could be as many as 20% fewer seats available if carriers respond to oil prices well above $100 a barrel by cutting as many flights as securities analysts such as JPMorgan's Jamie Baker are suggesting. That would be like shutting down a carrier the size of American Airlines, (AMR) the world's largest, which, with its regional carriers, operates 4,000 flights daily. That alone would sharply increase demand and prices for plane tickets. Such huge cutbacks in airline capacity would transform the industry that Americans have come to know and reshape the way they travel.[6]
Airfares. Oil prices, not merger plans, are affecting airfares, they said. Asked about fares on some routes (Detroit-Minneapolis, Detroit-Portland, Maine) that have skyrocketed in the last three weeks, they responded that price on a specific route is a function of how full the flights are. Overall, ticket and fee prices may continue to rise this year and the airlines may cut capacity further if oil prices don't come down. The CEOs said that the merger will help keep them a healthy airline.[7]
One of the biggest challenges facing Delta Air Lines Inc. and Northwest Airlines Corp. as they piece together their merger plan is convincing employees that the marriage is the best way to ensure the airlines' financial health and workers' job security. Airline executives, who want a merger finalized by the end of the year, say they don't expect much trouble getting approval from federal antitrust regulators. Industry watchers agree, given the small amount of overlap in the airlines' routes and in the cities they serve.[8] As Delta Air Lines Inc. and Northwest Airlines Corp. try to woo regulators and shareholders to support their proposed combination, they are courting employees, too, with new travel privileges. The companies said Tuesday that starting May 6 more than 100,000 employees and retirees of Atlanta-based Delta and Eagan, Minn. -based Northwest will get reciprocal access to both airlines' route systems for free, standby travel. Many airlines allow employees and their immediate family members free flights on their respective carrier provided there is a seat available. Some retirees also have such travel privileges. Currently, if a Delta employee wanted to fly in the main cabin on a Northwest flight, he or she would have to pay a small fee, Delta spokeswoman Betsy Talton said.[9] The FINANCIAL -- More than 100,000 employees and retirees of Delta Air Lines (NYSE: DAL) and Northwest Airlines (NYSE: NWA) will gain reciprocal access to both airlines''' worldwide route systems for free, standby travel, effective May 6.''[10]
Northwest Airlines CEO Doug Steenland hauled in compensation worth $27 million last year, although more than two-thirds of that soon evaporated along with the airline's share price, according to a regulatory filing Tuesday. The airline also said Steenland is set to get almost $22.1 million when he leaves after Northwest is acquired by Delta Air Lines Inc., according to Northwest's filing with the Securities and Exchange Commission.[11] MINNEAPOLIS -- Northwest Airlines CEO Doug Steenland hauled in compensation worth 27 million dollars last year, but more than two-thirds of that soon evaporated along with the airline's share price. The airline also says in a regulatory filing that Steenland will get about 22 million dollars when he leaves after Northwest combines with Delta Air Lines. That's up from a previously disclosed package of nearly eight million dollars.[12]
Northwest Airlines Corp. CEO Douglas Steenland got $7.7 million in total compensation in 2007, up from $2.7 million he got in 2006. He could get millions more if NWA's merger with Delta Air Lines Inc. goes through. In documents filed with the SEC Tuesday, it was revealed that Steenland was paid a base salary of $531,919 up from $516,384 he got in 2006. He also got $3.5 million in stock awards, in 2006 he did not receive any stock awards. He received $2.2 million in incentive compensation in 2007, up from $994,146 in 2006. The methodology used by Minneapolis-St. Paul Business Journal, a sister publication, involves the total figures found in the proxy's Summary Table since those numbers represent the accounting charge -- the impact on earnings -- for that fiscal year.[13] NEW YORK, April 30 (Reuters) - Northwest Airlines (NWA.N: Quote, Profile, Research ) Chief Executive Douglas Steenland will get about $18.3 million in a payout if the proposed merger with Delta Air Lines (DAL.N: Quote, Profile, Research ) goes through in 2008 and if his employment is terminated on Jan. 1, according to a regulatory filing.[14] Northwest Airlines Corp. said Chief Executive Officer Douglas Steenland will receive a big payout if Delta Air Lines Inc.' s proposed acquisition of Northwest closes this year and his employment with Northwest is terminated on Jan. 1.[15]
Since proposing a titanic merger earlier this month, executives at Delta Air Lines ( DAL ) and Northwest Airlines ( NWA ) have been busily laying out the rationale for a deal that would create the world's largest air carrier.[16] • Getting a combined contract with the unions representing the 6,300 active pilots at Delta and 4,500 at Northwest. Just days before the merger was announced on April 14, Delta worked out a contract deal with its pilots, giving them pay raises and an equity stake in the new airline in exchange for contract language the airline needed to more easily combine Delta and Northwest routes. The Northwest pilots were irked they weren't included in the deal, and vowed to fight the merger. The pilots could be on the way to resolving their differences. Two weeks ago, the Air Line Pilots Association said negotiators from both airlines will aim to work out a joint contract before the airlines combine. Once that is done, the chairmen of the two chapters say they will negotiate a seniority agreement.[8] Failure to reach a deal on seniority is what kept the pilots from getting a joint contract in place before Delta and Northwest announced plans to create the world's largest airline. Because seniority is so critical to pilots' careers -- determining their pay, the planes and routes they fly, even their days off -- it could be grueling process. During earlier talks on seniority, Delta pilots said they wouldn't agree to arbitration to resolve the issue, presumably because past rulings would have favored the Northwest pilots' position on merging the list. Earlier this month, however, the Delta pilots union switched gears, saying it was willing to turn the seniority issue over to an arbitrator. The airlines appear determined to get a deal in place, because operating the new Delta with two seniority lists would hurt the company's ability to redeploy its large fleet to get the right sized planes on the right routes, a cornerstone of the merger's cost-savings plan. For now, the Northwest pilots are on the record as opposed to the merger, but that could change as soon as they get their own deal.[8]
