Delta Airlines open RP Branch

Finalized consolidation of its Northwest subsidiary
January 12, 2010

Manila- Atlanta-based Delta Air Lines, Inc. has recently set up shop in the Philippines as it consolidates its foothold in the country after acquiring Northwest Airlines for $2.8 billion in stock share swap in October 2008 to become the world's biggest airline.

The Philippine's Securities and Exchange Commission (SEC) has allowed the biggest airline in the world to transact business and to establish a branch in the Philippines with office address at the 10th floor of Philamlife Tower in Makati City. The office will be engaged in “international air transportation services.”

The airline's Philippine office has an initial capital of USD $200,000 equivalent to 9.4 million pesos, consisting of 1.5 billion common shares and 500,000 preferred share at a par value of $0.0001 apiece.

Delta plans to fully integrate the operations of Northwest Manila office in Delta within the first quarter of this year after it received government permission (US FAA Certification) to operate its namesake service and its Northwest Airlines subsidiary as a single carrier, a Delta executive said.

More than 80 percent of pre-merger Northwest aircraft have already been painted over with the Delta livery. Employees of Delta and Northwest are already wearing the same uniforms, and the two carriers' frequent-flier programs have also been combined under the Delta SkyMiles brand.

"Initially, the two carriers have been kept separate while Delta sought the FAA certificate" says Richard Anderson, Delta chief executive.

The single operating certificate from the Federal Aviation Administration allows Delta to put its code on Northwest flights and phase out the Northwest name. That process will be completed in the first quarter. For now, travelers won't notice anything different.

“The airline industry faces a very difficult economic environment around the world and this merger gives Delta increased flexibility to adapt to the economic challenges ahead,” Anderson said in a statement.

Delta plans to operate Northwest-coded flights until all seats and fares are consolidated in Delta's reservations system. Once that occurs, it will remove the distinction for passengers of purchasing on Delta or Northwest, and the Northwest Web site will be folded into Delta's.

The merger is expected to give Delta Air Lines $2 billion in annual revenue and a more comprehensive and diversified route system. It already operates an extensive domestic and international network that has a flight to every continent except Antarctica.

It has massive hubs in Amsterdam, Cincinnati, Detroit, Memphis, Minneapolis-Saint Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita.