Rethinking Delta: Northwest-Delta merger would expand their international reach

Delta Air Lines Inc., the third-largest U.S. carrier, is still reviewing options for the company that may include a merger, chief executive officer Richard Anderson told employees Friday.

"The board and our management team are fully committed to ensuring that this is a thorough process, so any decision made will be in the very best interest of all Delta stakeholders," Anderson said in a recorded message.

A board committee that formed in November to consider possibilities including mergers "continues to review all the options," he said. Delta is in talks with Northwest Airlines Corp. and UAL Corp.'s United Airlines, the Northwest pilots union said last week, citing confirmation from their company.

Analysts say a merger between Atlanta-based Delta and Minnesota-based Northwest would mean more international flights from Atlanta, a smaller role for the Memphis airport and a bigger one for airports in Detroit, Salt Lake City and possibly Minneapolis.

A Delta-Northwest merger would create the nation's largest airline — possibly the biggest in the world — and could have long-range consequences for many existing hubs, as well as routes controlled by the two carriers.

"It would truly, truly be 'the' U.S. global carrier," said Minnesota-based airline consultant Terry Trippler. "It would be No. 1 to Europe. It would be very close to No. 1 to Asia. And it would be very big in Latin America, Mexico and the Caribbean."

The merger would combine Delta's extensive domestic and Latin American route system with Northwest's vast presence in Asia. Northwest operates 200 nonstop flights a week between the United States and Asia, and those routes would be complemented by both carriers' operations in Europe.

Delta has hubs in Atlanta, Cincinnati, Salt Lake and New York's John F. Kennedy Airport. Northwest has hubs in Minneapolis, Detroit, Memphis, Tokyo and Amsterdam, Netherlands.

Delta Air Lines' executives said the airline has a strong stand-alone plan and will not go ahead with a merger unless it meets their goals to strengthen the carrier and create job security for both companies' employees.

Delta President Ed Bastian said in an interview Friday that the Atlanta airline has been working "several months" to prepare for a potential wave of mergers among the industry's biggest players. "The seeds of what we're doing here really were laid over the restructuring over the last couple of years," said Bastian.