The proposed combination has already ruffled the feathers of some employees, particularly at Northwest. After the deal was announced, Northwest pilots and the union representing most of Northwest's ground workers immediately announced they would fight the combination. Northwest pilots are upset Delta management cut a deal with Delta pilots that gives them new benefits that currently don't extend to Northwest pilots. The International Association of Machinists and Aerospace Workers is upset Northwest didn't consult with the union that represents its baggage handlers, ramp workers and ticket agents before announcing the combination. Delta and Northwest executives have said they want to get a joint pilot contract and seniority agreement inked before the combination deal closes. Pilots at Delta and Northwest are looking to resume negotiations on merging their work forces.[9] Joining the pilots in opposition are the Northwest baggage handlers, ramp workers and ticket agents represented by the International Association of Machinists and Aerospace Workers, about 9,500 employees total. Spokesman Joe Tiberi said his union was unhappy at not being consulted before the merger was announced. Tiberi said the machinists are most skeptical of Delta's promise that no front-line workers will lose their jobs as a direct result of the merger, something Anderson and Northwest CEO Doug Steenland assured during a string of press conferences and reiterated again at Congressional hearings on the proposed transaction last week. Both CEOs said the new Delta would shed fewer than 1,000 jobs, with those cuts coming in management and administrative ranks at the Atlanta and Eagan, Minn., headquarters. "there's no way they can combine without massive losses of jobs," Tiberi said.[8]
The two executives, who earlier this month announced plans to combine Delta, the nation's No. 3 air carrier, with No. 5 Northwest into the world's largest airline, said the deal is different than other mergers Michigan has seen in recent decades. They reiterated a message they've delivered to employees and lawmakers alike: it is a marriage built on growth, not cuts. "This creates a smarter, stronger company," Anderson said.[4] High jet fuel prices helped prompt the April 14 merger deal between Delta and Northwest (NWA) airlines, whose marriage would produce the world's biggest carrier. Delta and Northwest have pledged not to close any of their seven airport hubs if federal regulators approve their deal, but both already are slashing unprofitable flights.[6] Delta announced last week that it would acquire Northwest in a stock-swap deal, which still must be approved by regulators and shareholders. During an appearance in Boston on Wednesday, Southwest Airlines Co. CEO Gary Kelly cited industry pressures as he suggested that a merger isn't appealing right now to the Dallas-based carrier. "My own view is that with the current fuel outlook that we have and the near-term economic outlook, the thought of acquiring another airline is just daunting because of the complexity involved and the investment that's going to have to take place up front," he said.[17]
The proxy also detailed that after Eagan, Minn. -based Northwest (NYSE: NWA) merges with Atlanta-based Delta, in a deal valued at $17.7 billion, Steenland will get an $18.3 million payout, contingent upon the deal being completed by the end of 2008. It is expected that Delta CEO Richard Anderson will take the helm of he newly merged carrier, and Steenland will become a member of Delta's board, but leave his CEO post. Northwest (NYSE: NWA) operates one of its three U.S. hubs at Memphis International Airport.[13] Contingent on shareholder and regulatory approval, the merged airline within eight months plans to begin integration and relaunch under the Delta Air Lines name, with former Northwest CEO and current Delta CEO Richard Anderson at the helm. "From my perspective, it's a two-edged sword," said Lockheed Martin director of corporate travel services Richard Wooten. "Somehow they need to get healthy, and maybe this is what it takes, but on the other hand, this will limit competition and may harm smaller markets." Other buyers shared similar concerns in a National Business Travel Association survey conducted prior to the announcement, which showed only 22 percent of 207 U.S. travel buyer respondents viewed consolidation as "a positive development for the business travel community."[18] Steenland also received about $329,000 in "other compensation," which included $58,552 in tax reimbursements, $25,736 in travel benefits, and $135,964 in cash payouts of company retirement contributions that exceeded IRS limits. Delta Air Lines Inc. paid CEO Richard Anderson $11.3 million for the four months he ran Delta last year, including a base salary of $200,000. Most of his pay was stock options valued at almost $10.6 million on the day they were granted, and they also have fallen in value.[11]
"You can't underestimate the spike in fuel prices and how it is fundamentally changing the industry," says Delta Air Lines (DAL) CEO Richard Anderson, who estimates ticket prices would have to rise 15% to 20% just to cover fuel costs.[6] "An airline ticket has got to reflect the full cost of fuel," Anderson said. He also warned that hiking fares that much could dampen demand and force U.S. carriers -- already retrenching domestically -- to cut even more capacity. Speaking of fares, Northwest CEO Doug Steenland suggested most U.S. airlines have no other place left to look as they attempt to offset skyrocketing fuel prices.[19] U.S. airlines must raise fares by 15 percent to 20 percent simply to break even at current fuel prices, Delta CEO Richard Anderson told Associated Press.[19] Delta CEO Richard Anderson told reporters in Washington, D.C. last week that domestic airlines need to raise fares by 15 percent to 20 percent to keep up with rising costs.[20]
'''Non-revenue travel privileges continue to be one of the most popular aspects of airline employees''' total compensation and benefits,''' said Delta CEO Richard Anderson.'' '''With great coordination and partnership between the airlines, we are offering an immediate benefit by extending free travel on each other'''s flights ''' something that has never been offered this quickly following the announcement of a major airline merger.'''[10] The enhanced program will offer flights to 390 destinations across 67 different countries. Richard Anderson, Chief Executive of Delta, said: "With great coordination and partnership between the airlines, we are offering an immediate benefit by extending free travel on each other's flights - something that has never been offered this quickly following the announcement of a major airline merger.''[21]
