Delta-Northwest merger gets DOJ nod

The US Department of Justice has cleared the way for Atlanta's Delta Airlines and Minneapolis-based Northwest Airlines to merge. The Department's anti-trust division spent the last six months trying to determine if the merger would give the new airline an unfair advantage in the industry. The new airline will keep the Delta name and its Atlanta headquarters. In a statement, the division said the merger is likely to produce "substantial and credible efficiencies" that will benefit consumers nationwide and is "not likely to substantially lessen competition."

Delta flight attendants not unionizing

Delta flight attendants' election to unionize wrapped up today, but not enough of them voted to form a union. Only forty percent of them cast ballots, so the election is void.

But spokesperson from the Association of Flight Attendants Corey Calwell says that this may not be the end of the issue. Her organization represents Northwest's flight attendants.

Calwell says, "We believe voter participation will increase as Delta and Northwest get down the merger path."

After the merger, she says, new elections will be held.

Business news for Thursday, May 1, 2008

Home Depot to close some locations ...

Atlanta-based Home Depot has announced it will close more than a dozen stores nationwide. Citing poor performance, the home improvement giant will close 15 locations, including 3 in Wisconsin and 2 each in Ohio, New Jersey and Indiana. A spokesman for Home Depot says some of the 1,300 employees affected will be relocated, while others could lose their jobs. This marks the first time the home improvement retailer has ever closed a flagship store for performance reasons. Home depot is the world's largest home improvement store chain, with more than 2,200 stores in the United States, Canada, Mexico and China. The closures - slated to take place within the next two months -- represent less than 1 percent of Home Depot’s existing stores. And, although new store capital spending will be reduced by $1 billion over the next three years, Home Depot says it will go forward with plans to open 55 new stores in the 2009 fiscal year.

Delta pilots begin voting today on benefits package ...

Delta pilots begin voting today on whether or not to approve changes to their benefits package that would include among other things … pay raises. If approved by the union, in addition to a pay hike, Delta pilots could see an expanded stake in the combined airline as merger talks with Minneaspolis-based NorthWest continue. Delta has agreed to extend its existing collective bargaining agreement with the pilots union through the end of 2012. The revised contract provides the 74-hundred Delta pilots a 3.5 percent equity stake in the new company. The agreement becomes void unless a majority of rank-and-file Delta pilots who vote approve it. It does not cover Northwest's 5,000 pilots, who have their own separate bargaining unit. Pilots for NorthWest have repeatedly refused to sign on to any agreement which could cost them seniority in the new airlines. Voting for Delta pilots runs through May 14th.

Delta officials face hometown crowd

Delta officials faced the home town crowd in Atlanta today, one day after it was announced that Delta would merge with Minneapolis-based Northwest Airlines. Like any high profile marriage, a lot of people will be watching the union of Delta and Northwest. Including passengers concerned about quality and service. And, employees worried about their jobs. Although Delta officials have already said no to any immediate personnel cuts.

But, the toughest challenge the new company faces will be from the Federal Trade Commission. However, Delta CEO Richard Anderson remains confident of the outcome. "There's far more contestability with Southwest, AirTran. And, there's free entry into these markets. From contestability and a competition standpoint, these transactions should be approved by the regulators." Delta officials say they hope to have the deal wrapped up before the end of the year. Before the pro-business White House changes hands.

Click here for more GPB news coverage of the Delta-Northwest merger.

Obstacles to Delta merger

A day after Atlanta-based Delta Air Lines announced merger plans with Northwest Air Lines, obstacles stand in the way. Two of Minneapolis-based Northwest's largest unions immediately declared their opposition to a combination. Most importantly, the airlines would need anti-trust approval from federal regulators. Still, executives at Delta and Northwest say they are aiming to close their deal by the end of this year.

Click here for more GPB news coverage of the Delta-Northwest merger.

Delta, Northwest announce merger

Atlanta-based Delta Air Lines announced Monday that it will acquire Minneapolis-based Northwest Airlines in a deal that will create the world's largest airline. The combined company will retain the Delta name and be headquartered in Atlanta.

In a statement on its website, Delta says the airline will maintain its nine existing hubs in the United States, Europe and Asia. The deal is expected to result in a number of administrative job losses, but few are expected among frontline employees such as flight attendants, pilots or mechanics. 

Consumers could see higher fares with reduced competition on some routes. However, relatively little overlap exists between the current Northwest and Delta route systems. 

Frequent fliers can expect to retain their earned mileage points since both airlines' reward programs are already integrated through the SkyTeam network. 

Delta CEO Richard Anderson cited record oil prices, a weakening economy and increasingly competitive marketplace as reasons for the move. He expects the new airline will achieve greater financial stability and job security for its employees.

Anderson will remain CEO of the new, combined airline. Northwest CEO Doug Steenland will take a position on the airline's board of directors. 

Click here for more GPB news coverage of the Delta-Northwest merger.