Delta and Northwest pilot negotiators say they have a tentative agreement with Delta management on a joint contract to cover both pilot groups when the companies combine later this year.
Delta's pilots union said in a statement Tuesday that the agreement is between the two pilot groups and Delta management. Terms were not disclosed.
Next the two pilot groups will try to reach an agreement on a merged seniority list.
The joint contract agreement, which covers roughly 12,000 pilots from both airlines, still needs rank-and-file approval and to be reviewed by the governing bodies of the two unions. Both unions' executive committees were scheduled to meet separately later this week.
Delta pilots already have their own deal with management, including pay raises and equity in the combined company. That move angered Northwest pilots, who felt left out by their fellow members of the Air Line Pilots Association (ALPA).
Atlanta-based Delta Air Lines Inc. announced April 14 that it is acquiring Eagan, Minn.-based Northwest Airlines Corp. The stock-swap deal, if approved by shareholders and regulators, would create the world's largest airline.
Delta shares rose 26 cents, or 5.2 percent, to close at $5.26 on Tuesday, while Northwest shares rose 41 cents, or 7.4 percent, to close at $5.92.
Delta's pilots union called the tentative joint contract agreement "the first important step in the process of combining two pilot groups with long, proud histories, into the largest unified pilot group in the world."
It said in a statement that the process of review and ratification will occur as a separate and independent internal process within each pilot group.
Delta Chief Executive Richard Anderson said he was pleased with the agreement.
"Achieving a joint contract and combined seniority list in advance of the closing of the merger is something that has never been done in this industry," Anderson said.
He said the airline hopes an integrated seniority list can be achieved by the closing of the combination of Delta and Northwest.
Pilots value their seniority because it determines their schedule, the aircraft they fly, and layoff protection.
Northwest pilot union spokeswoman Doreen Clark said the goal of the negotiations was a joint contract "that enhances the careers of all pilots involved followed by a fair and equitable seniority list integration; in the end, it will be the line pilots who make the final decision."
Lee Moak, the head of Delta's pilots union, has said pilot negotiators from Delta and Northwest were able to reach an agreement on a joint contract before the combination transaction was announced in April, but that was not finalized because they couldn't reach a deal on seniority.
The airlines do not need a joint pilot contract to combine, but it will help them integrate faster and more smoothly. They are trying to avoid the fate of US Airways Group Inc. Three years after it joined with America West Airlines, its pilots feud got so bad that pilots ousted ALPA and formed a new union. They still do not have a contract covering pilots from both airlines.
Pilots are the only major unionized group at Delta, while Northwest's front-line workforce is heavily unionized. Northwest's other unions will continue to represent those workers under their old contracts until votes by the combined workforce determine whether those unions stay or go.