NWA-Delta merger


Delta execs meeting with NWA pilots

Thursday, June 5th, 2008

Pilots union leaders at Northwest Airlines are getting a visit today from two top Delta execs, including President Ed Bastian. The NWA pilots unhappy with the separate treatment they’re getting in the NWA-merger. It’s a closed meeting, so no telling what could result from it — or how soon we’ll know.

The results are in: Union falls short

Wednesday, May 28th, 2008

The votes are in, and the Delta flight attendants have decided not to unionize — at least not yet.

The Association of Flight Attendants said that about 40 percent of Delta’s flight attendants voted to join — short of the 50 percent required. (A non-vote counts the same as a “no” vote.)

That sets up a separate election after the merger with Northwest to determine whether the merged airline’s flight attendants will be unionized or not. In a just-released statement, the AFA says the 40 percent support from Delta attendants will be enough to put them over the top:

“Those supporters, combined with strong nion support at Northwest, will clearly be enough for the flight attendants to win union representation after the merger with Northwest is finalized,” said Patricia Friend, the AFA’s international president.

Today: Delta union vote results

Wednesday, May 28th, 2008

Later today we’ll find out the results of Delta flight attendants’ union vote. They’ve been nonunion for decades, but the Association of Flight Attendants, which also represents Northwest flight attendants, has been pushing hard to bring them into the fold.

The pending Northwest merger, of course, puts a big wrinkle into the outcome of the election. Here’s what would happen, depending on which way the vote goes:

If they vote to join: The union could either negotiate a separate contract for the Delta attendants, or a joint contract covering both Delta and Northwest attendants.

If they vote not to join: Then it gets tricky. After the merger takes effect, a second vote would likely be held among all Delta and Northwest flight attendants on whether to accept or reject union representation. If the Delta attendants’ rejection in the first vote is close, then the Northwest vote in the second vote would likely put the union over the top. But if the first, Delta-only vote is a landslide against the union, things could get interesting.

Voting ends today at 1 p.m. Central time. Results are expected shortly afterward.

Delta pilots OK contract changes

Wednesday, May 14th, 2008

This is hardly a surprise, but Delta’s pilots have ratified a new contract agreement that gives them a 3.5 percent equity stake in the merged Delta-Northwest.

According to a letter from Delta pilot leader Lee Moak, 78 percent of Delta pilots who voted approved the changes, which would take effect when the merger goes into effect. Northwest pilots will remain under their old contract unless they can work out a joint contract — but a dispute between the two pilot groups over seniority has stood in the way of that.

It’s worth noting what Moak had to say about arbitrating that seniority dispute:

While ALPA merger policy can result in arbitration, we believe that turning over the fate of our seniority list to an arbitrator and the timeline to a policy manual is an abdication of leadership and that the best solution involves pilots negotiating with pilots to achieve a fair and equitable list.

Today: It’s Oberstar’s turn

Wednesday, May 14th, 2008

At first glance, today’s hearing before a panel of the House Transportation Committee looks like another in a never-ending series of congressional hearings (four and counting) on the NWA-Delta merger. But some fireworks could be in store.

On the panel will be the committee’s chairman, Rep. Jim Oberstar of Minnesota, who has been vocal in his opposition to the merger. He can’t stop it, but he can try to drag out the process as long as possible, a strategy his aides have called “running out the clock.”

The fun gets underway at 1 p.m. Twin Cities time.  First up are Northwest CEO Doug Steenland and Delta CEO Richard Anderson; testifying later in the day are Dave Stevens and Lee Moak, the leaders of the Northwest and Delta pilots unions.

If you want to tune in, the committee’s website offers a webcast.

Pretty please with sugar on top?

Monday, May 5th, 2008

1nwa0501.jpgToday’s award for Least Surprising News Story goes to the Minnesota Legislature’s hearing with testimony from Delta President Ed Bastian (left). Asked by House Commerce Committee Chairman Joe Atkins if the new Delta-Northwest is really and truly going to put its headquarters in Atlanta, no matter what tax breaks/loan guarantees/other incentives the state of Minnesota offered to put it in the Twin Cities, Bastian said: Yep.

