A merger between Delta Air Lines and Northwest Airlines could be announced in the next few weeks as Northwest pilots review details of a proposed deal.
Northwest's Air Line Pilots Association has been provided with details of what a combined carrier would look like.
It is said that a deal between the two airlines, which would create the largest passenger airline in the world, could be announced within the next few weeks. Although the exact structure of the deal remains unclear, many analysts believe Delta would end up buying Northwest.
Many airline experts say mergers are needed to help stabilise the volatile industry, which finally emerged from a five-year slump in 2006 after racking up US$35 billion in losses.
United Airlines, whose parent company is UAL Corp, and Continental Airlines also are in initial stages of merger talks.
Analysts have said the mergers could lead to higher fares in some markets, at least in the short term, as combined carriers cut costs by reducing flights and use their increased market power to raise prices.
A Delta-Northwest deal would combine Delta's strong Atlanta hub and its transatlantic route network, with Northwest's extensive Asia presence that includes a hub in Tokyo.
The pilots of Northwest have said they would support a merger with another carrier if the workers received a stake in the combined airline.
But Delta's pilot union helped derail a hostile takeover bid by US Airways Group last year by rallying opposition from the company's bankruptcy creditors committee and employees.
Northwest's flight attendants, who like the carrier's pilots were forced to accept deep wage cuts while Northwest was in bankruptcy protection, have said they also would demand a stake in a combined airline, as well as job protection and higher wages for its members.
Unions see consolidation as an opportunity to claw back some of the hundreds of millions of dollars of wages and benefits lost during the industry's five-year slump, which ended in 2006.
But the carriers' employees also are nervous, as any deal could result in job losses and upset seniority rankings, union members said.
Seniority is critical for pilots because it helps determine pay, work schedules and the size of aircraft they fly.
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