Includes Roadmap To Determine Seniority

It's a big step forward for the planned merger of Delta Air Lines and Northwest Airlines. On Monday, pilots at both carriers ratified a joint contract agreement that includes, among other items, a roadmap to determine seniority rankings at the merged airline.

"This historic milestone marks the first time that a labor agreement has been reached in advance of the close of an airline merger," said Lee Moak, chairman of the Delta chapter of the Air Line Pilots Association, to Reuters.

The agreement also represents a notable achievement when compared to the last US airline merger, the 2005 pairing of US Airways and America West. Pilots at those airlines are still working under separate contracts... and while there's little sign that situation will change any time soon, the airline did begin talks with the US Airline Pilots Association -- which replaced ALPA after that union was voted out -- in June.

Hoping to avoid similar strife down the line, officials at Delta and Northwest had tried for at least a tentative agreement on pilot pay before both sides declared their intentions to merge. Bickering over seniority rankings stalled merger talks in February; while the two airlines did ultimately agree to merge April 14, they did so with only the backing of Delta's 7,000 pilots.

Terms of the agreed-upon deal weren't disclosed, though officials have previously said pilots on both sides will receive pay raises and other benefits, including an equity stake in the new airline.

"It is far superior to the traditional well-worn labor role in that all pilots will receive financial returns from day one for the value we provide to the merger," Moak said. The contract likely represents a sharp increase in pay for Northwest's 5,000 pilots, to bring them inline with their Delta compatriots.

Less certain is how the two airlines will ultimately resolve pilot seniority, especially as Delta looks to possibly cut pilot jobs as part of its capacity reduction efforts. Delta and Northwest pilots did agree to a basic plan to handle the difficult task, however; they also agreed to arbitration, should negotiations fail.

Delta hopes to complete its acquisition of Northwest by the end of this year, assuming US regulators sign off on the merger. Officials in the European Union signed off on the proposal last week, saying the merged carrier poses little risk of stifling competition on trans-Atlantic routes.

FMI: www.delta.com, www.nwa.com, www.alpa.org