Northwest pushing merger

Delta Air Lines Inc. is considering a proposal from Northwest Airlines Corp. to push ahead on a merger, even without a labor agreement between their pilot unions, people familiar with the matter said Friday.

The new approach may include a smaller pay package for pilots, said the people, who declined to be identified because the talks are private. The carriers must reassess how their tie-up would work, because soaring jet-fuel costs and lower domestic demand have wiped out projected profits, the people said.

Sidestepping the pilots would let Delta, the third-largest U.S. carrier, and No. 5 Northwest resume talks that stalled this month when union leaders failed to mesh their seniority lists. Delta Chief Executive Officer Richard Anderson has said he won't do a merger unless worker seniority is protected.

"Management has the responsibility to their workforce to provide a company that's going to thrive," said David Swierenga, president of consulting firm AeroEcon in Round Rock, Texas. "Management's responsibility is also to provide for their shareholders."

A Delta-Northwest tie-up would create the world's largest carrier by passenger traffic, vaulting past AMR Corp.'s American Airlines.

Tammy Lee, a spokeswoman for Northwest, based in Eagan, Minn., declined to comment on any merger talks. Atlanta-based Delta continues to "support industry consolidation," spokeswoman Betsy Talton said Friday.

Talton said Anderson and Chief Financial Officer Edward Bastian canceled their trips on inaugural flights to London and Shanghai this weekend. She wouldn't say when or why their schedules changed.

Delta pilot spokeswoman Kelly Regus said she had no comment on the airlines' discussions, while Northwest pilot leader Dave Stevens said pilots from both airlines must be involved in merger planning and support a tie-up for it to succeed.

"Any merger must be in the best interest of our customers and the employees, not just the shareholders," Stevens said in an e-mailed statement. "We will reserve our judgment and support until the economic and contractual elements of the agreement have been negotiated."

Before the pilot leaders reached an impasse over seniority at a merged airline, Delta and Northwest had agreed on most terms for a tie-up, including keeping Delta's name and Atlanta headquarters, and having Anderson run the new carrier, people briefed on the talks have said.