The first joint venture from the Delta and Northwest (NWA) merger will see employees benefit from access to flights with either airline. From May 6, employees and retirees from either airline will be able to use both of the carriers' networks for free, standby travel.[21]
Northwest Airlines CEO Doug Steenland added, "We wanted our own employees to be the first to benefit from the Northwest/Delta combination with a travel benefit that is unique in the airline industry. Having immediate access to the combined network will open up a whole new world of travel opportunities, giving both airlines' employees a sample of the benefits our customers will also experience in the new global airline."[10] St. Paul, Minn. Northwest Airlines CEO Doug Steenland currently stands to receive about 18.3 million dollars in severance after Delta Air Lines acquires the company.[22] Merger discussions between Eagan-based Northwest Airlines and Atlanta-based Delta Air Lines appear to be on a fast track.[22] To no one's surprise, Northwest's pilots and ground workers already are strongly opposing the deal. The pilots, members of the Air Line Pilots Association, couldn't reach a merger integration deal with their counterparts at Delta during talks in February and March. They feared that the seniority integration plan preferred by Delta's ALPA members would have severely reduced the career earnings of most Northwest pilots. Delta and Northwest also are likely to find the merger to be a tough sell in Congress, where the list of those who either are opposed to the deal or not yet convinced is growing.[5]
Following months of speculation and reported false starts, Delta and Northwest on April 14 publicly proposed to create the world's largest airline through an all-stock merger deal, valued at $17.7 billion.[18] If the two airlines join, each of Steenland's Northwest shares and options will convert to 1.25 Delta shares, the same rate as other shareholders. The change-in-control payout also includes $3.1 million in excise taxes that Northwest won't have to pay if Steenland's employment ends after Jan. 1, 2009, after a merger that closes near the end of this year, which is what the company has said it is aiming for.[11] Adjusting for the drop-off in the share price, Steenland's pay would have been $8.4 million. Last year he took in $1.8 million. His 2007 pay included a base salary of almost $532,000 and incentive pay of $2.2 million, along with the remaining value of the restricted shares. Northwest's board doubled a portion of Steenland's incentive pay to $1.6 million because its profit margin was the highest among five comparable airlines.[11] Airlines have been losing money because of skyrocketing fuel prices, and Northwest's share price has dropped from around $25 when it emerged from bankruptcy protection May 31 to $9.36 Tuesday. The pay figure also includes restricted shares worth $18 million when they were granted, but which were worth $5.3 million this month, according to the filing.[11] Excluding special items -- primarily a $6.1 billion non-cash charge relating to the drop in Delta's market value due to sustained record fuel prices -- the airline lost $274 million in the first quarter. Northwest took a $3.9 billion charge of its own related to its market value decline. Its loss came despite a 9 percent increase in sales, and Northwest, too, missed analysts' earnings expectations.[17] ATLANTA -- Delta and Northwest, seeking to combine to create the world's largest airline, posted losses Wednesday totaling $10.5 billion for the first three months of the year due to exorbitant fuel prices and write-downs of their companies' value.[17]
Excluding the accounting charge and losses from some fuel hedges, Northwest said it would have lost $191 million in the quarter. Both airlines have been hampered by the steep rise in fuel prices.[17]
At current fares and fuel prices, the flights need to be 85% full for JetBlue to break even on them, according to airline data. Chicago-based United Airlines, (UAUA) the nation's second-biggest airline, will retire at least 30 of its oldest, least-fuel-efficient jets this year. United lost $537 million in the first three months of this year, its biggest loss since emerging from bankruptcy reorganization in 2006.[6] The airlines' goal: Push up the average price paid for each remaining seat to generate the maximum revenue per gallon of fuel burned. Delta, the USA's third-biggest carrier, will get rid of up to 20 full-size jets and up to 70 small regional jets this year. It's pulling out of several cities, including: Atlantic City; Islip, Long Island; Tupelo, Miss.; and Corpus Christi, Texas. This month, JetBlue (JBLU) will halt service between New York and Tucson. That route's current flights one a day each way generally are 70% full.[6] "Across upstate New York we continue to see a demand for increased air service, which is a terrific sign for the region," Schumer said. "It means that more people are traveling to and from our cities, doing business, investing in the local economy, and taking advantage of tourism opportunities." Schumer said when meeting with Anderson, "I made it clear that this potential merger absolutely cannot jeopardize air service upstate and received several assurances from him that rates would not climb." Schumer said he made some specific requests to Anderson as well. For the Albany, N.Y., region, he asked Delta to increase the number of flights in and out of Albany International Airport. Schumer said Anderson assured him that the nearly 4,500 Delta employees in New York state would not lose their jobs as a result of the merger.[2] "Across Upstate New York we continue to see a demand for increased air service, which is a terrific sign for the region," said Schumer. "It means that more people are traveling to and from our cities, doing business, investing in the local economy, and taking advantage of our tourism opportunities. It also means that as we see our entire airline industry struggle in the face of economic turmoil and sky-high oil process, we have to be especially proactive in ensuring travel options across Upstate are not only retained, but expanded." Schumer said in his meeting with Anderson, "I made it clear that this potential merger absolutely cannot jeopardize air service upstate and received several assurances from him that rates would not climb."[3]
