The merger frenzy swirling through the airline industry is sending the personal net worth of two of L.A.'s richest residents into higher air space, and their windfall could go higher in the months ahead.

Former Walt Disney Co. executive Gary Wilson and former gubernatorial candidate Alfred A. Checchi, controlling shareholders of Northwest Airlines Corp., have seen their net worth jump on news that AMR Corp., the parent of American Airlines, has held discussions about possibly acquiring Northwest.

Growing speculation about a buyout has sent Northwest's stock price up steadily since it hit a low of $16.13 a share in March. By the June 8 close, the share price had more than doubled to $32.38.

Wilson, according the Northwest's latest proxy statement, holds 17.2 million common shares, or 20.3 percent of the company. That makes his holdings worth about $557 million.

Checchi isn't doing too badly, either. With 11.4 million shares, or 13.5 percent of the airline, his stake is now worth more than $369 million.

Each of the men, who were unavailable for comment last week, reportedly initially invested between $10 million and $12 million in Northwest.

Any ultimate buyout of Northwest would likely be transacted at a price considerably higher than Northwest's current market value, industry observers said.

"They will make a lot of money," said Robert Milmore, an airline analyst at New York-based Arnhold & Bleichroeder. "They will want the most they can get for the airline. Right now, they're in the catbird's seat."

The recent run-up in Northwest's stock price accelerated after UAL Corp., parent of United Airlines, agreed to buy US Airways Group Inc. That deal, which is still subject to shareholder and regulatory approval, created immediate pressure for other major U.S. carrier to get bigger fast.

Suddenly, AMR was reported to be in merger talks with Delta Air Lines, in addition to Northwest. Swiss Air won approval to buy a majority interest in Belgium's Sabena Airlines, and KLM Royal Dutch Airlines was said to be talking to British Airways about a merger.

Still, while Wilson and Checchi may be holding a hot hand in this international game of airline poker, their optimal time to parachute out with the cash may have passed. Many stock analysts doubt that a takeover of Northwest would be approved due to federal antitrust concerns. In addition, the stock market seems to be cooling to the deal, and Northwest shares have dropped after an initial jump on news of the possible merger with American.

"The chances (of the merger) are not high from an antitrust point of view," said Jon Kutler, an aerospace specialist at Los Angeles-based Quarterdeck Investment Partners Inc.

Kutler and others said the mood in Washington, D.C., is not favorable for mergers, especially after a federal judge ordered Microsoft Corp. to be broken up. Further complicating American's buyout of Northwest is United's bid for US Air, which has yet to be approved.

If United's bid is OK'd, it would pave the way for American and Northwest. If it isn't, it would crush the deal.

The Justice Department filed a lawsuit against American Airlines in 1999, accusing the carrier of "predatory and monopolistic" practices at its Dallas hub. The company allegedly slashed its fares to destroy low-cost start-up airlines.Then, when they folded, raised its rates back to the old levels.

"I am beginning to doubt there will be massive industry consolidation at this time," said New York-based airline specialist Raymond F. Neidl with ING Barings.

Moreover, analysts say that while the airline industry has been highly profitable lately, the carriers have not put much money back into raising the quality of their service, and passenger complaints are at an all-time high.

Northwest's value has fluctuated over the years, especially when the airline was plagued by labor troubles in 1998. Even so, Niedl said, Wilson and Checchi remain in a good financial position even if the American deal falls through.

"They like running the airline," he said. "I think they feel they can improve operating results if they hold onto Northwest. But every company has a price (at which the owners are willing to sell out)."

In the mid-1980s, Northwest had a terrible reputation within the airline industry and was dubbed "Northworst." Wilson and Checchi were part of a group that undertook a leveraged buyout of Northwest in 1989 for $3.65 billion. Among the investors was KLM.

Soon after the takeover, the airline industry tanked, almost bringing down Northwest, thanks in part to the high prices of oil during the Gulf War. To save Northwest, Checchi pushed the unions to take pay cuts. He ultimately extracted $833 million in union concessions.

In 1997, he stepped down from the co-chairmanship of Northwest to run for governor of California. Despite spending $40 million of his own money, he lost to Gray Davis in the Democratic primary.

Wilson, a former chief financial officer at Disney, is credited with coming up with the idea of forming alliances between airlines to generate higher revenues. Under such alliances, which are now pervasive in the industry, airlines share flight codes. Northwest's alliance with KLM enabled it to expand nationally and internationally. Wilson is also credited with restructuring the internal operations of the airline.

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