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Northwest May Merge, Scale Back : Airlines: Top officers told pilots that the sale of lucrative Pacific routes is a possibility.

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From Associated Press

Northwest Airlines Chairman Alfred Checchi has broached the idea of merging with a stronger airline or selling the carrier’s lucrative Pacific routes in talks with Northwest’s pilots’ union, it was reported today.

The Air Line Pilots Assn. said Checchi discussed a possible merger with American Airlines or Delta Air Lines as a possible solution to Northwest’s financial troubles, the Wall Street Journal reported.

As another solution, the union said, Checchi explored the idea of selling the Pacific routes as a step toward retrenching the carrier as a solely domestic airline, the newspaper reported.

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Checchi’s comments about a possible merger or a Pacific route sale came early last week when he and John Dasburg, the airline’s president and chief executive officer, met with the pilots’ union to seek contract concessions, the report said.

The union disclosed discussions of the options in a three-page letter it released Friday to its 5,600 members.

“To even broach the subject (of a possible merger or route sale) is unusual,” said Andy Murphy, a pilots’ union official for Northwest who attended the meeting at which the alternatives were discussed.

Northwest reported Friday that the privately held company lost $121 million in the fourth quarter. Its parent company, NWA Inc., lost $302 million for the year.

The limited earnings report, which is to be filed with the U.S. Department of Transportation, said the airline’s fourth-quarter loss contrasted to a $116-million profit in the same period in 1989.

In its letter, the pilots’ union called a Pacific route sale “totally unacceptable.” Although Northwest recently cut about 15% of its service there because of a reduction in traffic since the start of the Persian Gulf War, those routes have been a source of consistent profits for the airline.

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Murphy said the Northwest executives did not indicate whether they were talking to American, Delta or any possible buyers of the Pacific routes.

In October, the company had tried unsuccessfully to convince its unions to accept a six-month 10% wage cut.

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