Pilots clear way for Northwest-Delta deal - report

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NEW YORK (CNNMoney.com) -- Leaders of the union representing pilots at Northwest Airlines Corp. and Delta Air Lines Inc. have reached an agreement on uniting membership under a merged carrier, the Detroit News reported Tuesday.

The plan will be presented Wednesday at a scheduled meeting of Delta's board in New York, the newspaper said, citing sources close to the matter.

The agreement helps clear the way for Delta (DAL, Fortune 500) and Northwest (NWA, Fortune 500) to merge, the report said. A deal between the two airlines would create the nation's largest carrier.

An announcement was expected late last week, but was delayed by discussions between pilots union chapters, the paper reported.

Terms of the agreement include a plan for aligning the seniority lists of the more than 11,000 pilots at Delta and Northwest, a voting seat on the board of a new carrier and a 7 percent equity stake in the combined company, according to the News.

Delta and Northwest face the industry-wide epidemic of high fuel prices and overcapacity and have reportedly been in merger talks.

Just last week, Northwest chief Doug Steenland told employees that consolidation is "highly likely at some point" and said that doing nothing "could be our worst alternative."