Pilot conflict keeps NWA- Delta merger plan on hold

Pilot leaders from Northwest Airlines and Delta Air Lines entered the weekend with no resolution to the vexing issue of integrating their pilot seniority lists.

An announcement of a proposed Delta-Northwest merger has been placed on hold, because executives don't want to proceed with a deal until the pilots resolve their serious conflicts.

The executive council of the Northwest pilots union met Friday in Bloomington to discuss the seniority issue. In a message, the council said that it received a report on "cooperative merger exploration," but did not take any votes.

The council also said that it "remains steadfast and in full agreement that any consolidation must have a reasonable and beneficial seniority list integration for all pilots."

Spokespersons for the Northwest and Delta pilot groups declined to comment about the status of the seniority talks.

Julius Maldutis, president of New York-based Aviation Dynamics, interpreted the silence as an indication that a "do-or-die debate" is taking place, with the pilots likely to spend the weekend attempting to find a path to a deal.

"The more I look at this thing, the more concerned I am that there will be no seniority agreement and no merger," Maldutis added.

Failure to reach a pilots' agreement could kill the merger, but it's unclear whether management is willing to wait days or weeks to see whether the pilots can finish their work.

The two companies have resolved their issues and are poised to sign a merger agreement, but they don't want to unveil a deal and then watch the pilots get mired in a years-long conflict about seniority integration.

Management could decide that it's better to be patient than to walk away and see many weeks of merger preparations and discussions go to waste.

Also, Wall Street could react badly if the two airlines call off a deal and decide to fend for themselves again in an era of record fuel prices.

Seniority is a major issue among pilots, because it defines their career progression within an airline. It determines which pilots fly larger airplanes and earn bigger paychecks.

Pilots also would get an equity stake in the new carrier.

Both sets of pilots are members of the Air Line Pilots Association (ALPA), and the union's overarching policy relating to mergers is that no one group would reap a windfall at the expense of another.

At Northwest, a three-member merger committee, whose chairman is pilot Mike Lazarowicz, is negotiating with Delta pilots concerning seniority. Dan Katz, an attorney from Washington, is serving as Northwest ALPA's seniority integration expert.

Katz represented Republic pilots in the 1986 merger with Northwest. He also represented the US Airways pilots in the merger with America West in 2005. In both of those cases, arbitrators decided how to blend the seniority lists.

"History tells us that no one wins in arbitration," Northwest ALPA's merger committee told pilots in a newsletter last month.