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New Delta Air Lines CEO Downplays Merger Speculation

Published: Wednesday, 22 Aug 2007 | 10:14 AM ET

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By: CNBC.com

Delta Air Lines' newly named chief executive, Richard Anderson, foresees further consolidation in the airline industry, but said Delta is not about to make a move to acquire Northwest Airlines.

Anderson was formerly Chief Executive Northwest [NWA Loading... () ].

On CNBC's Squawk Box, Anderson dismissed market speculation that he would move to merge the two carriers.

"Over time there will be consolidation in the industry," said Anderson, "but my coming to Delta is unrelated to my tenure at Northwest."

"Delta is in a very good position," he said. "The industry environment is very positive and Delta holds the best hand."

Anderson, currently a board member at Delta [DAL Loading... () ] and an executive at UnitedHealth Group, will replace Gerald Grinstein as Delta's CEO. Grinstein has said previously that he would step down once his successor was named.

Anderson, 52, will become CEO effective Sept. 1. With the appointment, Grinstein, 75, will retire from Delta and from its board.

Grinstein had lobbied Delta's board to tap an insider from the company as his replacement. The top internal candidates had been Chief Financial Officer Ed Bastian and Chief Operating Officer James Whitehurst.

Delta said Tuesday that Bastian will add the title of president. The company said nothing about Whitehurst. In a statement, Delta said Anderson "brings a unique depth of experience to the position, having served in top jobs for several major U.S. corporations."

The board's chairman, Daniel A. Carp, said Anderson "possesses the right blend of seasoned leadership, strategic skills, international experience and airline knowledge the company needs to navigate the industry's challenges and capitalize on its opportunities."

Anderson has worked at UnitedHealth [UNH Loading... () ] for nearly three years. Before joining UnitedHealth, he was CEO of Northwest Airlines from 2001-2004. He also serves as a director of Cargill and Medtronic, according to Delta's Web site.

The change at the top at Delta follows the airline's 19 1/2 month reorganization under bankruptcy protection.

Delta entered Chapter 11 on Sept. 14, 2005. The company emerged on April 30.
In bankruptcy, Delta shed billions in costs and restructured its operations. It also survived a hostile takeover bid by Tempe, Ariz.-based US Airways Group [LCC Loading... () ].

Delta executives, faced with questions about a post-bankruptcy valuation below what they initially projected and below what US Airways offered for Delta, have declined to speculate about whether the airline would consider a deal with another carrier to increase shareholder value.

Besides finding a new CEO, Delta's board also has to decide whether to sell or spin off regional carrier Comair. The airline has not provided a specific timetable for that decision.

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