Delta Air Lines said on Monday its creditors agreed to allow the carrier to give retired pilots an additional USD$719 million in pre-petition claims to help them recoup lost pension benefits.

The announcement comes as Delta faces an unsolicited USD$8.7 billion takeover bid by US Airways.

In total, retired Delta pilots will now have a total of about USD$800 million in allowed claims, the airline said in a statement. The agreement with Delta's official committee of unsecured creditors is subject to bankruptcy court approval.

Delta, which has been operating under bankruptcy protection since September 2005, expects to end its pilots' defined benefit pension plan effective September 2, 2006.

The unsecured claim, which could take the form of equity or some other kind of security in a reorganized airline, would help the retirees recoup some of the loss, the airline said.

"Our retired pilots will recover through the claim process a significant portion of their unpaid non-qualified benefits," Delta Chief Financial Officer Edward Bastian said in a statement.

(Reuters)

Delta to buy up to 60 new mini-jets

By RUSSELL GRANTHAM
The Atlanta Journal-Constitution

Published on: 01/04/07

Delta Air Lines plans to buy 30 new regional jets from Bombardier Inc. and has asked for purchase options on 30 more of the 76-seat planes, according to a court filing Thursday.

The Atlanta airline is also seeking its bankruptcy judge's clearance to get secured financing for the deal and to pay pre-delivery costs.

The court filing, part of Delta's nearly 16-month-old bankruptcy restructuring, did not disclose financial terms for the deal.

The orders are for Bombardiar's CRJ 900s, a larger version of the 50- and 70-seat jets that make up the bulk of Delta's regional jet fleet. Delta has long been expected to order bigger regional jets to feed its hub airports, in part because the smaller aircraft are less popular with customers when used on longer flights.

In a contract deal last April, Delta's pilots union agreed to work rule changes that allowed the carrier to begin adding up to 30 of the 76-seat jets to its fleet this year.

Regional jets are operated as "Delta Connection" flights by Delta subsidiary Comair or by its other regional affiliates, while Delta uses larger jets for its own mainline operations.

http://www.ajc.com/business/content/business/stories/2007/01/04/0104bizdeltajets.html

December 29, 2006
Delta Air Lines said on Friday it narrowed its loss in November to USD$49 million, keeping it on track to exit bankruptcy as a stand-alone company in the spring.

The USD$49 million loss compares with a November 2005 loss of USD$181 million.

"These results... further underscore our confidence to emerge from bankruptcy as a strong, stand-alone company in the spring of 2007," said Chief Financial Officer Edward Bastian in a statement.

Delta reduced operating costs by 8.1 percent in November as it cut seats available for sale by 6.5 percent. Passenger unit revenues rose 13.2 percent in November.

Delta last week rebuffed an USD$8.3 billion takeover offer from US Airways and said its own reorganization plan values the company at USD$9.4 billion to USD$12 billion.

US Airways Chief Executive Doug Parker said on Thursday that it was sticking to its bid for Delta and had no immediate plans to raise it or abandon its efforts.

As of November 30, Delta said it had USD$2.7 billion in unrestricted cash, cash equivalents and short-term investments.

(Reuters)

December 29, 2006
US Airways has no immediate plans to boost or back off from its offer to buy Delta Air Lines, despite the bankrupt carrier's resistance, US Airways' chief executive said on Thursday.

"We believe our offer is more than fair and don't feel any need to amend it at this point," Doug Parker said in comments to the Associated Press. "We think this is such a unique opportunity that we have an obligation to pursue it and because of that obligation we will pursue it."

Company spokesman Phil Gee confirmed the comments.

In November, US Airways offered to buy Delta for USD$4 billion in cash and 78.5 million shares.

Last week, Delta rejected the bid and presented a stand-alone plan that it says values it at between USD$9.4 billion and USD$12 billion, topping US Airways' USD$8.3 billion offer.

US Airways is pressed for time to win support from Delta's creditors before Delta exits bankruptcy. US Airways needs creditors to push Delta into opening up its books so that it can perform due diligence, a condition of its offer.

Delta plans to have a hearing on February 7 to begin seeking approval from creditors to exit bankruptcy as an independent carrier.

At the hearing, Delta's creditors are expected to vote on the carrier's disclosure statement, which details its restructuring proposal. If the statement is approved, the company's creditors will proceed to vote on the restructuring proposal. The process could take several weeks.

