Delta & Northwest Agree on Merger
Delta & Northwest have agreed for a merger creating the world’s biggest airlines subject to regulatory approvals & shareholders. The increasing fuel prices & rising inflation world over have put a dent on the profit margins of the airlines & hence there is consolidation among the airlines industries. Northwest is buying Delta for $3 billion. They have a fleet strenght of 800 & the combined entity is valued at $11.2 billion. Airlines are increasingly finding the global economic turmoil difficult to manage. Even in the Indian airspace Kingfisher took a stake in the Air Deccan. Small airlines with no frills service are proving to be a big competitor for the big airlines & they are thinking of cutting down the costs.