News Delta-Northwest tie-up takes shape

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Delta-Northwest tie-up takes shape

A preliminary agreement is now in place for a long-awaited merger that will create America's largest carrier.

A preliminary agreement is now in place for a long-awaited merger that will create America’s largest carrier.

Delta and Northwest Airlines have signed a merger agreement that will see their collective value placed at $17.7 billion (£8.98 billion), after Northwest was valued at $3.6 billion and terms were agreed for combining their services.

Trade union and shareholder approval is still pending for a deal that would help the newly formed group eclipse American Airlines as the country’s largest carrier, but the biggest challenge may come in the form of antitrust regulators.

Set for headquartering in Atlanta and intended to operate under the Delta brand, the lack of overlap of the pair’s existing services – Delta’s strongest routes are in the eastern United States, Latin America and Europe while Northwest’s are Midwest and Asia-based – could save the deal from the antitrust clutches.

The airlines jointly stated: "The merger creates a stronger, more resilient airline positioned to thrive in the increasingly competitive global marketplace. The combination of Delta and Northwest is a merger based on addition, not subtraction, and it will open a world of opportunities for customers and employees."

More effective aircraft utilisation is an intended upshot of the merger, while a more comprehensive and diversified route system is a hoped-for result of consolidating the extensive services of both airlines.

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