Delta, Northwest May Merge After Union Talks

Phil Lebeau, CNBC Auto and Airline Industry Reporter

Executives atDelta Air Linesand Northwest Airlinesmay reach a merger agreement after sharing details of their plans with the companies' pilot unions, according to people familiar with the talks.

The two airlines are pursuing a potential deal in a very methodical way, sources say. As a result, a deal may not be announced for several weeks.

The negotiations with the labor unions are seen as essential to ensuring a smooth integration of the two airlines after a deal closes.

  • Video: Phil Lebeau on Delta's union wooing (1 min, 53 secs)

Negotiations between the airlines have already settled some details of a combination, including the management of the merged company. This had been a stumbling block in past negotiations between the two companies.

If Northwest and Delta   are able to come to a common labor contract with the pilots' unions and announce a merger, the deal is expected to put increased pressure on rivals such as UAL and Continental Airlines to strike their own deals.