(Reuters)

December 28, 2006
Delta Air Lines set a February 7 hearing to begin seeking approval from creditors to exit bankruptcy as a stand-alone carrier, according to a court document.

Delta, which earlier this month rejected an USD$8.3 billion takeover bid from rival US Airways and presented its stand-alone plan, intends to hold a hearing to approve its disclosure statement, which details its restructuring plan.

Atlanta-based Delta has said it would be worth more as an independent carrier than the cash-and-stock offer from US Airways. But the airline needs its creditors to vote in favor of the plan to be successful.

The hearing on the disclosure statement generally provides a forum for creditors to raise objections and gives an indication of the type of resistance the plan may face.

If the disclosure statement is approved, the company could solicit votes from creditors that held claims as of February 1.

The voting process typically takes four to eight weeks, with results of the voting possible by April, Delta spokesman Michael Freitag said.

(Reuters)

Delta chief tells senator no merger deal yet
Tue Feb 19, 2008 6:59pm EST
By John Crawley

WASHINGTON (Reuters) - The chief executive of Delta Air Lines told a U.S. senator on Tuesday there is no merger agreement yet with Northwest Airlines, but the two sides are continuing to work toward a deal.

Sen. Amy Klobuchar, a Minnesota Democrat, told Reuters in an interview that she spoke with Richard Anderson earlier in the day and he told her the airlines continue to work with their pilots on getting union support for consolidation.

Klobuchar said the Delta CEO did not have a specific time frame for any agreement or any guarantee from Anderson that a deal would be reached, but one source briefed on the matter told Reuters earlier that an announcement was possible within the next day or two.

The full article is at reuters.
http://www.reuters.com/article/ousiv/idUSN1929212920080220

By JIM THARPE, RACHEL TOBIN RAMOS
The Atlanta Journal-Constitution

Published on: 02/20/08

Pilots for Delta and Northwest airlines are counting on a big payday as the companies make their final approach in a proposed merger to create the world's largest carrier.

The boards of both airlines could meet as early as Wednesday to formally consider the deal, which would create a globe-spanning airline headquartered in Atlanta with unparalleled access to routes in the United States, Europe, South America, Africa and Asia.

An announcement is widely anticipated Wednesday or Thursday, setting the stage for consideration by the U.S. Department of Justice, which would have to approve the deal. A Delta-Northwest combination could spark further consolidation in the financially strapped airline industry, which on Tuesday saw oil top the $100-a-barrel mark.

"It will be one hell of an airline," said Minneapolis-based airline consultant Terry Trippler.

The deal still could fall apart, or it could be shot down by the companies' boards. The 11,000 pilots for the two airlines are key to the final deal. The airlines want to ensure their support before moving ahead with a deal to avoid pitfalls of past industry mergers.

US Airways and AmericaWest did not get pre-merger agreements from their pilots before they combined in 2005. Today, those pilots still are working under separate seniority lists and contracts, weighing down full integration of the companies' operations.

There were indications Tuesday that Delta and Northwest pilots stand to profit handsomely for their cooperation in a merger plan.

A longtime Delta pilot briefed on the talks said the plan created by union negotiators would give each pilot a $50,000 to $100,000 stake in the new company, but only if pilot unions for both airlines ratify the agreement.

That would amount to up to $1 billion, or 5 percent to 7 percent of the value of the new company, which would be paid out either in cash or stock.

That is a huge incentive, the pilot said, especially after taking pay cuts during Delta's bankruptcy. The carrier emerged from Chapter 11 protection last spring.

"The pilots wanted to use their cooperation and influence to recuperate lost wages and benefits in the bankruptcy," the Delta pilot said.

Salaries for the Northwest pilots would rise 10 percent to 15 percent to bring them up to par with Delta pilots.

Meanwhile, Delta pilots would get concessions on seniority, the pilot said. Seniority determines which planes pilots qualify to fly and, therefore, their pay rate.

Delta pilots flying the airline's biggest jets have fewer years on the job, on average, than their counterparts at Northwest. They have feared Northwest pilots with more years in the air could bump them out of these coveted cockpits.

But under the agreement reached by union negotiators, a Delta pilot hired in 1988 might have the same seniority as a Northwest pilot hired in 1985, the pilot said. Delta pilots also could get a very modest hourly pay raise in the deal, the pilot said.

