Delta, Northwest Agree on Airline Merger

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Executives from Delta and Northwest Airlines are making it official today: they're planning a mega merger that would create the world's biggest airline.

Third largest carrier Delta and seventh ranked Northwest Airlines are merging after months of talks. And when you add number three to number seven in aviation, you get the new number one.

The deal would create the largest carrier in the world and comes during tough times for the industry -- in the midst of a regulatory crackdown and record high oil, making it harder to turn a profit.

Company executives say the merger will make the expanded airline more competitive.

The two airlines, which employ more than 80,000 people, aren't yet announcing any cuts, though they are expected and they say they won't close any hubs.

But not everyone is thrilled about the deal.

"Fares will go up. Choices will go down. Consumers will bear the brunt of it," said Rep. Jim Oberstar, D-Minn.

There are still some hurdles to jump before the deal becomes official. They have to resolve contract issues involving labor unions, their shareholders must sign off, and they need the government to OK the $17-billion proposal.

This may only be the first round of airline mergers. United and Continental are reportedly in advanced talks. Insiders say they want to reach a deal "pretty quickly" if and when the Delta-Northwest announcement becomes official.

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CBN News
John Jessup

John Jessup

CBN News Washington Correspondent

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