United
States Securities and Exchange Commission
Washington,
D.C. 20549
Notice
of
Exempt Solicitation
1.
Name
of Registrant:
Delta
Air
Lines, Inc.
2.
Name
of person relying on exemption:
International
Association of Machinists and Aerospace Workers
3.
Address of person relying on Exemption:
9000
Machinists Place
Upper
Marlboro, MD 20772
4.
Written Materials:
Attached
are written materials, consisting of a letter to certain shareholders of Delta
Air Lines, Inc., submitted pursuant to Rule 14a-6(g) promulgated under the
Securities Exchange Act of 1934.
September
10, 2008
IMPORTANT
PROXY VOTING MATERIAL
Delta
Air
Lines, Inc. (NYSE)
Special
Meeting Date: September 25, 2008
Dear
Delta Air Lines Shareholder:
On
behalf
of the International Association of Machinists and Aerospace Workers (IAMAW),
I
am writing to once again voice our opposition to the proposed merger between
Delta Air Lines, Inc. and Northwest Airlines Corp. We believe that this proposed
merger exposes the Company to significant risk and harm to long-term shareholder
value.
We
strongly urge shareholders to VOTE
AGAINST
the merger-proposal number 1.
The
past
several months have brought a frenzy of pro-merger lobbying by both carriers.
In
spite of this extensive lobbying campaign, a steady chorus of influential
analysts continue to express their view that this merger overstates its positive
synergies and could threaten the existence of both carriers:
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“Airline
mergers have a checkered track record, rarely delivering on expected
gains
and usually creating labor unrest and service disruption.” Philip
Baggaley, Managing Director of Standard & Poor’s Ratings Services.
1
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“Efficiencies
are easy to assert, difficult to achieve, and rarely of the magnitude
that
their parties -- in their self interest -- claim.” Albert Foer, American
Antitrust Institute. 2
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“Delta/Northwest
and other Mega mergers cannot be justified by synergies and improved
efficiencies.” Hubert Horan, Industry Analyst. 3
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“There
are amalgamations that make economic and public policy sense but,
as I
shall demonstrate, this is not one of them.” Aaron Gellman, Northwestern
University. 4
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__________________
1
Written testimony of Philip Baggaley at House Subcommittee on Aviation hearing,
“Impact of Consolidation on the Aviation Industry, with Focus on the Proposed
Merger Between Delta Air Lines and Northwest Airlines.” May 14, 2008.
1
Written testimony of Albert Foer at the May 14, 2008 House Subcommittee on
Aviation hearing.
1
Written
testimony of Hubert Horan at the May 14, 2008 House Subcommittee on Aviation
hearing.
1 Written
testimony of Aaron Gellman at the May 14, 2008 House Subcommittee on Aviation
hearing.
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The
Delta
and Northwest frozen pension plans currently have a combined shortfall of $7
billion. Such a massive, underfunded liability would be an enormous burden
on the merged airline. Historically, airlines that have shed their pension
obligations have done so in bankruptcy, destroying shareholder value.
The
combined company will be unable to successfully integrate the businesses
of
Delta and Northwest.
The
combined company will be required to devote significant resources to integrating
its operations and business practices while encountering numerous risks in
the
integration process. We believe that the risk exposure outweighs the potential
benefits of the merger. Some of these risks include:
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Complexities
associated with managing the combined businesses, including the
challenge
of integrating complex systems, technology, aircraft fleets, networks
and
other assets of the companies in a seamless manner that minimizes
adverse
impact on customers, suppliers, employees and other constituencies;
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Integrating
the workforces and corporate cultures of the two airlines;
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Potential
unknown liabilities and unforeseen increased expenses or delays
associated
with the merger, including one-time cash costs to integrate the
two
airlines that may exceed the approximately $600 million total that
Delta
management currently anticipates; and
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Mergers
or other strategic alliances of other air carriers could be quickly
announced as a response to this merger, changing the competitive
landscape
in which the combined company will operate.
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The
integration of the workforces of the two airlines will require the resolution
of
important issues relating to the union representation of various work groups
and
the relative seniority of the work groups at each carrier. Delays, expenses
and
other challenges to integrating the workforces could have a significant
impact
on the expected synergies from the combination of Delta and Northwest and
could
affect the financial performance of the combined company.
Delta
and
Northwest have failed to provide shareholders with a convincing argument
that
consolidation would increase shareholder value. For this reason, as well
as for
the concerns I have mentioned above, I urge shareholders of Delta to protect
their interests, speak out to oppose this proposed merger, and vote NO
on
proposal number 1.
This
is not a proxy solicitation. Please DO NOT send your proxy card to the
IAMAW.
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