Jan. 21--Now that Northwest Airlines Corp. and Delta Air Lines Inc. appear to be in formal discussions about a merger, many are wondering what's next for the two major U.S. carriers -- and the overall airline industry.
Experts say labor unions will play a pivotal role in any airline merger, so much so that a courting airline should be wooing not just a company, but its unions, too.
"A union can provide key support to make one deal happen and one deal go away," said Michael LeRoy, an airline expert at the Institute of Labor and Industrial Relations and the College of Law at the University of Illinois at Urbana-Champaign.
"If you have a union that is going to sit by idly and watch disgruntled members not appear for flights, that's a failed deal from the get-go," LeRoy said.
There has been debate in recent days about how consolidation would impact carriers. Some speculate that the marriage of a union airline with a mostly nonunion carrier -- as is the case with Northwest and Delta -- could force the union out because airlines are looking for cost savings.
Meanwhile, unions representing workers at Northwest say a merger could bolster the union because workers want to protect what they have after giving so many concessions to the airlines over the years.
So far, unions have been watching developments closely.
Wade Blaufuss, a spokesman for the Air Line Pilots Association, which represents Northwest pilots, said the union would support the right deal if it were included in talks and meant improved pay and benefits for the airline's employees. " We are survivors of the cancer of bankruptcy," Blaufuss said last week. "We support efforts to do what's necessary to avoid bankruptcy again."
Northwest pilot union leaders who met late last week unanimously passed a resolution that says "a merger may be in the best interests of the Northwest pilots" depending on who the other airline is and what labor terms are reached.
Northwest is Metro Airport's largest passenger carrier.
Delta spokeswoman Betsy Talton declined to comment on the labor issue and said the company was unable to provide an update on its plans.
Tammy Lee, Northwest's vice president of communications, declined comment.
While many are monitoring the labor situation, the executive ranks at the airlines are also of particular interest.
Filings from the Securities and Exchange Commission show that Northwest CEO Doug Steenland would walk away with $7.5 million in pay and incentives if Eagan, Minn.-based Northwest Airlines were to be acquired.
Steenland's compensation includes pay and benefits that include travel for himself and his family.
Experts say such a package is typical for executives.
"Unions question why executives are getting bonuses when the rank and file are making sacrifices," LeRoy said.
Although it's unclear which executives would stay, he said it is unlikely that both CEOs would stay on if there is a deal, said merger expert Jim McTevia of Bingham Farms.
"There's lots of cheer and toasting when big corporations merge, but there can only be one chairman, and one president and CEO."
The Associated Press contributed to this report.
