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Delta & Northwest Agree To Merger

(CN) - Delta and Northwest air lines agreed to merge on Monday, a $3.1 billion deal that would create the world's biggest airline. The deal is expected to lead to labor problems with pilots.

Northwest pilots said almost immediately that they opposed the deal. Pilots' ranks would be combined - and almost certainly reduced - in the merger.

Northwest shareholders would receive 1.25 Delta shares for each Northwest share. The new airline - to be called Delta - would have seven board members from Delta and five from Northwest. The Air Line Pilots Association would get one seat on the board.

The two airlines employed a total of 89,000 people in December 2007. Delta said the new airline would employ 75,000. Delta has 6,300 pilots and Northwest 4,500.

The merger must be approved by shareholders and the Justice Department. Observers said that another merger may follow - between Continental and United - as the industry tries to consolidate under review of the lenient Bush administration before a new administration takes office.

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