Pressed by legislators about how many jobs Minnesota stands to lose from this deal, Bastian said: We dunno yet.

We sympathize with our elected officials’ need to do something, in a fly-the-flag kind of way. But this hearing painfully highlights the fact that there’s only one governmental body that really has any say over this deal, and that’s the U.S. Department of Justice. We’ll hear from them later this year.

One quote in particular was a stark reminder of how little leverage the state has. It was when Bastian was reminded that the state could force immediate repayment of the bonds if Northwest’s HQ is taken out of state. Bastian’s reply, according to the AP:

“If we are required to pay it off, we will pay it off. … I don’t know if that’s in anyone’s best interests at this point.”

Translation: Go ahead. Make my day. And then we’ll show you what job cuts really feel like.

Being acquired has its benefits

Tuesday, April 29th, 2008

Hey, Northwest employees: Feeling blue as you watch the red tail fly off into the sunset? Well, cheer up: You won’t have to wait for Justice Department approval to enjoy some of the fruits of the Northwest-Delta merger.

Starting one week from today, Northwest employees and the families can fly for free on Delta flights (and vice versa), even though the merger won’t take effect until late this year.

And don’t forget (according to the Northwest-Delta press release):

The addition of enhanced travel privileges is part of previously announced merger-related commitments to Delta and Northwest employees, including:

– A significant equity stake for U.S.-based employees of both companies upon closing of the transaction (international employees will receive a cash payment in lieu of equity);
– Pay increases that will continue the progression toward industry-standard pay;
– No involuntary furloughs of frontline employees as a result of the merger;
– Seniority protection through a fair and equitable seniority integration process; and
– The protection of the existing pension plans for both companies’ employees.

Did we mention that oil was down $3 a barrel today? Yes, things are looking up! At least until tomorrow.

Doug and Richard go to Washington

Thursday, April 24th, 2008

NWA’s Doug Steenland (left) and Delta’s Richard Anderson appeared before the House Judiciary Committee this morning to defend their merger. Then they head over to the Senate for another hearing, getting under way about now.

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The news take-away so far: Anderson said less than 1,000 jobs are likely to be cut as a direct result of the merger, mostly from the airlines’ headquarters in Eagan and Atlanta. (Guess which one will take most of the cuts?)

These aren’t the last of the hearings. Jim Oberstar’s House Transportation Committee and Amy Klobuchar’s Senate Commerce Committee will get their chances next month.

Taking a pounding on Wall Street

Tuesday, April 22nd, 2008

Delta CEO Richard Anderson put a scare into the stock market today when he said domestic airlines would need to raise fares 15 to 20 percent just to break even in today’s high-fuel-cost environment.

Mix in the fact that oil prices rose near the $120 mark, and a $537 million quarterly loss at United Airlines, and airline stocks took a beating across the board.  As of this writing, Delta shares were down about 12 percent on the day, and Northwest’s shares — which are tied to Delta’s because of the stock-swap nature of their deal — sank 13 percent.

Northwest shares are now down a total of 29 percent since the Delta deal was announced April 14.

Anderson and Northwest CEO Doug Steenland are in Washington today to talk with lawmakers in advance of Thursday’s congressional hearings about the proposed Delta-Northwest merger.

Buh-bye, Pepsi

Monday, April 21st, 2008

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Northwest Airlines has served Pepsi on its airlines for many years. Delta serves Coke. Since the Coca-Cola Co. is based in Delta’s hometown of Atlanta, it stands to reason that the soft-drink contract was not something that was going to be up for negotiation.

A Q&A with Delta’s top brass, published Sunday by the Atlanta Journal-Constitution, confirms it:

Q: Delta serves Coca-Cola; Northwest serves Pepsi. Will it be Coke or Pepsi on the new Delta?

[Delta CFO Ed] Bastian: It’ll be Coke. That’s not a hard one.

Not sure who exactly who the vendor is on Northwest’s Pepsi contract, but Minnesota’s own PepsiAmericas Inc., led by Robert Pohlad, is the second-largest Pepsi bottler.

UPDATE 4/22 1:12 PM: PepsiAmericas said today that they do not hold the Northwest Airlines contract.