Delta Air Lines and Northwest Airlines said on Tuesday that competition issues should not hinder the US antitrust review of their merger proposal to become the largest carrier.
"These two networks are largely end to end. There are plenty of alternative choices," Northwest Chief Executive Doug Steenland said at a joint news conference with his counterpart at Delta, Richard Anderson.
Steenland said Northwest and Delta have formally submitted their proposal to the US Justice Department, which is expected to take several months to complete its review. Overlapping business and market share will be a key consideration for antitrust officials, experts say.
Delta and Northwest, if approved, would have 19 percent of the domestic airline market.
Anderson and Steenland planned to meet lawmakers ahead of two hearings on Thursday in the House of Representatives and Senate. Some members of Congress have general concerns about the deal's impact on service and jobs.
Steenland and Anderson, who plan to run the new carrier under the Delta flag, also said they do not believe the merged company should be required to divest any major assets to win regulatory approval.
Divestment is a common way for antitrust enforcers to lessen the impact of consolidation. Merged airlines in the past have often had to relinquish airport gates, takeoff or landing rights, and other assets, to benefit rivals or new entrants as a way to maintain competition.
Anderson and Steenland said the continuing sharp rise of fuel prices -- with crude oil setting another record on Tuesday at USD$118 per barrel -- was an unknown future cost factor for all airlines. But the executives said the merger plan calls for maintaining service at current levels.
"It's very clear that these two airlines together are much stronger in terms of being able to combat fuel prices," Anderson said.
Delta and Northwest shares have dropped in the week since the deal was announced, partly on general fuel price concerns, a softening economy, and weaker airline industry earnings. But shareholders also have been underwhelmed about the potential value of the merger since the carriers are not planning much in the way of cuts.
The merged carrier anticipates about USD$1 billion in annual revenue and cost benefits.
"Our view is a longer term view on how you have a viable enterprise," Anderson said.
Delta and Northwest separately have raised fares and other charges and recently announced capacity cuts to try and counter fuel cost increases.
