The Delta Air Lines and Northwest Airlines merger is likely to go ahead with Delta pilots voting overwhelming in favour of changes to their contracts and an influential lawmaker on aviation affairs saying the merger is not anti-competitive and likely to be approved.
The new contract covers more than 7,000 pilots at Atlanta-based Delta. Northwest's 5,000 pilots are not part of the agreement.
Representative John Mica, a Florida Republican and former chairman of the House of Representatives aviation subcommittee, told a hearing the industry faces enormous challenges and it was more likely than not that "this merger will be granted" by officials at the Justice and Transportation departments who are reviewing the potential impact on competition and service.
He said the deal to create the world's biggest airline did not appear anti-competitive.
The contract with the pilots will give them pay raises, an equity stake and other benefits, but will also give management more leeway in implementing the merger.
In exchange for the contract, the company will be able to place the Delta code and brand on Northwest flights and retain Northwest's large stake in Midwest Airlines, while maintaining the two carriers' separate operational status.
Delta announced April 14 that it had agreed to acquire Northwest in a stock-swap deal that would create the world's largest carrier. The deal, which calls for the combined carrier to be called Delta and to be based in Atlanta, must be approved by shareholders and regulators. Delta pilots have been granted a voting seat on the board of the combined company.
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