Delta/Northwest pilots resume merger discussions

WASHINGTON (Reuters) - Pilots at Northwest Airlines Corp NWA.N and Delta Air Lines Inc (DAL.N) revived discussions this week on resolving differences in merging their contracts, a step necessary for the carriers to proceed with a merger proposal.

A person familiar with the matter told Reuters on Wednesday the meetings have involved a handful of senior pilots and are not formal negotiations. It is unclear whether the group has made any progress.

Pilot unions, both affiliated with the Air Line Pilots Association (ALPA), would not say whether any new meetings had been held. The airlines' have refused to comment on union developments.

The development sent shares of both Northwest and Delta sharply higher before the close on the New York Stock Exchange and after hours.

Managements of Delta and Northwest approached the pilots last month to see if they could sort out union-related contractual issues before a deal was proposed to the companies' respective boards, shareholders and the government.

Pilots at both airlines have said there would be no merger without their cooperation and have been wrangling over how to combine seniority lists. Seniority is crucial for determining what planes and routes pilots fly and when they work.

Negotiations ended nearly two weeks ago without a deal, dousing expectations that the airlines would strike a quick merger agreement.

Delta executives said last week said the airline would not enter into a merger unless seniority issues were resolved and also said they would not be pushed into a deal.

Delta and Northwest shares shed their merger premium last week, but both rose sharply late on Wednesday on news of the revived prospects.

Delta ended regular trading up $1.19, or 9 percent, at $14.33. The shares gained another six cents after hours. Northwest rose $1.19, or 8.8 percent, to $14.69. Northwest gained another 26 cents after hours.

(Reporting by John Crawley; Editing by Andre Grenon)