The Delta - Northwest merger

16 April 2008

Delta and Northwest Airlines have finally announced a long-awaited multi-billion-dollar merger, that is expected to generate more than $1 billion in annual revenue and cost savings. By Sourya Biswas

The third and seventh largest airlines in the world combine to overtake the No 1.

That, in a nutshell, is the result of the Delta-Northwest merger, poised to overtake American Airlines as the largest global airline with combined annual revenue of $31.7 billion, a fleet size of 800-plus aircraft and employing more than 75,000 people who service over 390 destinations in 67 countries, including more than 140 small destinations across the US. (Also see: Delta, Northwest merger decision to create world's largest airline)

That is, if the deal goes through the regulators.

The two protagonists in this corporate saga, Delta Airlines and Northwest Airlines, have a lot in common, besides the obvious one of being US-based carriers. Both declared bankruptcy in September 2005, and came out of Chapter 11 protection within one month of each other – Delta in April 2007, and Northwest in May 2007.

Both are members of the global alliance SkyTeam, and had been led by the same person at different points of time – former Northwest CEO and current Delta CEO Richard Anderson.

The losses caused by the slowdown in the the industry after September 11, the relentless rise in fuel bills and the threat of competitive challenges from carriers from low-cost countries, mainly East European and Asian, have been weighing in favour of mergers to cut overlaps and costs..