Delta Names Richard Anderson As CEO
Tuesday, August 21, 2007; 10:21 PM
ATLANTA -- Delta Air Lines Inc. fought hard during bankruptcy to avoid being taken over by another carrier. Less than four months after exiting Chapter 11, it reignited speculation Tuesday about a future merger by naming former Northwest Airlines Corp. CEO Richard Anderson as its next chief executive.
Anderson, currently a board member at Atlanta-based Delta and an executive at UnitedHealth Group Inc., will replace Gerald Grinstein on Sept. 1. Grinstein, 75, who had said he would leave Delta once his successor was named, will retire from Delta and from its board.
The appointment of Anderson, 52, answers one pressing question but also raises others, particularly about future consolidation.
"Clearly having Anderson named would raise that speculation," said Philip Baggaley, an analyst at Standard & Poor's. "I don't think it necessarily draws any direct link, but it clearly will raise that thought."
The change at the top at Delta follows the airline's 19 1/2-month reorganization under bankruptcy protection. Delta entered Chapter 11 on Sept. 14, 2005, and emerged on April 30.
In bankruptcy, Delta shed billions in costs and restructured the carrier's operations. It also survived a hostile takeover bid by Tempe, Ariz.-based US Airways Group Inc.
Baggaley said the specter of a possible merger between Delta and another airline did not die with Delta's emergence from bankruptcy as a standalone carrier.
"When the new board of directors was composed, the unsecured creditors gained a much larger voice as the new shareholders of the company, and part of the implicit understanding perhaps for their support in defeating the takeover bid by US Airways was the future board would be open to the possibility of mergers if that appeared to be an attractive opportunity," Baggaley said.
Delta executives, faced with questions about a post-bankruptcy valuation below what they initially projected and below what US Airways offered for Delta, have declined to speculate about whether the airline would consider a deal with another carrier to increase shareholder value.
Anderson told reporters Tuesday that in the long run the airline industry might see some consolidation, but that is not Delta's focus right now.
As for a linkup with Eagan, Minn.-based Northwest, Anderson said, "There is no plans or intentions or previously agreed to plans to merge them."
Besides the consolidation issue, the Anderson appointment also raises questions about Chief Operating Officer James Whitehurst's future with the airline. He had been one of two top internal candidates to replace Grinstein.