Delta’s selection of a new CEO spurs new merger rumors

Delta Air Lines, which fought off a proposed acquisition by US Airways several months ago, is now hearing some buzz on Wall Street about the possibility of a Northwest-Delta combination. That’s because Delta’s board has decided to replace retiring CEO Gerald Grinstein with Richard Anderson, who was formerly the CEO of Northwest. Anderson spent 14 years rising through the ranks at Northwest before he left the company in 2004 to become executive vice president of United Health Group. The board last week also promoted Delta CFO Edward Bastian to president and CFO.

The hiring of Anderson to Delta’s top executive spot led to immediate speculation about the Delta board’s ultimate intentions. For example, a story in the New York Times started off with the words: With Northwest Airlines’ former chief executive now in charge at Delta Air Lines, could closer ties between the companies be far behind?” Other press accounts quoted Wall Street analysts as saying that the relative lack of overlap between the two airlines’ route systems would make Northwest and Delta a good merger prospect. Both airlines, as well as Continental, are already members of the global SkyTeam alliance. The reports had Anderson on the defensive as soon as his new job was announced; he told reporters that “I did not come here (to Delta) with any merger intentions,” but that did not stop the speculation. According to Aviation Week, the new CEO reiterated his denial to the Delta pilots’ union; the publication said the Delta pilots’ chairman told members Anderson “assured me that he was not selected as CEO to facilitate a merger between Delta and Northwest or any other airline.”