Douglas Steenland, left, of Northwest Airlines and Richard Anderson, right, of Delta talk about the two airlines merger plans with the Free Press Editorial Board on Wednesday. [23] Steenland and Delta CEO Richard Anderson came to the Detroit Free Press editorial offices this afternoon to answer questions about the merger, which must be approved by federal officials.[7]
Nearly half of Northwest's 350 jets were made by Airbus. That wide variety of planes will allow the combined carrier to better target destinations ranging from small Midwestern cities to bustling Asian metropolises, the executives said." Delta CEO Richard Anderson tells the Post that "in a network of this size, you really do need to be able to optimize the airplane to the route." He also says that having a mixed Airbus-Boeing fleet also could help the carrier's bargaining position when it's time to order new jets.[19]
The carriers said the combination is "pro-competitive" with "direct competitive service on only 12 of more than 1,000 nonstop citypair routes currently flown." Though both carriers continue to reduce domestic capacity independent of the merger agreement, Delta president and CFO Ed Bastian said the deal "is not predicated on domestic capacity rationalization," and the carriers intend to maintain Delta's hubs in Atlanta, Cincinnati, New York-JFK and Salt Lake City, and Northwest's in Detroit, Memphis, Minneapolis/St. Paul, Amsterdam and Tokyo-Narita.[18] The new Delta expects to gain an annual $1 billion "from more effective aircraft utilization, a more comprehensive and diversified route system and cost synergies from reduced overhead and improved operational efficiency," but expects to incur up to $1 billion in integration costs. JPMorgan aviation analyst Jamie Baker said the merger is "light on synergies," as each carrier exited bankruptcy protection last year and "rehabilitated its cost structure, leaving less to cut from here."[18] Costs have risen 300% since 2002, wreaking havoc on the airlines' bottom lines. Northwest alone expects to spend $1.4 billion more this year than last year on fuel.[16]
Eagan-based Northwest (NSYE: NWA) which disclosed earlier in the week a first-quarter loss of over $4 billion, plans to match similar fare increases initiated by carriers such as United Airlines, American Airlines and Delta Air Lines last week.[20] To cover higher fuel costs, air fares have to go up." Atlanta-based Delta Air Lines Inc., the nation's third-largest carrier, said its loss widened in the first quarter to a whopping $6.39 billion.[17]
In dealing with high jet fuel prices, Delta Air Lines, the nation's third-largest carrier, has announced a rise in domestic fares to, in most cases, US$10 to US$40 per roundtrip.[24]
Consumers already are getting a glimpse of travel's costlier future. The website Travelocity reports that fares this summer to eight popular destinations including Boston, New York, Chicago, South Florida, Denver and Los Angeles are up by at least 18% since last summer. A family of four would pay Delta Air Lines about $2,500 to fly from Cincinnati to Los Angeles this summer if they bought tickets now.[6]
United also switched to small jets at Manchester; seats sell out faster. Last week, his ticket for a non-stop flight from Boston to San Francisco cost $2,400 round trip, partly because he changed his original ticket, incurring extra charges. "I was stunned," he says. "Everyone has their limits, both individuals and corporate clients." A USA TODAY/Gallup survey in April found that 45% of air travelers would be less likely to fly this summer if fares are higher. Driven by fare increases, revenue for U.S. carriers rose about 10% in the first three months of this year, a healthy jump in normal times.[6] Even Southwest, which has reported 17 years of uninterrupted quarterly profits, lost money on flying last quarter. It reported a $34 million profit only because of its sophisticated fuel-hedging program. Through aggressive trading in oil futures contracts, Southwest was able to knock $302 million off what it would have paid had it bought all its fuel at current market prices. The carrier's executives acknowledge that they can't play that risk-laden game forever. After holding the line against fare increases during the first three months of this year, Southwest raised fares twice during the first two weeks of April.[6]
"The reality is that there's no U.S. airline that has a sustainable business model if $117-a-barrel oil prices endure," says Dave Emerson, head of Bain & Co.' s global airline consulting practice. Southwest, which has been aggressively expanding at U.S. airports for 35 years, will not grow in the second half of this year. Nor will Orlando-based discounter AirTran, which had been growing at double-digit annual rates since 2002.[6] Record-high oil prices are threatening to ground millions of travelers who have grown accustomed to flying for fun and business during the past 30 years. Air travel in the USA has grown at a rate five times faster than the population since 1978, when deregulation first allowed airlines to compete by setting their own prices and routes without government approval.[6]
'We're optimistic that the Justice Department' will conclude that the transaction should be allowed to proceed,' Anderson said. He also warned that Delta may have to make even more cuts in the number of seats it flies later this year if oil prices, already at record levels, climb higher.[23] Texas oil billionaire T. Boone Pickens, who thought last year's run-up in oil prices would fade, has reversed course. BP Capital Management, Pickens' energy-oriented hedge fund, is investing based on his belief that prices will rise to $125 a barrel soon, then move past $150. This week, the head of OPEC, Algerian oil minister Chakib Khelil, told reporters that oil likely is headed to $200 a barrel and there's nothing the cartel can do to stop it. He said forces other than the amount of crude oil pumped out of the ground are driving up prices.[6] "I guarantee you that if oil prices remain at the same level you'll see even more reductions in capacity," AirTran (AAI) CEO Bob Fornaro said last week. Airlines have raised fares 10 times since the middle of December, and several are hinting at an 11th increase this week.[6]
"We have an antitrust division that approves mergers left and right," Mr. Conyers said. If Delta-Northwest is approved, he expressed concern that it will "result in acascade of other mergers," including Continental Airlines-United Airlines and American Airlines-US Airways, and lead to three mega-carriers competing only among themselves. After leaving the House hearing, Mr. Steenland told reporters he had asked lawmakers earlier this week to keep fuel prices in check. He urged them to establish a comprehensive energy policy and said not buying oil for the Strategic Petroleum Reserve would be a good idea, echoing some of lawmakers' own ideas.[1] During more than four hours of hearings, the airline executives acknowledged that sustained high fuel prices could reduce the frequency of some less profitable routes, but said market competition would continue to dictate air fares, flight options for travelers will rise and that only corporate jobs would be cut.[1]
