Delta Airlines and Northwest Airlines have agreed to merge in a no-cash deal that trades stock only. The airline will be called Delta. The deal was reached early Monday evening and is worth $17.7 billion. The merger creates the world’s largest airline, for the moment, at least. News of the merger has sparked speculation that Continental and United will follow. In the Delta-Northwest deal, the airlines have agreed to keep all their hubs open and Delta pilots have been given a 3.5 percent stake. They’ve also agreed to keep their current contract through 2012.
A combined contract for pilots is in the works but, as is normal with mergers, seniority issues will be the tough part. The two airlines both hit all the main hubs in the U.S. and fly overseas but their route networks will offer destinations offer new destinations as a combination. Headquarters will remain in Atlanta but Northwest’s home base of Minneapolis will be retained as an executive office.
