U.S. Approves Delta Takeover of Western Air

The Department of Transportation granted final approval Thursday to Delta Airlines’ $860-million acquisition of Los Angeles-based Western Airlines, a decision that will soon lead to creation of the nation’s fourth-largest carrier.

The department said in its decision that the proposed merger “would not substantially reduce competition in any market.” The two carriers compete directly on only nine routes.

Delta, based in Atlanta, expressed “delight” at the action and said it plans to complete the acquisition as fast as possible after shareholder approval.

Reagan Role Involved

Since international routes are involved, the transaction must still be approved by President Reagan, who has 60 days either to disallow it or to give it approval by doing nothing.

Shareholders of both companies will meet to ratify the deal next Tuesday, after which Western will be operated as a wholly owned Delta subsidiary. A Delta spokesman said that Western, the nation’s oldest air carrier, will be merged into Delta by early next April

“The name Western will fade into a glorious history,” James Ewing of Delta said.

“We regard Western as Delta’s best-fitting and most natural merger partner,” said airline analyst Louis Marckesano of the Philadelphia brokerage house of Janney Montgomery Scott.

Fills Voids, Provides Hubs

Western will fill geographic voids in Delta’s route network and will strengthen Delta’s presence in areas where it has had only fringe penetration. It also provides Delta with two major hubs in the West--Salt Lake City and Los Angeles--which will help it attract passengers to its traditional route system, mainly in the East and Southeast. The combined new Delta will have 341 planes and will serve 163 airports in the United States and abroad.

Had the two airlines been combined during 1986, their combined share of the U.S. passenger market would have been 11.9%. In terms of revenue passenger miles (one paying customer carried for one mile) the newly combined airline will trail only Texas Air (which owns Eastern, Continental, New York Air and is buying People Express), United Airlines and American Airlines among U.S. carriers.

The Transportation Department in October gave preliminary approval to the merger, which has also received the endorsement of the Justice Department.