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Justice Department Approves Delta-Northwest Merger


On October 29, 2008, the Department of Justice's (DOJ) Antitrust Division announced that it was closing its six-month investigation on the proposed merger of Delta, the third largest U.S. airline, and Northwest, the fifth largest U.S. airline, after finding no antitrust objections. The DOJ stated that the proposed merger "is likely to produce substantial and credible efficiencies that will benefit U.S. consumers and is not likely to substantially lessen competition." Further, "[t]he two airlines currently compete with a number of other legacy and low cost airlines in the provision of scheduled air passenger service on the vast majority of nonstop and connecting routes where they compete with each others. In addition, the merger likely will result in efficiencies such as cost savings in airport operations, information technology, supply chain economics, and fleet optimization that will benefit consumers." Delta and Northwest had argued the deal would insulate the combined company from rising fuel costs that reached even the nation's biggest airlines. Justin Baer, Financial Times.

That same day, Delta Air Lines completed its $2.8 billion acquisition of Northwest to create the world's largest airline. The combined airline will keep Delta's name, Atlanta headquarters, and chief executive, Richard Anderson. News media speculated that a combined Delta-Northwest "may still pressure rivals such as United Airlines and American Airlines to pursue deals of their own" and that "the Delta-Northwest merger may serve as a template for other airlines." Financial Times.

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