Both groups want to take advantage of the global reach of their combined airline and look good compared with their competition, the pilot said.

He said US Airways and America West pilots still are "fighting with hatred" over their placement on the seniority list.

The next step for the pilots unions is for their elected officials to agree to the terms reached by the negotiators. If union officials like the deal, they would send it to their pilot membership for a vote.

The vote to ratify that agreement probably would come after a merger is announced.
www.ap.org

By HARRY R. WEBER

AP Business Writer

5:10 PM CST, February 20, 2008

ATLANTA

Northwest Airlines Corp. pilots have integration issues to sort out. Not just the ones with their counterparts at Delta Air Lines Inc. that threaten to scuttle talks to combine the two carriers. The ones with Republic Airlines. From 1986.

An arbitrator is still sorting out seniority questions from that deal, illustrating just how much the point matters. Employees at the top of the list get first choice on vacations, the best routes and the bigger planes that they get paid more for flying.

The boards of Delta and Northwest had been expected to vote Wednesday on a combination projected to be worth $20 billion if a pilot deal was in place. It was not clear if the boards met, though a person familiar with the negotiations said a merger deal would not be announced Thursday as had been hoped. That person said a deal now could be announced at the beginning of next week, presuming everything falls into place by then.

Delta and Northwest don't need a labor agreement between the pilots unions before announcing a combination, but having one in place could help speed up the integration of the companies down the line.

Full Story link...

http://www.chicagotribune.com/business/sns-ap-delta-northwest,0,194596.story

Wed Feb 27, 2008 10:55am EST

NEW YORK (Reuters) - The shares in Delta Air Lines Inc (DAL.N: Quote, Profile, Research) and Northwest Airlines Corp (NWA.N: Quote, Profile, Research) both plunged more than 6 percent on Wednesday, as the likelihood of a speedy merger dimmed.

Delta Chief Executive Richard Anderson sent a memo to employees late Tuesday that cooled expectations that a deal was around the corner.

"To date, we have not arrived at a potential transaction that meets all of our principles. Rest assured that we will not complete a transaction unless all of these conditions are met," Anderson said. "We have a strong stand-alone plan." (See nN26377869)

Delta and Northwest were reportedly close to a deal, but pilots have been unable to agree on integrating their seniority lists. It's unclear whether those talks would be restarted.

Wall Street was pessimistic.

"What investors forgot was that the interests of airline managements and unions have always been diametrically opposed to theirs," Roger King, an analyst with CreditSights, said in a note.

Delta shares fell $1.10 to $14.81, while Northwest dropped $1.11 to $14.90 in morning trade on the New York Stock Exchange.

Shares in United Airlines parent UAL Corp (UAUA.O: Quote, Profile, Research) and Continental Airlines Inc (CAL.N: Quote, Profile, Research), who were expected to merge if Delta and Northwest did, also fell.

UAL was down 3.6 percent at $33.69 on Nasdaq, while Continental slipped 3.4 percent to $28.07 on the NYSE.

(Reporting by Chris Reiter; editing by Jeffrey Benkoe)

Peripherally I am an interested party in what is happening on your side of the ocean. I fly for Air France/KLM. The blue side. Not stating anything new, but KLM has had a long successful anti-trust agreement with Northwest, and the close cooperation between Air France and Delta Airlines, combined with our combined cooperation within Skyteam makes the negotiations that are on-going between Delta and Northwest as logical.

A few years back I mentioned this in another thread, as likely to happen. It sounds like the evil issue of seniority is one of the big stumbling blocks (certainly not the only one) standing in the way of this consolidation. I realize the Anglo/Saxon model of management is different than the more pragmatic approach in mainland Europe. The horrendous things that have happened to airline employees in the USA since 2001 would not be possible in my country. Also the rape and pillage of the pension funds, and the exorbitant bonuses that are common for failure within management is something that is not common. I am sure if a deal happens the new Delta/Northwest wants to get the most out of the deal from day one, deleting any duplication, and canning thousands of employees. I would like to relay a little bit of the experience at KLM since our take-over by Air France four years ago.