For instance, joining the two airlines' complementary route networks will enable the merged carrier to offer new flights from Detroit to Sao Paulo, Brazil, the automotive capital of South America, said Doug Steenland, Northwest's chief executive.[23] "Travel patterns are going to change," predicts Northwest CEO Doug Steenland. Travelers likely will begin seeing big changes this fall as major airlines reduce service more aggressively by dropping routes, substituting smaller planes and reducing the number of daily flights on a route.[6]
'Detroit is really important because of where it is located,' said Anderson, a former Northwest chief executive who will lead the combined carrier. He and Steenland said that creating a stronger airline will lead to stronger hubs, with better service to hundreds of cities and towns.[23]
The cost 'is above and beyond our biggest nightmare,' says Douglas Lavin of the International Air Transport Association. A Delta-Northwest merger would create an airline that would have a wide variety of different aircraft types in its fleet. That's a good thing, the top executives of Delta and Northwest say as they tout their proposed merger, according to The Washington Post.[19] The carriers said the merger would accelerate four-way joint venture integration with Air France and KLM, and Delta's Anderson claimed DOT's approval of the joint venture smooths any international regulatory hurdles. Continental Airlines said it would reevaluate its SkyTeam position in light of the merger. Despite the speculation that Continental Airlines and United Airlines swiftly would follow the consolidation course, Continental on April 27 said its board of directors agreed with management's recommendation to "not merge with another airline at this time."[18]
Continental, which has previously held discussions with United Airlines, told employees that it has to reconsider staying independent and "make sure we remain a strong long-term competitor." The Delta-Northwest merger would create a global juggernaut that would appeal to large global corporations eager to negotiate bulk travel deals with a carrier that can meet nearly all of their travel needs around the world.[5] The Justice Department also must sign off on the deal. Although those processes are likely months away, Delta and Northwest are offering the employee travel privileges much sooner. The two carriers have been trying to convince employees that the deal will be good for them in the long-run, and in the short-run some will get equity in the new company.[9] Delta announced April 14 that it is buying Northwest in a stock-swap deal that would create the world's largest carrier. Northwest shareholders still must vote whether to allow the acquisition of their company by Delta, while Delta shareholders must vote whether to issue new stock as part of the deal.[9]
In a J.D. Power & Associates survey of U.S. airline-customer satisfaction released last June, Northwest was the lowest ranked while Delta was squarely in the middle, behind carriers including JetBlue Airways ( JBLU ), Southwest Airlines ( LUV ), and Continental Airlines ( CAL ). That's why the new company would jettison the Northwest brand, leaving only the name Delta.[16] Edward Lawler, director of the Center for Effective Organizations at the University of Southern California, who has studied and written about the airline industry, says the move is a wise one: "Northwest has long had a terrible brand." Even as the Delta name lives on, the company will have an opportunity to reshuffle the brand's many graphic elements, including its logo, airport signage, tagline, and aircraft. According to Rob Giampietro, one of the founders of the New York design studio Giampietro+Smith, refreshing and blending key elements of both airlines' identities could add "a dash of creative energy" to the brand. "Brandwise," he says, "while it may not be the best time in the lives of either company, there is still a lot of brand equity and recognition."[16] The red ink from Delta and Northwest put into focus the enormity of the challenge the airline industry faces to become profitable again amid $120-a-barrel oil -- even with the benefits that consolidation can bring.[17]
With a combined first-quarter loss totaling $10.5 billion acting as a somber reminder of the difficulties facing the would-be company--and the airline industry as a whole--the deal's champions have argued a tie-up would strengthen the new firm's distribution of worldwide routes, help insulate it from a volatile fuel market, and even save billions of dollars by flying the same number of passengers on fewer flights.[16] Oil industry analysts say it could be years before new oil supplies can be tapped, new refineries built or alternatives to petroleum-based fuel developed and produced in enough quantities to fuel the airlines, which launch 30,000 flights a day.[6]
The new flights between Detroit and Monterrey are available for booking at www.nwa.com, through travel agencies or by calling Northwest Airlines Reservations at 1-800-225-2525.[25] With the new program, that employee would fly for free on Northwest, and vice versa, Talton said. The privileges cover all employees of both airlines as well as retirees who already have travel privileges, Talton said.[9]
The new Delta is expected to employ about 75,000 people after Delta and Northwest airlines are fully integrated.[8] The latest hike will be in the form of a fuel surcharge and will cover the bulk of Atlanta-based Delta's route system. Northwest Airlines is also said to be about to follow the Delta initiative and hike its own fares.[24] Delta and Northwest have announced their intention to merge, though the airlines must first clear several hurdles -- such as gaining regulatory approval. The comments from both CEOs came Tuesday in Washington, where the pair were to meet with lawmakers. They told reporters they are confident the Justice Department will not require them to give up any gates or slots on the few routes where they do overlap because ample competition exists in those cities.[19]
