Delta, Northwest reportedly near deal

Delta and Northwest could announce a combination as early as Tuesday that would create the world’s biggest airline, three people familiar with the talks said Sunday, though pilot contract issues still loomed and there was no guarantee the deal would move ahead.

The people, who spoke on condition of anonymity because of the sensitivity of the situation, said officials were mobilizing for an announcement provided the boards of the two companies give final approval to a deal.

The boards of both companies have been having ongoing merger-related conversations. They could meet today to discuss moving ahead with a deal, a person familiar with the talks said.

It was increasingly likely the two airlines would proceed without a prearranged seniority integration agreement between their pilot unions, so the main issue that remained was whether Delta pilots were willing to make changes to their contract to give Delta more flexibility after a combination, one of the people said.

Delta may be willing to give incentives to Delta pilots to make changes to their contract, another person familiar with the talks said.

The changes being sought are related to a section in the Delta pilot contract that in part spells out what planes and routes pilots fly, people familiar with the talks said.

Any changes to the contract, including financial incentives, would apply only to Delta pilots. Northwest pilots have a separate contract.

A memo sent Friday from Delta’s pilot union to its members said union leaders were meeting in special session in Atlanta. It didn’t say what they were discussing. That meeting continued Sunday, people familiar with the talks said.

Northwest pilot union leaders were meeting separately Sunday in Minnesota. Their meeting was described mainly as informational.