A month ago, a deal left for dead; what changed?

Delta Air Line's acquisition of Eagan-based Northwest Airlines comes as little surprise to those who have followed their long courtship. But just a month ago, the deal appeared to be dead. The pilots for the two airlines couldn't agree on how to combine their seniority lists.

Analysts and airline executives have tossed around a lot of reasons why Delta had to acquire Northwest. Many experts say the deal would more easily win approval under the administration of President Bush than his successor's.

But analysts also frequently argue the cost of fuel is what really pushed the two airlines together. Both carriers were banking on crude oil running between $60-$70 a barrel. It has recently shot past $110 a barrel.

Delta President and Chief Financial Officer Ed Bastian said in a conference call today that the companies expect fuel prices not to just stay at the already high levels but to spike further.

"It was one of the driving reasons why we're doing this," he said. "Both carriers in their individual stand alone plans didn't have the strength that the combined carrier will have to drive revenue synergies, the cost efficiencies, to counteract the rise in fuel. So we think that fuel prices are certainly a key factor in our decision today."

But a couple minutes later on the conference call, Delta Chief Executive Officer Richard Anderson seemed to back away from Bastian's statement. A reporter asked if oil forced the executives' hands.

"The strategic basis for this announcement is a sound strategic basis whether fuel is at $60 or fuel is at $112 today," he said.

Anderson went on to say that while any leader would have to take a close look at how to deal with rising fuel costs, the merger just made sense as a way to build a powerful global network regardless of fuel costs.

So how big a deal is the current cost of oil? And how big a role did it play in moving the combination forward? Aviation consultant Jon Ash of InterVISTAS-ga squared is not convinced the cost of oil was at the center of Delta and Northwest's tie-up.

"I somewhat discount that," Ash said. "You're right, everyone's talking about it, but the fact is you're going to burn as much fuel, and it's going to cost you as much, whether you operate as a $20 billion carrier or a $30 billion carrier."

Another rationale for the combination is known as "right-sizing" of the fleet, which means using planes that aren't too big or small for a given route.

Bill Hochmuth, a senior research analyst for Thrivent Asset Management, thinks right-sizing will be an important way for the combined airline to respond to high fuel costs.

And, Hochmuth said, the new combined airline, which will have more cash on hand, can handle rising costs more easily.

"They talked this morning about having $7 billion in liquidity," he said. "That gives them much more room to handle higher costs and potential losses if things keep up at these types of levels and fares cannot be escalated quickly."

At the end of the day, some of the reasons why Delta and Northwest may have decided to combine now may be some of the same reasons why the deal did not get a jubilant reception today on Wall Street. Hochmuth said the price of crude oil, which seems to have created at least some urgency around the deal, may have tempered investors' responses.

"You have fuel that is up nearly $2 to record highs," Hochmuth said. "And I truly believe airline stocks are down today because of fuel. If you look historically there is a very noticeable correlation between fuel price movement and stock price movement."

Hochmuth added that Wall Street investors might also be holding back because they see the merger announcement as only the first step in a long process.

Shares of Delta's stock closed down 13 percent, and Northwest's closed down 8 percent.