Northwest CEO addresses merger rumors

January 12, 2008 6:15:16 PM PST
The chief executive of Northwest Airlines says his carrier could benefit from a merger - if it's the right deal. As the Delta Air Lines Inc. board met to discuss the issue, Northwest Airlines Corp. chief Doug Steenland sent an internal memo to employees Friday saying his airline's board and management team would analyze any deal carefully.

"Most importantly, we will carefully consider the impacts on our own employees and ensure that the outstanding employees of Northwest Airlines are included in this process," he wrote. "The right transaction could be of benefit to our employees, our shareholders and the communities we serve."

Steenland didn't say whether Delta had approached Northwest.

Delta officials were mum on the outcome of that company's board meeting Friday.

According to two people familiar with the situation, Delta's board was expected to be asked to allow formal talks between Delta and Northwest and UAL Corp.'s United Airlines, with the idea that Delta would ultimately choose to combine with one of the two. The people spoke on condition of anonymity because of the sensitivity of the talks.

Steenland said Northwest, which emerged from Chapter 11 bankruptcy in May, is better positioned than most of its competitors to run profitably. But he said fuel price increases have run above the carrier's projections, making it harder to maintain the same level of profitability and reinvest profits.

And he warned that Northwest, based in suburban Eagan, can't control or predict what other carriers or airline shareholders might do.

"Doing nothing could be our worst alternative," he said. "If we wait to react to what others do we could be left with options that are undesirable or with no options at all.

"You can be sure that we are giving this very important issue the serious attention it deserves - and that we will weigh carefully the strategic implications of each course of action available," he wrote.

Steenland also said in his memo that Northwest management would continue its policy of not commenting on rumors or speculation about talks with other airlines.


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