April 16, 2008

Northwest Airlines and Delta Air Lines are merging, ending many weeks' speculation on the subject. A joint statement released by the two legacy carriers cited reasons for the merger, including the sharply rising price of oil, which has almost doubled since the start of 2007, as well as increased competition from European airlines in the wake of the U.S.-EU Air Transport Agreement (Open Skies), which permits any European air carrier to fly between any point in Europe and America. If approved by the U.S. federal government and shareholders of both companies, the combined carrier will be called Delta, serving 390 destinations in 67 countries. Northwest stockholders are being offered 1.25 shares of Delta stock for each share of Northwest stock they hold. No airline hubs of either pre-merger company will be closed. At the new firm's helm will be current Delta CEO Richard Anderson. The new company's world headquarters will be in Atlanta, with executive offices in Minneapolis/St. Paul, New York City, Amsterdam, Paris and Tokyo.

British Airways has postponed the move of its long-haul flights operations to the new Terminal 5 at London's Heathrow Airport from April 30 until June. In a statement posted on BA's website, CEO Willy Walsh said Terminal 5 is now "working well" after a troubled start but added the airline "needs to have confidence that good service can be maintained when the terminal is handling larger numbers of customers." In the first few weeks at the $8.6 billion terminal, British Airways had to cancel hundreds of flights. When the facility opened on March 27, the baggage-routing system failed, creating havoc for the carrier and its customers. The postponement also will affect airlines such as Air France-KLM, BMI, Continental and Delta, which plan to move into the space in Terminal 4 once BA moves out.

Averting a potential crisis for some air travelers, the U.S. Department of Homeland Security will give states extra time to comply with new security standards for driver's licenses and other identification cards, allowing citizens from noncompliant states to continue using their IDs to board domestic flights. The REAL ID Act of 2005 originally set a May 11, 2008, deadline for states to meet the standards, after which time citizens with substandard ID cards would be barred from any commercial airplane unless they presented some other acceptable form of identification, such as a passport. Extensions have been granted until Dec. 31, 2009. At the moment, no state issues IDs compliant with the new standards.