Pilots still hold up Delta (DAL) merger with Northwest (NWA)
Posted by: admin in Industry NewsFiled under: Deals, Industry, Delta Air Lines (DAL)
Whether management and the board of Delta (NYSE:DAL) and Northwest (NYSE:NWA) think a merger of the two airlines is a good idea still does not seem to matter. The pilots at the two companies don’t want a deal.
Airlines may be one of the few industires where unions count. And, according to The Wall Street Journal “People familiar with the matter said the disagreement over seniority — which dictates which pilots fly which models of planes, how much money they earn and possibilities for career advancement — doesn’t necessarily mean the two airlines can’t go ahead with their merger plan.”
That would probably not be a risk worth taking. The value of the merger is still open to massive questions. The combination would not save on fuel costs. Labor unions could strike to keep their jobs, disrupting the new company’s flight schedules. Merging customer service operations is prone to cause glitches which will upset consumers, and, perhaps, send them to other airlines.
With margins running very low because of the high cost of jet fuel, Delta and Northwest cannot afford a pilot walk-out. They have the companies under their thumbs.
Douglas A. McIntyre is an editor at 247wallst.com.
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