Delta Air Lines has completed its $2.8 billion deal to acquire Northwest Airlines, creating the world’s biggest carrier.
The announcement late Wednesday marked a swift conclusion to the deal. Earlier in the day, the Justice Department granted antitrust approval, and a lawyer for 28 air travelers who had sued to block the deal said the parties had settled the case.
The new Delta will be headquartered in Atlanta, and Delta chief Richard Anderson will head the combined carrier, which will integrate over the next 18 months.
Federal regulators wrote in a statement that "the proposed merger between Delta and Northwest is likely to produce substantial and credible efficiencies that will benefit U.S. consumers and is not likely to substantially lessen competition."
It noted that they already compete with other carriers on most of the routes where they currently compete with each other. The Justice Department also said consumers should benefit from savings on expenses for airport operations, technology, and suppliers. The companies have said they can cut $2 billion a year in expenses once they combine.
When Delta and Northwest announced their deal in April, it was widely thought that they were looking to get approval before a new president took office.
Kevin Mitchell, chairman of the Business Travel Coalition, said approval of the merger will mean higher fares and fewer connections between mid-size cities and business centers. He said he was concerned about an enlarged Delta and other possible airline combinations and joint ventures.
"A first priority of the new administration should be to reconsider the rationale behind antitrust-immunized alliances and the market power they can exercise to the detriment of consumers," he said.
Mitchell testified before Congress in April in opposition to airline mergers.