Delta taps ex-Northwest chief as CEO

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. Chief Executive Richard Anderson as its next CEO.

Anderson, currently a member of the board of 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 question but raises others, particularly about future consolidation.

“Clearly, having Anderson named would raise that speculation,” said Philip Baggaley, an analyst at Standard & Poor’s.

The change at the top at Delta follows the airline’s 19 1/2 -month reorganization under bankruptcy protection.

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 merger between Delta and another airline did not die with Delta’s emergence from bankruptcy as a stand-alone 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 on whether the airline would consider a deal with another carrier to boost shareholder value.

Anderson said Tuesday that in the long run the airline industry might see some consolidation, but that that was not Delta’s focus right now.

As for a linkup with Eagan, Minn.-based Northwest, Anderson said, “There are 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.

Anderson declined to speculate about Whitehurst’s future with the airline. Grinstein said Anderson would be reviewing responsibilities, roles and functions with senior managers.

“That conversation has yet to take place with Jim,” Grinstein said.

The other top internal candidate to replace Grinstein was Chief Financial Officer Ed Bastian. Delta said Tuesday that Bastian would be adding the title of president to his duties.

Asked whether he was disappointed in not getting the top job, Bastian said only that he was looking forward to working with Anderson.