Airlines Strike Deal Northwest Buys Stake In Continental Airlines

Northwest Airlines and Continental Airlines announced an alliance Monday that would join the route networks of the nation’s fourth- and fifth-biggest airlines, but Continental pilots are already threatening to make it a “marriage from hell” if their demands aren’t met.

Northwest is buying the stake in Continental now owned by Air Partners LP and its affiliates for $519 million in cash and Northwest stock. But Northwest will only have limited control over the stock’s 51 percent voting power.

Leaders of the Independent Association of Continental Pilots union, which is in contract negotiations with the carrier, are angry they weren’t told Continental also had been negotiating with Delta Air Lines.

In a Monday telephone conference with reporters, Len Nikolai, president of the union, said the union would disrupt a Northwest-Continental alliance unless they got a rich new contract.

“We’re going to have a say in what happens with any marriage, with any partner,” Nikolai said. “We can make it a smooth transition or we can make it a marriage from hell.”

Meanwhile, Northwest’s 51 percent voting share in Continental will be kept in a trust to preserve the spirit of the alliance, Northwest said. The trust will vote according to the recommendations of Continental management or in proportion to the rest of the Continental board except in an emergency situation, such as if there is a merger bid. In that case Northwest would vote the shares.

Announcement of the deal came following earlier reports Monday that Delta Air Lines and Northwest Airlines had made bids to take over Continental Airlines.

Delta President Leo F. Mullin confirmed Monday in a memo to employees that Delta had held discussions with Continental about a possible takeover, but the memo failed to say whether Delta was still interested in pursuing Continental.