Tuesday, April 15, 2008

Delta, Northwest deal fails to thrill investors and unions

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Investors panned Delta's long-in-the-works deal with Northwest, sending shares of both companies down sharply on Tuesday on disappointment that the deal may not yield as much in cost savings or higher revenue as Wall Street expected.

If Delta and Northwest are going to complete their combination to create the world's largest airline, they'll also have politicians to placate, antitrust regulators to convince and unions to cajole.

Two of Northwest's largest unions immediately declared their opposition to the deal, announced late Monday after several months of talks.

And investors showed their disapproval after the carriers said they have no current plans to cut more U.S. flights beyond what they have disclosed separately — something analysts see as limiting the cost savings or higher fares the airlines could reap from the deal.


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