NEW YORK (AFP) — Delta Air Lines said Wednesday its pilots had cleared merger plans with Northwest Airlines that would create the largest US carrier.
Delta said the Air Line Pilots Association (ALPA) had informed it Wednesday that Delta pilots had overwhelmingly voted to approve a change in their current contract that would promote revenue synergies in the new company.
"We are pleased with the Delta pilots' decision to ratify a modification to their current contract, marking an important step towards combining our two great airlines," said Delta chief executive Richard Anderson.
The merger of Delta, the nation's third-largest airline, with number-five Northwest, will create a new mammoth airline that keeps the Delta name and like its namesake, will be headquartered in Atlanta, Georgia.
The Delta pilots' refusal to concede salary and seniority concessions was one of the stumbling blocks that had held up the widely expected merger, which was announced in mid-April.
The planned merger comes amid consolidation in the aviation sector as airlines struggle to survive amid spiking fuel prices, which have more than doubled in a year.
Anderson said Delta remained committed to working with the ALPA leadership of both the Delta and Northwest pilots to reach a joint pilot agreement before the closing of the merger.
The future Delta and its regional partners would serve 390 destinations in 67 cities, have combined revenues of more than 35 billion dollars, a fleet of nearly 800 aircraft and about 75,000 employees worldwide.
The new merged entity, with a market capitalization at 17.7 billion dollars, is expected to generate annual cost-savings of one billion dollars.
Delta said it expected the combined company to have nearly seven billion dollars in cash at the merger closing.
The would-be partners announced a combined 10.5 billion dollars in losses on April 23, about a year after they left the bankruptcy protection that had offered them a chance to clean up their balance sheets instead of going broke.
Both airlines explained that they had written down their value to account for a jump in jet fuel costs that is weighing on their profit outlooks and to calculate a fair value ahead of their planned merger, announced on April 14.
Delta said Wednesday it expected the deal to be completed this year, after approval from regulators and the companies' shareholders.
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