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Airline Mergers

Delta, Northwest Clinging On

March 10, 2008 at 1:26 PM | 0 Comments

The Delta-Northwest merger hasn't flatlined yet, though pilots are still wrapped up in a weeks-long argument over seniority. Even if execs wanted to walk away from the deal now, it appears doing so could be fatal for the carriers. Now that oil has surged past $100-a-barrel, neither airline seems prepared to go it alone:

Delta CEO Richard Anderson, shortly after crude oil reached $103 a barrel, told his employees a week ago that Delta's 2008 business plan was built on $90-a-barrel oil.

Both companies recovered from bankruptcy last year after serious reorganizations, says the Minneapolis Star Tribune. But rising oil prices and the increasing popularity of foreign carriers and domestic LCCs have challenged those already-dated business models. A successful merger may be their only hope.

Related Stories:
· Merger a route to survival? [Star Tribune]
· Airline Mergers coverage [Jaunted]

[Photo: Drewski2112]