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Delta, Northwest merger would create biggest carrier

ATLANTA — Delta Air Lines and Northwest Airlines announced a proposed merger Monday that would create the world's largest carrier and possibly spur an industrywide round of restructuring that could vastly change air travel for millions of Americans.

The proposal, which was months in the making, would create a global airline with seven domestic hubs and international destinations from Asia to South America to Europe.

It comes as international agreements have cut barriers to competition, fuel prices have soared and the economy has weakened. In the past month, four discount airlines have sought bankruptcy protection.

The merger is far from a certainty, however. It needs to pass regulatory muster, and Northwest has yet to reach an agreement with its pilots, which could complicate integrating the airlines. Concerns about industry consolidation have been raised on Capitol Hill, where lawmakers have expressed extreme frustration in recent weeks at declining airline customer service, increasing flight delays and questions over the industry's maintenance practices.

It is not known how a merger would affect customers. Analysts generally agree that fares would increase, especially in markets not served by low-cost carriers. However, with the U.S. airline industry in such rough shape, passengers might be better off if carriers consolidate into three or four larger and stronger entities, the analysts said.

The Delta-Northwest merger, which the airlines valued at $17.7-billion, would result in an unknown number of job losses among administrative employees, but not frontline workers such as flight attendants.

The all-stock deal will forge an airline that will be the largest in the world in terms of traffic, but it is likely to unleash later merger deals that could be even larger, including a possible deal between United and Continental airlines.

Delta, the nation's third-largest carrier by traffic and Northwest, the fifth-largest, could potentially carry more than 175-million passengers a year, according to federal data.

At Tampa International Airport, a combined Delta-Northwest would rank No. 2 behind Southwest Airlines, carrying nearly one in five passengers.

Delta is already the second-largest airline at TIA with 27 daily departures to eight cities. The airline flew nearly 2.6-million passengers, or 14 percent of traffic at the airport, last year.

Northwest ranked No. 8 in 2007, with just over 1-million local passengers or 5 percent of the airport's total. It has 15 daily departures to four cities.

Neither of the airlines' routes from Tampa overlap. But both have reservations centers near the airport that each employ about 400 workers.

The proposed merger would not affect the carriers' frequent fliers, who are already members of the same international Sky Team alliance.

Information from Times staff writer Steve Huettel, the Washington Post and Cox News was used.

Delta, Northwest merger would create biggest carrier 04/14/08 [Last modified: Thursday, October 28, 2010 10:33am]
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