Delta, Northwest Combining in Philly - TheStreet



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(DAL) - Get Report

will hit a major merger milestone on Monday night, when Delta and Northwest airport operations are merged at Philadelphia International Airport.

Philadelphia will become the 247th and last airport where the two carriers combine operations. The airport rebranding effort began at the San Juan, P.R., airport in November 2008, the month after the merger was approved by the U.S. Department of Justice. In Philadelphia, the timing reflects the move of Delta's ticketing and gate operations to Northwest's airport locations, which will occur overnight Monday and will be visible to passengers on Tuesday.

The changeover will closely follow another key milestone. On New Year's Eve, the Federal Aviation Administration approved Delta's application for a single operating certificate, enabling the carriers to integrate fleets and flight crews, so that pilots and flight attendants from either airline can work on any flight. FAA approval came 14 months after the merger closed.

"We accomplished the single operating certificate in record time and without negative impact to our daily operation," wrote Stephen Gorman, Delta executive vice president, in a letter to employees.

To secure the certificate, Delta integrated 385 manuals and 100 operating specifications, programs and processes at each airline. In addition, Gorman said more than 85% of Northwest's 260 mainline aircraft have been painted in Delta colors. The airlines combined their frequent flier programs in October.

Late Tuesday, the National Mediation Board said it has scheduled the first post-merger Delta election involving the International Association of Machinists. About 100 flight simulator technicians will vote next month on whether the group will remain in the IAM. Votes will be tabulated Feb. 25. Other elections involving larger groups are expected later in the year: The IAM represents 12,500 Northwest employees including fleet service and customer service workers.

On Wednesday, Moody's underscored the significance of the single operating certificate, saying it had withdrawn ratings on Northwest liabilities and obligations following the Dec. 31 "legal merger" between the two carriers. "As the surviving entity, Delta has become the legal obligor," Moody's said.

Several steps remain for Delta. During the current quarter, all tickets and fares will be consolidated into the Delta reservation system, and the Web site will disappear.

Reservations system integration posed a major problem in the most recently completed airline merger, which combined

US Airways


with America West. In the transition month of March 2007, the combined airline's on-time performance sank to 55.5%, the result of a schedule meltdown that included thousands of flight delays and cancellations. Its impact kept US Airways at the bottom of the DOT's performance measure for most of 2007: on-time performance recovered to 78.3% in March 2008.

-- Written by Ted Reed in Charlotte, N.C.