ATLANTA — Delta Air Lines may soon reach a merger agreement with Northwest that would form the world’s largest carrier, two people familiar with the talks said.
Delta and Northwest shared details of a proposed combination with each carrier’s Air Line Pilots Association chapter, the people said. Union leaders now will study how to mesh seniority lists, said the people, who asked not to be identified because the plan is still private. A merger announcement may come within weeks, one of the people said.
Labor support is vital to the deal, which would vault the combined carrier past American as the world’s biggest by traffic. A merger may help pilots recoup concessions made during the two airlines’ 2005-07 bankruptcies.
“The area where mergers have gone the most wrong has typically been in labor integration,” James Higgins, a Soleil Securities Corp. analyst in Solebury, Pa., said Monday.
It would be “hugely beneficial” to win union backing before announcing a tie-up, he said.
Delta is the third-biggest U.S. carrier by miles flown by paying passengers, while Northwest is No. 5. The airlines and their regional partners carried 176 million people last year.
Delta spokeswoman Betsy Talton and Tammy Lee of Eagan, Minn.-based Northwest said the airlines had no comment. Pilots-union leaders at the two companies didn’t immediately return calls seeking comment.
National leaders of the Air Line Pilots Association will meet Thursday in Washington, D.C., with their counterparts from the Association of Flight Attendants, International Association of Machinists and Transport Workers Union to discuss mergers and other industry issues.
“The other unions are a much trickier situation,” said John Budd, a professor of industrial relations at the University of Minnesota’s Carlson School of Management in Minneapolis. “They don’t share the same unions across the other employee groups. That just makes the situation incredibly complex.”
Pilots are Delta’s only major work group with a union. Flight attendants plan to file for a union election this week.
