Deal is cleared by antitrust regulators

Just hours after they received clearance from the antitrust regulators at the Justice Department, Delta and Northwest Airlines announced the completion of their long-awaited merger, making Northwest a wholly owned subsidiary of Delta. The company will be headquartered in Atlanta, and the airlines announced plans to combine their operations over the next year or two – although some changes will come sooner. Among them:
· Delta will put its code on “nearly all the Northwest system” by the end of this year, the company said.
· The two airlines will institute “immediate complimentary upgrade reciprocity” for the elite members of their frequent flyer programs, so that a Delta SkyMiles elite member’s status will apply when he seeks a Northwest upgrade, and vice versa. The two already share airport lounge reciprocity.
· Delta and Northwest will roll out “a fully consolidated worldwide flight schedule” by next summer.
· Delta’s staff uniforms, aircraft livery, in-flight entertainment and other amenities will be introduced to Northwest’s system beginning in the spring.
· The two airlines’ mileage programs will eventually be consolidated, “ultimately including the ability to combine miles from SkyMiles and WorldPerks accounts at a one-to-one ratio.”
· The two airlines’ web sites, passenger kiosks and other “customer-facing technology” will be fully integrated.

Delta and Northwest had been hoping for months that officials in the Justice Department of the business-friendly Bush Administration would rule on their merger request before the government changes hands in January 2009, and they got their wish. The Justice Department’s antitrust division finally issued its ruling, finding no problems with the combination of the two airlines. DOJ said that over the course of the six-month investigation of the proposed merger, its representatives talked with “a wide range of market participants, including the companies, other airlines, corporate customers and travel agents.” The agency concluded that the proposed merger “is likely to produce substantial and credible efficiencies that will benefit consumers and is not likely to substantially lessen competition.” DOJ determined that if they combine, the two airlines will still face competition from other legacy and low-cost airlines “on the vast majority of nonstop and connecting routes where they (currently) compete with each other.” DOJ added that a merger would allow the companies to save considerable costs by combining their operations, and that consumers would benefit “from improved service made possible by combining under single ownership the complementary aspects of the airlines’ networks.”