Status Report: Delta - Northwest Airlines

According to credible published reports (including the Associated Press), a snag has developed in merger negotiations between Delta (DAL) and Northwest Airlines (NWA) involving the companies' pilots unions -- an issued believed to be resolved as late as Tuesday.

Reports indicate that the respective unions have in fact not reached a final agreement on "blending their seniority lists", which is the critical component of any airline combination where the pilots are concerned. In essence, pilots achieving seniority often risk that standing if their company is acquired, meaning the essentially are forced to begin the entire process from the beginning or, in other words, with far less pay and benefits and far less desirable routes. The inability of the acquiring company to incorporate the target company's senior pilots into the merged fleet can very easily develop into a major issue if not resolved quickly and amicably.

Naturally, this situation will be monitored closely for developments. In general, these matters are worked out more often than not, although this is certainly not guaranteed in any case. Either way, this issue will very likely delay a formal merger agreement for several days, if not weeks.

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