Delta and NWA merger will create worlds biggest airline
26 / 07 / 2012
US legacy carriers Delta Air Lines and Northwest Airlines have agreed to merge, creating the largest commercial airline in the world worth around US$17.7 billion and with almost 800 aircraft and some 75,000 employees worldwide.
Technically, Delta (third biggest US airline) will buy Northwest (fifth biggest) in a deal worth around US$3 billion, with Northwest shareholders receiving 1.25 Delta shares for each of their Northwest shares. The new airline will adopt the Delta name and will be based at Atlanta, Georgia.
Richard Anderson, the Delta chief executive officer who will head the new company, said: “We said we would only enter into a consolidation transaction if it was right for all of our constituencies; Delta and Northwest are a perfect fit. Today, we’re announcing a transaction that is about addition, not subtraction, and combines end-to-end networks that open a world of opportunities for our customers and employees. We believe by partnering with our employees, including providing equity to US-based employees of Delta and Northwest, this combination is off to the right start.”
The deal, however, will need approval by US anti-trust authorities and could yet fall apart if opposition from unions and members of congress are not overcome.
The merger could lead to other major consolidations within the US airline industry. United and Continental are said to be in talks over a merger, with American Airlines also reported to have discussions with Continental. Should either of these deals happen, the resulting airline would overtake a combined Delta/NWA as the world’s largest.