« United Airlines Is Given China Route | Main | Pacific Wings Vs. Mesa »

January 11, 2007

Will Delta Spurn US Airways for Northwest?

The WSJ is reporting that Delta has been in talks with Northwest Airlines about a potential merger.  Odd that Delta had been swearing that they wanted to remain independent while at the same time talking to Northwest.  I'd be interested if anyone can explain why they'd be interested in Northwest (still in bankruptcy) and not in US Airways (profitable).  Thoughts?

January 11, 2007 | Permalink: Will Delta Spurn US Airways for Northwest?


"I'd be interested if anyone can explain why they'd be interested in Northwest (still in bankruptcy) and not in US Airways (profitable)."

I'll embellish a theory I first heard from some Wall St. analysts.

Top Delta management has been working very hard for (relatively) little pay on the belief that they would get generous stock options when Delta emerged from bankruptcy. Tilton at United became a multi-millionaire this way.

If USAirways buys Delta, all that hard work will result in no stock options and no windfall for Delta management. Modest severance instead. Additionally, if Delta and Northwest combine, there's a good chance Delta management will get to run the show (instead of being "on the street" in a USAirways takeover).

The media hasn't really reported this angle. I feel a little bad for rank-and-file employees who have been all riled up to oppose a US Airways deal, but there interests are FAR different from Delta management. They should be as suspicious of their own leadership's motivations as they are of Doug Parker.

Meanwhile, the newspapers in Memphis and Cincinatti have realized that their hometowns would likely get screwed in a NW-DL deal. I think that's true, too. I also think many NW and DL employees would lose their jobs in such a deal due to these hub closures or cutbacks. Parker, on the other hand, has promised no layoffs, just some attrition through retirement and reduced hiring.

A very interesting aviation story. To be continued . . . .

: iahphx at Jan 12, 2007 9:37:22 AM

am delta employee and i know in fact our managemenet dont care about us..and for the first tine since almost 11 years i hate delta airline with passion though i am still employed there, but hey..who care as long as i am getting my paycheck every 2 weeks with the minimum effort just barley enough to get the job done.

: lina tahmass at Feb 3, 2007 8:23:22 AM

Post a comment

Recent Airline News Posts

View All Airline News Archives by Week