Northwest and American: Is It Love? - TheStreet

St. Paul, Minn., television station


reported Thursday night that

Northwest Airlines


CEO John Dasburg and Don Carty, Chairman and CEO of



, parent of

American Airlines

, have "been in contact about a possible merger."

Ho hum.

You know, maybe we need to start doing this: Every day next week, we'll just publish a new statement. Monday, it will be, "

America West


Chairman Bill Franke and

United Air Line's

holding company


(UAL) - Get Report

CEO Jim Goodwin have discussed a possible merger."

Tuesday, we'll announce that



CEO Bill Compton and Bill Franke have also "discussed a possible merger."

You get the drift.

Actually, aside from just waving a white flag and conceding the airline world to United, we would be more shocked if someone had reported that American was


talking to Northwest, as we discussed here

last week.

What makes Northwest a potential partner for American? Northwest has those very lucrative Pacific routes, in addition to the rights to even more potentially lucrative Pacific routes that it is not even using. It has nice big 747 aircraft that American does not have. If United swings the

US Airways

(U) - Get Report

deal, then a Northwest deal would also give American much needed leverage in the Midwest, as it would gain Detroit, Memphis and Minneapolis as hubs.

But, the East Coast would still, for all practical purposes, be wrapped up in the friendly skies of United.

Unless -- and here is another one that you need to watch, especially if American decides to plunk down an offer for Northwest --

Midway Airlines


gets gobbled up as well. Midway, the oft-rumored on-again, off-again paramour of American, has seen its stock take a healthy bounce since the United/US Airways merger announcement

last week. Think strategically and it should be apparent why this is the case.

Midway would be the fastest way for an American/Northwest combo to gain a toehold in the Southeast.

As for the talks between Northwest and American, our moles tell us that the two are not that close to announcing a deal, but that it looks like a bid of $54 a share for Northwest might be in the ball park.

Finally, in terms of who said what to whom and when, we always like it when the big kahunas verify what we have been hearing for months.

We found a gem while perusing a very detailed summary of this week's United Air Line Pilots Association Master Executive Council meeting, which included a full presentation of the proposed United/US Airways deal by United management.

In the session with the pilots, United's Goodwin said that American had also been talking to US Airways, and that United felt it had to make a move now -- because it was clear that American was once again "interested" in a possible deal.

Always nice to get confirmation from the top.

Goodwin's other gem was his statement to the pilots that he had wanted to secure a guarantee of seniority for United pilots as part of the deal. However, Goodwin told the pilots, US Airways' Chairman Stephen Wolf did not want any part of the deal to be contingent on any labor negotiations.

Well, that is fine and good, but as one United pilot wrote to us, "It is going to be United Airlines, right? Not United Airways."

This apparent concession to Wolf on the seniority issue could come back to make life very difficult as United management tries to swing the deal with the most powerful union at the airline.

Holly Hegeman, based in Barrington, Rhode Island, pilots the Wing Tips column for At time of publication, Hegeman held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. You can usually find Hegeman, publisher of PlaneBusiness Banter, buzzing around her airline industry Web site at While she cannot provide investment advice or recommendations, she welcomes your feedback at