Fifty-three percent of the buyer respondents to the NBTA survey said the merger would bolster access to international routes. Delta and Northwest said the merger would create more than 6,000 new citypairs, describing their networks as "complementary," with Delta's strongholds in the South, Mountain West, Northeast, Europe and Latin America, and Northwest's positions in the Midwest, Canada and Asia.[18] Neither Delta nor the union has speculated on the outcome of the current election. Corey Caldwell, spokeswoman for the Washington, D.C. -based union, said her organization has received strong support among Delta attendants in the latest unionization effort. For their part, Northwest's attendants see the merger as an opportunity to negotiate -- for them and their Delta counterparts -- a new contract with raises.[8]
An effort to unionize Delta flight attendants got under way before the merger talk got serious. The Association of Flight Attendants, which represents 7,200 Northwest workers, is trying to get the 12,000 Delta attendants to join its ranks.[8] Getting the OK from the front lines -- where thousands of workers face career-altering changes -- may not be so easy. Several employee groups on the Northwest side, where most are unionized, have said they'll fight the merger.[8] The wildcard, according to industry expert Bill Swelbar, is how the National Mediation Board, which oversees airline-union relations, will categorize workers. Northwest, for example, breaks down its employee counts by what union they are represented by. Delta counts its employees based on job classification.[8] • Merging the two work forces, one of which is mostly unionized (Northwest, with 22,450 union employees of 32,000 total) and the other which is not (Delta, where 6,300 pilots and very small number dispatchers out of 47,000 employees are union-represented).[8]
Associated Press - April 29, 2008 4:05 PM ET ATLANTA (AP) - As Delta and Northwest try to convince regulators and shareholders to support their proposed merger, they are also courting employees[26]
Delta and Northwest just completed tacking on another $40 extra to many roundtrip domestic tickets earlier today, and Anderson said airfares would have to rise another 10 percent to 20 percent across all carriers before fuel costs are fully covered by ticket revenue.[4] Delta recorded a $585 million year-over-year increase in the cost of fuel in the first quarter, while Northwest's fuel costs increased $445 million from a year earlier.[17]
The cost of jet fuel in New York is more than $3.50 a gallon, compared with just more than $2 a year ago. House Judiciary Committee Chairman John Conyers Jr., D-Mich., said he was keeping an "open mind" on Delta-Northwest, but then blasted the Bush administration's merger-friendly Justice Department.[1]
The average cost of airline tickets in the U.S. was up 10.2% last month compared with a year ago, according to the Bureau of Labor Statistics, as airlines struggle with surging fuel prices and a softening U.S. economy.[27] Airlines have been hiking fares in recent months to deal with soaring fuel prices, spurred by oil, which currently stands at nearly US$120 a barrel.[24]
46 percent agreed the deal would make for a more financially stable carrier. "Travel buyers know that airline consolidation, such as the Delta-Northwest merger, can create more financially stable airlines with stronger networks," Maguire said.[18] Since the late 1990s, Northwest had held the preferred stock that precluded Continental from pursuing certain "business combinations without Northwest's consent," Continental said. While the reclamation of the share made a merger possible, Continental CEO Larry Kellner and president Jeff Smisek in a memo said, "The board very carefully considered all the risks and benefits of a merger with another airline, and determined that the risks of a merger at this time outweigh the potential rewards, as compared to Continental's prospects on a standalone basis."[18] The payout includes about $6.2 million in estimated pension benefits and the value of outstanding restricted stock units based on the closing price of a Northwest common share as of April 22, which was $7.47, the filing with the U.S. Securities and Exchange Commission said.[14] Steenland's $27 million pay figure includes almost $6 million in stock options granted soon after Northwest emerged from bankruptcy protection last summer. They're currently worthless because their exercise price is around $22 -- more than double Northwest's current share price.[11] Steenland's 27-million-dollar pay figure from last year includes almost six million dollars in stock options granted soon after Northwest emerged from bankruptcy last summer. They're currently worthless because Northwest's share price has plummeted. The pay figure also includes restricted shares worth 18 million dollars when they were granted, but which are worth only about five million dollars now.[12]
Last year, Northwest had a profit of $764 million, not counting bankruptcy-related items.[11]
Northwest is planning to merge with Atlanta-based Delta, in a deal valued at $17.7 billion.[20] Reciprocal access for Delta, NWA workers Your guide to cheap airline tickets & hot airfare deals.[21] • The International Association of Machinists -- representing 9,500 Northwest ground workers, baggage handles and ticket agents -- is opposed to the merger. Other smaller unions represent Northwest mechanics, meteorologists and dispatchers.[8] Though buyers also were quick to point out that the merger removes a competitor from play, Northwest CEO Doug Steenland said low-cost carriers would continue to ensure domestic pricing discipline.[18] The only Northwest groups to clearly have the necessary 35 percent going into the merger are the pilots, who are already unionized, and the flight attendants.[8] In today's economy the uncertainty of a merger is preferable to that of remaining a stand-alone carrier in a world of $120-a-barrel oil, one flight attendant said.[8] Airfares are on the rise as airlines keep a tighter rein on flights and seats -- and that rise could accelerate if industry merger efforts bear fruit.[27] Questions remain about the daunting challenges facing the new company. Given widespread industry tumult and a checkered airline merger history, what can a combined Delta-Northwest really achieve? BusinessWeek.com canvassed market analysts, branding experts, and innovation consultants to assess the potential headaches--and opportunities--the new company will face the day after its historic merger closes (assuming it's approved).[16]
"Labor is always a pain with mergers," said Raymond Neidl, an airline industry analyst with Calyon Securities in New York. "This isn't any different."[8]
We have no guarantee Delta wouldn't want to get rid of our union." Some experts have questioned the airlines' pledge to continue operating their seven domestic hubs -- in Atlanta, Salt Lake City, Memphis, Detroit, New York, Cincinnati and Minneapolis/St. Paul -- without needing to make job and service cutbacks.[8] CHANTILLY, Va.--( BUSINESS WIRE )--Compass Airlines (NYSE: NWA) announces that it has received a Foreign Air Carrier Permit from the Mexico civil aviation authority authorizing the airline to operate new nonstop flights from Detroit to Monterrey, Mexico. This is a major milestone in the regulatory approval process as the new flight schedule begins May 2, 2008.[25]