The flight operations between KLM and Air France are strictly separate. Our pilot unions, have from the beginning, negotiated a production agreement between the two airlines where a certain date is seen as the reference point as to what each airline was contributing, and to attempt keep this ratio as we grow (or in the future if it needs to happen, contract). That ratio is roughly 66% (Air France) and 34% (KLM). We have three seniority lists. One for each airline, and a new list that was started at the same time as the reference point. This list contains only pilots hired by both companies after the reference date (and is called the third list, and is strictly date of hire). No KLM or Air France pilot can bid into the other company, so your position on your company list determines your career path, and the production split guarantees proportional opportunities for both pilot groups.

In the last four years many support departments have been integrated, but because of growth no one has been fired. The fact that we now single source many things, from fuel to fleet, and catering and handling has led to a bigger saving than management initially envisioned. This has obviously been noticed by other managements as a way to squeeze more out of the assets deployed.

I would like to know from any Delta or Northwest pilots; what is being communicated to them as to the likely merger model that is being looked at? I have in the past listened with great amazement as one of my Northwest colleagues who I met on a layover explained a bit on how the pilot merger between Northwest and Republic Airlines was constructed (sounded like the tax code is simpler). But I was wondering if the model employed by Air France / KLM is something that could offer some assistance? I know both pilot committees at Delta and Northwest know the phone number of the Dutch pilot union.

Wishing all concerned the best.
Greetings O.

http://www.freep.com/apps/pbcs.dll/article?AID=/20080228/BUSINESS07/802280454/1020/BUSINESS07
http://www.aero-news.net/index.cfm?ContentBlockID=ac0c76d8-0bf4-4441-84e9-14da45e49428
NEW
http://www.centredaily.com/business/story/436121.html
:ugh:

Thanks for the links, as I stated in my previous post, during the Air France take-over of KLM there were fences built in to make the employees more comfortable with the deal. The most important one from the pilot perspective is that the two flight operations are separate. An agreement about production and the split gives both groups the same opportunities as before the merger. Of course in the future things might change, but we are almost four years in, and there is no discussion about flying each other’s aircraft, or flying with mixed crews.

It sounds like the merger between Delta and Northwest the management wants to get the most out of things from day one, disregarding the sensitivities of the employees involved (back to the Anglo/Saxon management model). Delta’s and NWA fleets couldn’t be more different and it would be easy to keeps things separate for a number of years. Splitting any growth or contraction based on the amount of work that each brings into the merged company. This could give both pilot groups time to ease into the deal. Of course management deserves as much distrust as they get, having proven themselves to only look out for number one, but we still have a lot of power as pilots. Without us the things with wings don’t move.

Would be very interested on any feedback from Northwest or Delta pilots as to what would be acceptable for a merger model?

Flightknight, your last added link does not sound hopefull. But the arguments that are being posed don't have to add up to a negative. The take-over of KLM by Air France was at least as challenging. Both those airlines are older then either Delta or Northwest, and have the added challenges of having different languages and cultures, and countries. Yet the combined company has managed to generate greater profits than its seperate units. Significant costs savings have been realized (without letting anyone go), and significant growth has occured. Not only in revuenue, but also in fleet numbers.

I can understand the reluctance for each group, but consolidation will happen. Either one can be weakenend significantly during the coming slowdown, so that it will just be bought out. It is better to approach the deal while both being able to look each other in the eye, rather than one being down on his/her knees. That scenario only makes one party happy:E

Keep the news flowing >>>>>>>>>

LOL:), looks like there are not enough involved people reading this forum. I have read some things now, about the issue on a North American based forum. Sounds like the two sides are digging in nicely. Oh well, you can close her down.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a5iwhfPLT6dA&refer=news

So which regionals are going to survive this ?

So all the buzz is starting again around merger rumors. I have heard from 3 separate NW and DL folks in the last few days that the merger is on. The pilots at DL apparently have a TA regarding a post merger contract - sounds like the companies may just go ahead with the merger and hope for an arbitrated pilot list down the road. And of course a DL/NW merger would be followed shortly after by a CO/UA merger, no?!
Things are really getting a shakeup in the US right now. Airlines closing down one after the other - Frontier in bankruptcy now and all this merger talk. $110/barrel was only sustainable for so long I guess.

A deal could be announced Tuesday (Click Here for article...) (http://www.chicagotribune.com/news/nationworld/sns-ap-delta-northwest,1,18990,print.story)

CNN just reported that the deal is done - at least by the two companies - we all know it's not over til it's really over in this industry.

http://money.cnn.com/2008/04/14/news/companies/delta_northwest/index.htm?cnn=yes