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How Northwest 'Took Over' Delta

Updated from 1:44 p.m. EST

CHARLOTTE, N.C. -- It was said that Delta (DAL - Get Report) took over Northwest in October, but four months later it is reasonable to ask whether that is really what happened.

Officially, Delta acquired Northwest in a $2.8 billion stock swap. But after every merger, one company's culture predominates, while the other's seems to diminish in importance. In the case of the merger that created the world's biggest airline, the evidence abounds that the acquiree is in the captain's seat.

Start with the obvious, which is that Delta CEO Richard Anderson spent 14 years at Northwest, leaving as CEO in 2004. Furthermore, of Delta's top 10 officers, five, including Anderson, have worked at Northwest and one came last year from Continental (CAL - Get Report), where he worked with Anderson. Only four were at Delta prior to its 2005 bankruptcy.

In terms of cultures, Delta was always a Southern company, occasionally described in terms like "cordial," and "genteel" and, of course, lacking union representation except for its pilots and dispatchers.

By contrast, Northwest has long been considered the most aggressive of airlines, known for sometimes confrontational labor relations and for a fierce response to competitive intrusions. In the late 1990s, when AirTran (AAI) started to expand at its Atlanta hub, Delta seemed to look the other way, allowing AirTran to flourish. It is widely felt that Northwest would have used the weapons a hub airline possesses, such as scheduling, pricing, amenities and frequent flier loyalties to crush AirTran in its infancy.
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