Delta, Northwest still wait for Justice approval

Delta Air Lines said Thursday it expects soon to get feedback from the U.S. Department of Justice on the carrier’s proposed merger with Northwest Airlines.

Atlanta-based Delta and Eagan, Minn.-based Northwest still hope to close the deal by the end of the year. Shareholders will vote at meetings Sept. 25 and Justice Department approval is still needed.

Delta president and chief financial officer Ed Bastian said during a presentation at an investor conference Thursday that Delta expects to get an analysis from the Justice Department, before a final ruling later this year.

“We have hit all milestones that were agreed upon,” Bastian said. “We do expect not only to get their analysis back but also their findings here very shortly.” Northwest chief financial officer David Davis said during a presentation Thursday, “We hope to start hearing stuff from the Justice Department sort of in the October-November time frame.”

Delta also is awaiting approval from the Federal Aviation Administration for a plan to pursue a single operating certificate for the combined carrier.

“We have had a team that has been working on this,” said FAA spokeswoman Kathleen Bergen.

Approval would allow Delta to proceed with an integration plan, which is expected to take up to a year and a half to complete after the merger is approved.

It involves the combining of information technology systems, flight operations computer systems and policies and procedures for airport, maintenance and on-board operations. A single reservations system and Web site are planned for roughly the first quarter of 2010. Resolving labor representation between the heavily-unionized Northwest and the mostly non-union Delta is expected to take about a year.

Delta does plan to fully extend its code-share marketing agreement with Northwest on the first day of the merged company. The airline has named 65 officers for the airline after the merger. There are about 85 officers currently at the two airlines.

Delta also said Thursday it expects to end the year with $3.1 billion in liquidity, down from its previous projection of $3.2 billion, as it takes a hit from high fuel costs. Combined, Delta and Northwest had earlier expected to end the year with about $7 billion, but the two carriers are now likely to have closer to $6 billion at year’s end plus a $500 million revolving credit line that Northwest is finalizing.

Bastian expects Delta to post double-digit growth in unit revenue and report break-even results or a “modest loss” this quarter.