Delta CEO Touts Merger as Best For Workers
Delta Air Lines Chief Executive Richard Anderson told employees that a merger may be in their best interest.
"We have said that Delta would be open to consolidation if it was in the best interests of our shareholders and our employees," Anderson said in a weekly voicemail to employees that was posted late on Tuesday. "We have the best interests of Delta and its employees in mind."
He did not comment on a report in The Wall Street Journal on Tuesday that Delta is in merger talks with both Northwest Airlines and United Airlines parent UAL and aims to select a partner by early February.
Delta, Northwest and UAL have declined to comment on the reported talks.
Managers are working to win over employees, who gave up wages and benefits in order to keep the airlines operating during the five-year slump following the Sept. 11, 2001 attacks.
Airline workers, especially pilots, have a powerful voice in the industry and could hobble a deal if they disapprove.
In a similar move, Northwest CEO Doug Steenland sent a memo to employees on Tuesday saying the No. 5 U.S. carrier needed to consider all options in order to stay competitive.
Northwest cannot "just wait for our future to be dictated to us," Steenland said in the memo.
The U.S. airline industry is trying to rescue its fledgling recovery, which is threatened by soaring fuel prices and a softening economy. Most major airlines are expected to post losses for the fourth quarter of 2007 after profits earlier in the year.
Mergers are seen as a way to stabilize the industry by allowing carriers to cut costs, reduce capacity and raise fares.
Delta has been at the forefront of airline merger talk for months. In November, it said it had set up a special board committee to help it review strategic options, including mergers.
Anderson said high fuel prices, which are hovering near record levels, require Delta to examine its options.
"With these fuel prices at the levels we haven't seen before, it's important that we always be certain that Delta is in a safe harbor and that it is a leader in the global airline industry," he said.
Delta, which emerged from bankruptcy last spring after fending of a hostile takeover bid from US Airways Group, is expected to post a loss for the fourth quarter.
Anderson told employees that a merger could "make Delta a stronger and more viable enterprise."
"It will improve your situation at Delta, all of our situations at Delta," he said.