The wall of silence around the US airline industry’s biggest (possible) deal in years may have cracked, just a little but. The top two Delta Air Lines executives broke silence on a possible merger with Northwest Airlines, telling employees that the Atlanta-based carrier has yet to “arrive at a potential transaction that meets all of our principles” for a merger or combination. The employee memo is the first communication from either Delta or Northwest Airlines since the two carriers (sort of) acknowledged merger discussions. Delta chief executive Richard Anderson (right) and president and chief financial officer Ed Bastian said in their internal memo that they would not enter into a deal unless the combined carrier was be called Delta and be headquartered in Atlanta. Although these principles are similar to those stated earlier by the airline, executives at the airline have been silent for a week, as have officials of the Air Line Pilots Association chapters at both carriers. (Listen to a Tuesday afternoon IAG podcast here about the labor issues.)
It is widely believed that disagreement over combining seniority lists of the two pilot-union groups has delayed any deal. Seniority, based in the date of hire, is all important, and the old-fashioned bid, ask, and post seniority-list (right) system, even in the computer age, remains central to any pilot’s life. The decaying labor situation at US Airways, where two separate ALPA chapters have feuded since 2005 over workforce integration issues, has caught labor’s attention. The union groups, one from the old America West, which bought US Airways, and one from the former US Air, have disagreed over an outside arbitrator’s decision on blending the two work groups. Some pilots have moved to form a splinter group.
It is believed that the Northwest union is firmly opposed to any third-party arbitration. The Northwest and Delta pilot groups are believed to have reached agreement on a tentative new combined pay scale that could give some nice bump-up raises.But Delta’s Anderson and Bastian say that the issue of seniority and job security isn’t just a pilot issue. They insist broadly that the “seniority of our people is protected; that the pension plans of our employee and retirees are maintained, that the network is strengthen and that our plans for international expansion are accelerated.” They added that Delta’s most important criterion for any deal is that “there is even greater job security along with more career opportunities for our people”.