Delta, Northwest seeking support for merger

"Thanks to antitrust immunity proposed last week by the U.S. Department of Transportation (DOT), we are confident we can quickly build a global partnership between Delta, Northwest, KLM and Air France," Air France-KLM said.

Air France-KLM's deputy chief executive, Pierre-Henri Gourgeon, said in February it could make an investment in a merged Delta-Northwest in exchange for shares.

But on Tuesday, the French-Dutch operator said that due to the "strong liquidity position" of the Delta-Northwest combination, there would be no need for a capital increase from Air France-KLM.

Delta CEO Anderson said a combined Delta-Northwest would have about $7 billion in liquidity and access to the capital markets.

REGULATORS

Delta's CEO also said he does not foresee any regulatory hurdles to the deal. Still, it is expected to get a thorough regulatory review to ensure it does not impede competition.

"The regulatory issue is going to be confined to the United States," Anderson said in an interview on CNBC Tuesday, referring to last week's Department of Transportation decision to grant Northwest antitrust immunity in coordinating schedules with its SkyTeam alliance partners, including Delta.

"In the United States we have not quite 20 percent market share," he said. "You still have many other carriers, including many discount carriers, that have free access to every market in the United States."

The Bush administration, seen as broadly friendly to airline mergers, gave no indication of an immediate objection to the Delta/Northwest deal.

"The Justice Department has the lead role in reviewing proposed airline mergers due to its primary jurisdiction over antitrust laws," White House spokesman Scott Stanzel said in a written statement, when asked for White House reaction to the proposed deal.

Delta shares fell about 14.2 percent to $8.99, while Northwest dropped 10 percent to $10.11, both on the New York Stock Exchange.

(Reporting by Mark McSherry and Bill Rigby; Additional reporting by Deborah Charles and Julie Vorman in Washington; editing by John Wallace/Jeffrey Benkoe)