This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7347731.stm
The article has changed 6 times. There is an RSS feed of changes available.
Version 4 | Version 5 |
---|---|
US merger forms 'largest airline' | US merger forms 'largest airline' |
(about 8 hours later) | |
Rival US companies Delta Air Lines and Northwest Airlines have agreed to merge in a $5bn (£2.5bn) deal that will create the world's biggest carrier. | Rival US companies Delta Air Lines and Northwest Airlines have agreed to merge in a $5bn (£2.5bn) deal that will create the world's biggest carrier. |
The new airline, to be called Delta, will have annual revenue of more than $35bn and employ about 75,000 staff. | The new airline, to be called Delta, will have annual revenue of more than $35bn and employ about 75,000 staff. |
Analysts say the deal could prompt similar moves by other US airlines struggling with rising oil prices. | Analysts say the deal could prompt similar moves by other US airlines struggling with rising oil prices. |
But the deal, sealed a year after both carriers exited bankruptcy protection, could face resistance from unions. | But the deal, sealed a year after both carriers exited 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. | 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 to offset rising fuel-prices. | Airlines worldwide are suffering in the wake of a consumer slowdown in the US and Europe, making it harder to raise ticket prices to offset rising fuel-prices. |
"Merging Delta and Northwest is the most effective way to offset higher fuel prices and improve efficiencies, increase international presence and fund long-term investment in the business," said Delta chief executive Richard Anderson, who is also to lead the new airline. | "Merging Delta and Northwest is the most effective way to offset higher fuel prices and improve efficiencies, increase international presence and fund long-term investment in the business," said Delta chief executive Richard Anderson, who is also to lead the new airline. |
However, shares in both companies had fallen by market close on Tuesday. Northwest shares fell 94 cents, or 8.4%, to $10.28, while Delta lost $1.32, or 12.6%, to $9.16. | |
'Pro-merger' | 'Pro-merger' |
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 will be based in Atlanta. | The combined company 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 approval from competition authorities but it is not expected to face hurdles on that front. | The deal still requires approval from competition authorities but it is not expected to face hurdles on that front. |
"We will look at the competitive effects of the transaction and how it would affect consumers," Justice Department spokeswoman Gina Talamona said on Tuesday afternoon. | "We will look at the competitive effects of the transaction and how it would affect consumers," Justice Department spokeswoman Gina Talamona said on Tuesday afternoon. |
"This administration has taken a very pro-merger stance," said Diana Moss, an economist at the American Antitrust Institute. | "This administration has taken a very pro-merger stance," said Diana Moss, an economist at the American Antitrust Institute. |