Delta Buys Northwest To Create Largest Airline
Delta Air Lines swallowed rival Northwest Airlines Inc on Wednesday in a $2.6 billion merger that created the world’s biggest airline and prompted new speculation about further industry consolidation.
The all-stock transaction, the first domestic airline combination in three years, closed after clearing its biggest and last regulatory hurdle earlier in the day — U.S. Justice Department antitrust review.
Justice officials cited the likelihood of “substantial and credible efficiencies” without harming consumers or competition.
Government approval was expected. Industry vigorously made the case to regulators earlier this year, when airline finances were rockier than they are now, that consolidation was an important tool for remaining viable with fuel prices high and the economy worsening.
“The airline industry faces a very difficult economic environment around the world and this merger gives Delta increased flexibility to adapt to the economic challenges ahead,” said Richard Anderson, the Delta chief executive who will head the combined entity.
The new, larger Delta will be an international powerhouse with unparalleled scheduling and pricing strength with service to 375 cities worldwide, experts said. The company estimates a combined $2 billion in cost savings and revenue enhancements annually. Read full story here.
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