US Air Goes After Delta

To facilitate the merger, Citigroup has agreed to provide a $7.2 billion financing package. That would be used to refinance Delta's debtor-in-possession credit facility, to refinance US Airways' existing senior secured facility with GE Capital, and to provide the funding for the $4 billion cash portion of the offer.

While US Airways would seek expense reductions in most areas, Parker said the carrier "would take labor costs to the highest common denominator in all groups," creating "a negative synergy" of $90 million. In an interview, Kirby said the number is based on the assumption that all of the unions on the property at US Airways would also represent workers at Delta, which has traditionally been nonunion except for its pilots.

A major beneficiary would be the International Association of Machinists, which represents mechanics and fleet service workers at US Airways. In a prepared statement, IAM General Vice President Robert Roach said that Parker had contacted him and "indicated a desire to work with the machinists' union."

Roach said that before it could conclude a successful merger, US Airways would have to wrap up ongoing talks with the IAM regarding the integration of America West and US Airways employees.

The combined airlines would theoretically operate a series of hubs and focus cities that initially appear to have overlapping missions. Delta's Atlanta operation and US Airways' Charlotte base are the two principal Southeast hubs. US Airways has a hub in Philadelphia and a strong presence at New York's La Guardia, while Delta has a hub at New York Kennedy and a solid position at La Guardia.