Delta Air Lines replaces retiring executive

Delta Air Lines Inc. named board member Richard Anderson, the former chief executive officer at Northwest Airlines Corp., over two insiders to replace retiring CEO Gerald Grinstein.

Anderson, 52, an executive vice president at UnitedHealth Group Inc., said the third-largest U.S. carrier is working from a "position of strength" after leaving bankruptcy and isn't focused on mergers. Grinstein, 75, is leaving as planned after leading Delta's reorganization.

In hiring Anderson, directors rebuffed the Delta executives backed by Grinstein — finance chief Edward Bastian and operations chief James Whitehurst — and rekindled speculation about a future merger with Northwest or another carrier.

"This could spur the possibility of further consolidation in the industry," said Seth Tobias, general partner of Circle T Partners LP in New York, which holds more than 100,000 Delta shares.

Anderson said he had no plans for a merger with Northwest. "Over the long run the industry will likely have some consolidation, but that's not what our focus is," he told reporters on a conference call. Delta said in February it had considered a "business combination" with Northwest.

Anderson's selection is the first major decision by the new Delta board that was named in March. Grinstein steered Delta through 19 months in court protection and fended off a hostile takeover bid from US Airways Group Inc.

Hiring Anderson preserves Delta's "bench strength," Grinstein said in a letter today to employees. "Richard, Ed and the rest of Delta's highly capable management team will maintain the continuity and momentum Delta stakeholders need."

Bastian will remain as chief financial officer and add the title of president, Delta said today. The announcement didn't mention Whitehurst, who had led the airline's focus on improved customer service. Anderson's appointment is effective Sept. 1.

Delta left court supervision on April 30 after cutting annual costs by $3 billion, shedding 6,000 jobs and shifting more flying to international routes to avoid competition with low-cost domestic carriers. Northwest followed Delta out of bankruptcy a month later.

Choosing Anderson is a win for Delta, said Michael Boyd, a consultant at the Boyd Group in Evergreen, Colorado. "Northwest was probably a tougher nut than Delta because Northwest is highly unionized, and he did a great job there."

Anderson joined Northwest in 1990 as deputy general counsel from Continental Airlines Inc. He was promoted through various jobs until being named Northwest's CEO in February 2001, a job he held until October 2004.

"There's no doubt that he is really highly regarded" in the airline industry, said Jon Ash, president of Washington-based consulting firm InterVistas-GA2.

Anderson had no health-care background before joining UnitedHealth, which said it was attracted by his use of technology to save money at Northwest.