By 2009, if the price of jet fuel doesn't abate and airlines can't raise prices enough, even carriers with big bank accounts could start running short of cash and find it difficult to borrow. "There are going to be more airline failures in this environment, and they could be liquidations," says Delta Chief Financial Officer Edward Bastian.[6] For decades, executives have preached the benefits of keeping fleets as simple as possible," the Post says. The CEOs of Delta and NWA say that won't be the case at their airline.[19] Even as Delta and NWA make that argument, the Post points out that running an airline with many different types of planes has long been "one argument that runs counter to prevailing wisdom in the aviation industry.[19]
"We will be expanding on that." Achieving profitability won't involve calling on employees for more givebacks, Anderson said, noting labor at both companies had already given up major wage and benefit concessions while the two companies were in bankruptcy. "The industry is going to have to pass these costs through." Which will mean higher air fares, he said.[4] We will pursue all options to ensure a strong, sustainable future for our airline and will not shy away from the tough choices necessary to create value for our shareholders and benefit our employees and customers."[18]
Pulling out of a city also means shutting down ticket counters and gates, and laying off or moving employees. "Once you make those decisions to get rid of those things, you can't very easily or quickly bring them back," Emerson says. Such are the tough decisions airlines are making this year, while they still have billions of dollars in cash on hand.[6]
A few hours later, Eagan, Minn. -based Northwest Airlines Corp. reported a $4.1 billion loss for the period.[17] Based in Chantilly, Va., Compass Airlines is a wholly-owned subsidiary of Northwest Airlines Corporation (NYSE: NWA) and operates as a Northwest Airlink partner under service agreements with Northwest Airlines.[25] " A tremendous amount of work wentinto this by many people at Northwest and Compass, all of whom contributed to reaching this milestone successfully on a very compressed timeline ", said Jeff Morgan, Director, International and Regulatory Affairs, Northwest Airlines.[25] Northwest Airlines is one of the world ' s largest airlines with hubs at Detroit, Minneapolis/ St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures.[25]
'Over the longer run, we would expect that there will be additional international opportunities from Detroit over time,' Richard Anderson, Delta's chief executive, told a meeting of the Detroit Free Press editorial board. [23] Making the point succinctly during testimony last week, Delta's chief executive, Richard Anderson, said, "Oil is a game-changer."[16]
The Department of Transportation a week before the agreement tentatively approved transatlantic antitrust immunity for six SkyTeam alliance members and gave the nod to a four-way joint venture for Air France, Delta, KLM and Northwest. [18] Delta and Northwest executives said the expansion of Open Skies agreements, most notably between the United States and European Union, continue to increase competition from foreign players.[18] "Our top priority now is to work with our Delta colleagues to preserve our union representation and to negotiate a contract that combines the best from our Northwest contract and the best from the Delta policy manual, along with raises and other long-overdue improvements into a legally enforceable contract," said Kevin Griffin, head of Northwest's flight attendant union chapter, in a statement.[8]
According to Delta, the enhanced program will allow Delta and Northwest employees and their families to fly for free to more than 390 worldwide destinations in 67 countries.[10] Industry experts agree that Delta's employee relations are unique. "Delta's an interesting company in that it's been able to maintain a decidedly non-union culture while staying on relatively good terms with its employees," said Michael Boyd, president of The Boyd Group, an Evergreen, Colo. -based consulting firm. "Even through bankruptcy, management has succeeded in convincing employees that their best representative is themselves."[8]
Officials in the airline industry say the government -- not the airlines -- should pay for the new program.[19] United Airlines CEO Glenn Tilton, a long-time proponent of industry consolidation, in a statement following Continental's announcement said, "Our strategy is consistent.[18] Some industry observers remain skeptical, saying that combining widely varied fleet types is bound to be a costly proposition. "They will have higher operating costs, not lower operating costs," former American CEO Robert Crandall tells the Post.[19] "Some leisure travelers are going to be priced out" of flights, says Tom Parsons, CEO of the travel website BestFares.com. For many families, vacations by plane that have been within their financial reach could become an unaffordable luxury, Parsons and other travel specialists say. For entrepreneurs and small businesses, the increasing cost of travel could prohibit them from making faraway sales calls to grow their business.[6]
Mr. Steenland agreed and said without a consolidation, Eagan, Minn. -based Northwest's biggest challenge would be finding ways to offset fuel costs.[1] Travelers like this man waiting to board an NWA jet last month at Detroit Metropolitan are likely to see fewer flying options as airlines face rising fuel costs.[6]
Detroit Metro stands to become the second-largest hub for the combined airline, which will be called Delta.[23] Detroit Metro Airport can expect future growth under a combined Northwest-Delta, the top executives for the two airlines said today.[23]
Steenland said people flying in to the Detroit hub from Alpena, Lansing or other Michigan cities will have more destination choices as new routes are offered from Metro after the merger.[7] Anderson said Delta had little presence in small Michigan markets so service will not be lost due to the merger.[7] Delta spokeswoman Susan Elliott confirmed the conversation Schumer had with Anderson. She said Anderson has said all along that the merger "is one of addition and not subtraction. We've also said there'd be no hub closures as a result of this merger."[2]
Even before merger talk began, the Association of Flight Attendants got enough signatures on a petition requesting a unionization vote of 12,000 Delta flight attendants.[8]
