Northwest Airlines Logo Fading Away

Detroit Free Press

After 84 years, the Northwest Airlines brand will fade into history sometime during the first three months of 2010.

That's when the airline's Web site, www.nwa.com, will stop accepting reservations and redirect people to Delta Air Lines' Web site, www.delta.com. The Northwest name will disappear from boarding passes, airport monitors and airplanes.

The changes will occur because the Federal Aviation Administration gave Northwest and Delta the green light on Thursday to finish integrating their operations and approved their request to fly under a single operating certificate. Though the carriers announced plans to merge in April 2008, until now they have had to maintain separate flight operations.

"For the first time, pre-merger Northwest operations will be combined into Delta's operations," Stephen Gorman, Delta's executive vice president and chief operating officer, told Delta employees in a memo Thursday.

The merger creates the world's largest airline, carrying more than 170 million passengers a year to 368 destinations around the globe.

Delta already took a number of steps to integrate its operations with Northwest in 2009. Delta signs replaced Northwest ones at all but one of the 240 airports where both carriers operate, including Detroit Metro Airport.

Nearly 200 of Northwest's 260 mainline planes were repainted in Delta's colors. And in October, Northwest customers' frequent flier miles were transferred to Delta's SkyMiles reward program.

Merging two major carriers is no easy feat. To get the single operating certificate, teams of Delta and Northwest employees had to complete more than 10,000 individual tasks and integrate 385 manuals and 100 operating specifications, programs and processes.

But the combined airlines' employees aren't celebrating yet. More work lies ahead, including completing critical information technology projects, creating a single dispatch system and resolving labor representation issues for flight attendants and ground workers.

"The single operating certificate is an important milestone," Delta spokesman Kent Landers said. "But there is still a lot to be done."

Delta Air Lines, Northwest Complete Merger

Delta Air Lines Inc. and Northwest Airlines Corp. closed their merger transaction just hours after the U.S. Justice Department said it wouldn't block the plan, in a step that creates the world's largest airline company by traffic.

The deal essentially was a Delta acquisition of Northwest in a $2.6 billion all-stock transaction, based on Northwest's share price Wednesday on what was its last trading day on the New York Stock Exchange. Its shares rose 13 cents, or 1.3%, to $9.90 in 4 p.m. composite trading. Now Northwest is a wholly owned unit of Delta.

The next step will be for the carriers to put months of integration planning into practice as they meld fleets, computer systems, work forces, airport gates and frequent-flier plans, while seeking the cost savings and revenue synergies on which the deal is based.

In a briefing with reporters late Wednesday, Richard Anderson, Delta's chief executive, said the $2 billion in projected cost savings and additional revenue created by the merger would help the combined company withstand volatility in fuel prices and the continuing financial crisis better than if the two companies stood alone. The combined companies will have "a lot of opportunity, a lot of resources, and a lot of tools to weather the financial difficulties," he said. "When facing those kinds of challenges, having $2 billion in synergy opportunities becomes extremely important."

Because the two airlines have little route overlap, it wasn't expected that antitrust regulators would seek concessions or place conditions. The Justice Department said it found after a six-month investigation that the combination is likely to produce efficiencies that will benefit consumers and not lessen competition.

Another obstacle was cleared last week when Delta and Northwest reached a settlement with plaintiffs in an antitrust lawsuit that was to go to trial Nov. 5 in U.S. District Court in San Francisco. The suit, filed last June, sought to block the merger on grounds that it would lessen competition and cause ticket prices to rise. The 28 named plaintiffs are passengers who purchased tickets on the carriers in the past. The settlement, terms of which haven't been disclosed, was announced Wednesday by plaintiffs' attorneys.

Much work lies ahead to ensure the transition is smooth, given the rocky track record of labor strife, system meltdowns and poor customer service in other airline combinations over the years. The task is all the more challenging given that a majority of Northwest's workers are unionized and most of Delta's aren't, and because the airlines have different aircraft types and multiple models. The integration is expected to be fully completed in about two years.

More than two dozen integration teams have spent months preparing. The top executive team has been selected. Northwest flight attendants will don Delta uniforms come spring. The companies already are working to align customer-loyalty programs, and expect shortly to give upgrade priority to each other's elite fliers on both carriers' flights. The companies said the Federal Aviation Administration last month approved their plans for achieving a single operating permit, a process that could take as many as 18 months.

One issue that isn't yet resolved is how the airlines' pilot groups will resolve their seniority integration. But Delta's 6,000 pilots and Northwest's 5,000 already have voted for a common labor contract and agreed to abide by an arbitrator's ruling if they can't agree by next month. Seniority determines pay, work schedules and vacation for pilots.

Delta and Northwest in April announced plans to merge, raising expectations that other U.S. carriers would rush to combine to stay competitive and better weather deteriorating industry conditions. But as fuel prices rose rapidly in the spring and summer, mergers began to look too risky and many other airlines that had discussed combinations ended their talks.

Together, Delta and Northwest will have more than $35 billion in revenue, a fleet of nearly 800 planes and 75,000 employees. Delta Chairman Daniel Carp assumes chairmanship of the new board, which was formed Wednesday. Mr. Anderson assumed that role at the combined entity. Doug Steenland, Northwest's CEO, joined the combined airline's board as a director.

The "new" Delta gains Delta's Atlanta hub, operations at New York's John F. Kennedy International Airport and extensive European route network, along with Northwest's strengths in the Upper Midwest, Pacific route network and trans-Atlantic relationship with KLM Royal Dutch Airlines, a unit of Air France-KLM SA. Air France already is Delta's European marketing partner and those two, along with Northwest and KLM, enjoy U.S. antitrust immunity to set fares and capacity on trans-Atlantic routes.