Jan 12, 2008 12:45 pm US/Central
Northwest CEO Addresses Merger Rumors
MINNEAPOLIS (AP) ―
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Northwest Airlines Corp. chief Doug Steenland said Northwest, which emerged from Chapter 11 bankruptcy in May, is better positioned than most of its competitors to run profitably.
CBS
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.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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