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US merger forms 'largest airline' | |
(about 1 hour later) | |
Rival US companies Delta Air Lines and Northwest Airlines have agreed to merge in a $5bn (£2.5bn) deal that would create the world's biggest carrier. | |
But the two pilots unions did not agree on the new terms of their contracts before the merger was announced. | |
The new airline, to be called Delta, will have annual revenue of more than $35bn and employ some 75,000 staff. | |
Analysts say the deal could prompt similar moves by other US airlines struggling with rising oil prices. | |
But the stock-swap deal, which was sealed a year after both carriers emerged from Chapter 11 bankruptcy protection, could face resistance from unions. | |
Pilots for Northwest and the union acting on behalf of most of the carrier's ground workers said they would oppose the merger. | |
Airlines worldwide are suffering in the wake of a consumer slowdown in the US and Europe, making it harder to raise ticket prices against the fuel-price hikes. | Airlines worldwide are suffering in the wake of a consumer slowdown in the US and Europe, making it harder to raise ticket prices against the fuel-price hikes. |
Atlanta base | Atlanta base |
The merger agreed on Monday night will see Northwest shareholders receiving 1.25 Delta shares for each of their Northwest shares. | The merger agreed on Monday night will see Northwest shareholders receiving 1.25 Delta shares for each of their Northwest shares. |
The combined company, which will be headed by Delta Chief Executive Officer Richard Anderson, will be based in Atlanta. | The combined company, which will be headed by Delta Chief Executive Officer Richard Anderson, will be based in Atlanta. |
An unspecified number of job cuts are expected to reduce overlap in corporate and administrative departments, Delta said. | An unspecified number of job cuts are expected to reduce overlap in corporate and administrative departments, Delta said. |
Before the merger, Delta had said it would eliminate 2,000 jobs this year. | Before the merger, Delta had said it would eliminate 2,000 jobs this year. |
The deal still requires antitrust approval. |