June 25, 2008 4:44 PM

Wachtell Helps Resolve Complex Delta-Northwest Pilots' Agreement

Posted by Zach Lowe

When Delta Air Lines and Northwest Airlines announced plans to merge in the spring, the main obstacle in the way of a happy marriage appeared to be how the new mega-airline would integrate a combined 12,000 pilots from the two companies. Delta pilots tend to make more money, but they are younger than their Northwest counterparts because many older Delta pilots retired as the airline restructured last year, according to this piece in the Atlanta Journal-Constitution.

The two pilots groups failed to complete a seniority agreement before the merger, but Delta and Northwest went ahead with the deal anyway. Delta pilots then struck their own deal with their parent company, leaving Northwest pilots on their own.

This left quite a mess for lawyers to clean up heading into the merger, which should close by the end of the fourth quarter. The Airline Pilots Association relied on in-house counsel, while Delta managers hired Wachtell, Lipton, Rosen & Katz to negotiate with the Northwest pilots and nudge the unions toward a seniority deal, according to spokeswomen for the union and the firm.

Those talks apparently paid off after round-the-clock sessions that started last Monday, according to a union statement. The combined parent company reached a joint contract with pilots from both airlines that apparently mirrors their original deal with the Delta pilots, according to the Atlanta J-C story and a joint statement released this morning.

The new deal will create salary parity between the pilots groups, according to the story. It also sets up a framework to determine seniority within the combined pilot ranks.

Partners Stephanie Seligman and Lawrence Makow led the Wachtell team. Neither returned calls or e-mails seeking comment. The airline pilots union has instructed its in-house lawyers not to talk to the media, the union says.

Delta chief executive officer Richard Anderson called the contract unprecedented in the airline industry.

"Achieving a joint contract and a combined seniority list in advance of the closing of the merger is something that has never been done in this industry," he said in a statement.

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