Delta, Northwest merge
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Major US carriers, Delta Air Lines and Northwest Airlines, have announced a merger that is set to cover over 375 cities across the globe and employ in excess of 75,000 people. The new entity will be called Delta Air Lines and headquartered in Atlanta.
The news is the latest in a series of mergers and acquisitions in the US aviation industry, brought about due to the difficult economic conditions and declining passenger numbers. US carrier’s posted an approximate US$1 billion combined loss in the third quarter of 2008. With the new deal however, Delta’s Chief Executive Officer, Richard Anderson, said he is optimistic about the future.
“Delta is combining the best of two industry leaders to create a premier global airline that will be unmatched in the scope and level of service we offer our customers,” Anderson said. “This is a different type of merger for the industry thanks to the complementary nature of the two airlines and the calibre of the people who will make this the most successful merger in airline history.”
The deal is expected to generate US$2 billion or more in annual revenue and cost synergies. Integration costs are thought to be around US $600 million.
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