ATLANTA A merger deal between Delta Air Lines and Northwest Airlines is on hold while their pilot unions try to hammer out how to combine workers and how much to demand from the companies, according to industry experts and people who have been briefed on the discussions.
The move is aimed at smoothing the integration of Delta and Northwest, but some experts said pilots may drag out negotiations or demand too much, potentially scuttling the deal.
"It ain't going to be easy, and it could be a deal-buster" if the unions can't agree or seek too large a pay-off from going along with the merger plans, said Vaughn Cordle, chief analyst at consulting firm at Airline Forecasts.
The airlines asked the two units of the Air Line Pilots Association to hold negotiations parallel to merger talks by airline management.
The pilots may push for more than $1 billion in incentives, including stock in the combined airlines, pay raises, and other contract improvements, Cordle said. "That may kill the deal."
The pilot groups' other aim: To determine how they will merge their seniority lists and compromise on other work rules, the people briefed on the discussions said.
Such a pilot agreement could allow the carriers to announce a merger pact either late this week or sometime next week, these people said. Company management gave the unions until mid-week to reach a deal, but it's a deadline that could easily slip into next week, according to one person.
The people briefed on the discussions said they believe union leaders are motivated to clear a path for the planned merger. The airlines have offered pilots an equity stake in the contemplated merger. The unions also hope a merger will reverse some of the pay cuts and other concessions they made to Delta and Northwest as they headed into twin bankruptcy restructurings.
Meanwhile, Delta and Northwest have largely resolved other issues related to a planned stock-swap merger, including decisions on who will run the combined companies, according to the people briefed on the discussions.
Delta Chief Executive Richard Anderson is expected to remain at the controls, while Northwest CEO Doug Steenland will give up a direct management role and remain of the board of directors, according to one person.