January 17, 2008
Delta Air Lines has begun merger talks with Northwest Airlines, the office of House of Representatives Transportation Committee Chairman James Oberstar said on Wednesday.
The Minnesota Democrat on Tuesday met senior Northwest executives who told him that discussions were underway and that Northwest does "see a benefit" in a merger with Delta, Oberstar spokesman Jim Berard said.
Northwest also told Oberstar that Delta is looking at United Airlines.
Oberstar generally does not support consolidation involving major carriers because of the potential impact on competition, prices and service, especially to small communities. The current situation concerns him even more because he believes a Delta merger will spur other deals.
"They would have to do a good job of convincing him that this is a good thing on a wide scale, not just to the shareholders," Berard said.
Berard said Oberstar would likely hold hearings on any proposed merger.
Northwest is the largest employer in Minnesota.
Congress cannot stop a merger outright, but it can pressure antitrust regulators and companies. Delta successfully leveraged its muscle on Capitol Hill to beat back a hostile bid by US Airways last year.
All three airlines have declined previously to discuss reports of merger talks.
(Reuters)