September 2022, Virtual
September 29 2022, Virtual
Now in its 27th year, the Business Travel Awards
Delta Air Lines (DL) and Northwest Airlines have merged to from the world's biggest carrier.The new airline will be called Delta and based in Atlanta, Georgia.DL ceo Richard Anderson will take the same position with the new airline while Doug Steenland, Northwest's ceo, will become a director of the new carrier.The airlines said the merger would cut costs at a time when the US economy was in slowdown, fuel costs were rocketing and competition was intense.Under the deal Northwest shareholders will acquire 1.25 shares in Delta for each Northwest share they owned.The deal, which values Northwest at $3.6bn, creates a new carrier with about $35bn a year in revenues, nearly 800 planes and a 75,000 strong workforce.DL and Northwest said the merger would create more job security and "a more stable platform for future growth."They said Delta would generate a $1bn in annual revenue and cost synergies “from more effective aircraft utilization, a more comprehensive and diversified route system and cost synergies from reduced overhead and improved operational efficiency.”The new carrier will fly to more than 390 destinations in 67 countries.Delta and Northwest said that belonging to the same airline alliance of SkyTeam had eased the integration problems that had complicated other mergers.They said they expected integration costs to be less than $1bn.Both share a common IT platform, frequent flyer programmes and lounges.They said the deal would “enable an accelerated joint venture integration with Air France/KLM, creating the industry's leading alliance network."Richard Anderson, DL's ceo, said: “We said we would only enter into a consolidation transaction if it was right for all of our constituencies; Delta and Northwest are a perfect fit."We're announcing a transaction that is about addition, not subtraction, and combines end-to-end networks that open a world of opportunities for our customers and employees."Together, we are creating America's leading airline – an airline that is financially secure, able to invest in our employees and our customers, and built to thrive in an increasingly competitive marketplace.”The US Department of Transportation indicated last week, before the merger was confirmed, that it was ready to grant anti-trust immunity immunity to six carriers in the SkyTeam alliance on transatlantic routes.The six airlines are Air France, KLM, CSA Czech Airlines, Alitalia, Delta Air Lines and Northwest Airlines.The DoT said the alliance was in the public interest because "it features a proposed new and highly integrated joint venture that will likely produce efficiencies and provide consumers with additional price and service options, such as lower fares and more nonstop and connecting flights.”Air France KLM welcomed the tentative approval as it "seems to be a logical response to both the Air France KLM merger and the new EU-US Open Skies agreement."