Delta May Spark Merger Mania
CHARLOTTE, N.C. -- Airline industry consolidation has moved a step closer to reality, now that Delta (DAL) has made clear that it wants to be a player.
"We do believe the right transaction, certainly for Delta, would add tremendous value," Ed Bastian, the carrier's president, declared last week, as he discussed mergers at a Wall Street investor conference. "We're looking at the question [in] real time. It's a front burner issue for us."
Bastian also said, "Delta views itself an acquirer, not a seller." In tone, he went beyond statements made last month by Delta's new CEO Richard Anderson, who said, on his first earnings call, that the carrier is open to a deal.
With Delta in, three of the six legacy carriers are now publicly committed to pursuing merger possibilities. US Airways (LCC) CEO Doug Parker, one of two leading advocates for consolidation, has presided over a merger between US Airways and America West, as well as a failed bid for Delta.UAL (UAUA) CEO Glenn Tilton, the other supporter, regularly calls for consolidation, although so far he hasn't gotten anywhere despite approaches to Continental (CAL), Delta and possibly others. Parker offered fresh perspective on the issue last week, telling the same investor conference that US Airways may have a diminished role because it is the smallest legacy carrier. "It's not as if we can force this to happen at this point. Being the sixth of the big six, we're not going to be somebody's first choice," he said. However, he added, "It's hard to marginalize $11 billion in revenue."
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