More mergers are possible United and U.S. Airways are in talks in a trend that could reduce competition among carriers.[6] Southwest's CEO, meanwhile, indicated that the carrier wasn't interested in a merger.[17] Customer service: The CEOs vowed it would get better with the merger, even though the airline will be bigger.[7] The merger's impact on corporate travel programs will not be immediate, said Mitch Cwanger, American Express Advisory Services senior practice leader for air, said.[18] Crissey, like many analysts, expected a deal between United and Continental, but said Continental's decision "may improve DOJ approval odds" of the Delta-Northwest merger, since it may mean fewer air deals in the domestic marketplace.[18] The merits of the proposal seem to have made an impression on Congress, which must weigh the deal and whose members were mostly receptive during testimony last week, as well as on analysts, many of whom expect the merger to proceed.[16]
Union representatives were unconvinced and said the deal would sacrifice the rights of Northwest workers.[1] Northwest also said it distributed $125 million in profit-sharing and other incentive payouts to workers.[11] Steenland's exit package of $22.1 million is up from a previously disclosed package of $7.8 million. It includes a $3.3 million severance payment, $4.5 million in pension money Steenland has accrued during his time at Northwest, and $8 million worth of restricted stock that will vest when he leaves.[11]
The CEO would be entitled to $18.3 million, which includes $6.2 million in pension benefits and the value of restricted stock units outstanding, based on the.[15] The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation, which Steenland did not receive, and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in their proxy statements.[11]
From USA Today: "Airlines could spend up to $3.2 billion over 10 years to collect fingerprints from foreign travelers heading out of the country, according to a government proposal. The Homeland Security Department's proposed rules aim to assist government agents in tracking down visitors, including suspected terrorists, who stay in the USA after they are required to leave. [19] The increases on some routes are even higher. Consultant Richard Leck, founder of Bruin Consulting in Bedford, N.H., flies nearly every week from Boston or Manchester, N.H., through Chicago to San Francisco, where his client is based. Since last fall, his airfare has jumped from $800 round trip to $1,500. That's partly because United stopped service from Chicago to Oakland, which was cheaper to fly to than San Francisco International.[6] If ticket prices rise another 20%, as Anderson suggests is needed, that family would pay about $3,000.[6] Oil prices closed at $113.46 a barrel Wednesday after peaking at just under $120 Monday. Even if they were to drop an unlikely 30%, average prices would remain historically high. There's little chance they would fall much, because of the relentless demand from China, India and other fast-growing economies.[6]
JPMorgan's Baker likens the potential financial impact of soaring jet fuel prices to the economic blow airlines suffered after the Sept. 11, 2001, terrorist attacks.[6] Fuel prices have forced seven small U.S. carriers to shut down since Christmas.[6] "You can't underestimate the spike in fuel prices and how it is fundamentally changing the industry."[6]
Air Line Pilots Association: 4,500 mainline pilots Delta At Delta, it's a different story. Only its pilots and some dispatchers are unionized. [8] The enhanced travel program is an early step in the combination of Delta and Northwest that can be achieved in advance of completion of the regulatory review process.''[10] Any change to corporate agreements is at least 12 months away." Northwest on its Web site said the combined entity would "maintain its agreements with valued corporate partners of both airlines" while honoring "existing sales agreements, including fares, commissions and terms and conditions as established with our travel agencies and other major customers."[18]
For decades, "Air travel has been one of the incredible bargains for U.S. consumers," says Tom Horton, American Airlines' chief financial officer. [6] Every major U.S. carrier except Southwest Airlines (LUV) posted losses in the quarter.[6] Not only would Delta rank as the largest carrier in the U.S.' domestic market, it would be the top U.S. carrier providing service across the Pacific, to Europe, to Africa and the Middle East, and it would be the No. 2 U.S. carrier to Latin America and the Caribbean.[5]
"Two pilots suspected of falling asleep on a flight from Honolulu to Hilo in February were fired last week by the airline go! [19]
SOURCES
1. Airline Officials Face Questions Lawmakers Scrutinize Effects of Potential Deal - Business - redOrbit
2. Schumer to Delta CEO: Don't cut NY jobs - Atlanta Business Chronicle:
3. Covering the Hudson to the Catskills!
4. Delta, Northwest is natural fit, CEOs say
5. Home & Away Magazine - Delta, Northwest Continue Merger Talks
6. Rising costs reshaping air travel across the USA - USATODAY.com
7. Northwest-Delta CEOs: your frequent flier miles are safe | Freep.com | Detroit Free Press
8. Wary workers cloud Delta-Northwest merger
9. Delta, Northwest to offer employees reciprocal travel rights - Forbes.com
10. The FINANCIAL, News That Makes Money, Business News & Multimedia - Employees First to Benefit from Combined Delta, Northwest Network
11. Stock fall clips NWA chief's $27M payout for 2007
12. kare11.com :: KARE 11 TV - Stock fall clips NWA chief's $27M payout
13. NWA CEO Steenland made $7.7M in '07; will get $18M after merger - Memphis Business Journal:
14. Northwest CEO gets $18.3 mln if merger in'08-filing | Deals | Mergers & Acquisitions | Reuters
15. Free Preview - WSJ.com
16. Delta-Northwest: Unlikely to Fly
17. Delta, Northwest Lose Combined .5 Billion in Quarter - Business - redOrbit
18. Buyers See Downside Of Delta-NWA: Cite Less Competition, Service; Await More Deals
19. Delta CEO warns of 15-20 percent fare hike | delawareonline | The News Journal
20. Northwest hikes fares - Nashville Business Journal:
21. Reciprocal access for Delta, NWA workers
22. MPR: NWA CEO will receive $18.3 million in severance
23. Northwest-Delta merger means bigger, better Metro Airport, CEOs say | Freep.com | Detroit Free Press
24. US flyers will have to pay more
25. Compass Airlines Receives Regulatory Approval from Mexico Civil Aviation Authority to Operate Flights from Detroit to Monterrey, Mexico
26. WREG-TV Memphis - Delta, Northwest to offer employees reciprocal travel rights
27. Free Preview - WSJ.com
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