High Hurdles Await Airlines

Midwest Senior Vice President Carol Skornicka acknowledged that this is a time for consolidation talk. "Everybody seems to think it's the flavor of the day," she said. "Generally, it makes sense, but our product is so differentiated, and so unique, and [a merger] would mean elimination of the brand.

"We've survived 22 years being small, so when people say 'you can't survive,' we don't believe it," Skornicka said.

As for Northwest, industry watchers assume that American wants to acquire the Minnesota-based carrier because of its strong presence in Asia. Thus far, there has been no indication that American buys into this theory. In recent years, American has suffered rather than benefited from acquisitions of Reno Air in 1999 and TWA in 2001. It may have had enough.

American CFO Tom Horton, in a recent interview, said, "In the airline business, mergers are really complex [and] fraught with difficulty in terms of labor issues and other issues. There's a mixed record with respect to mergers in this industry."

In October, Delta CEO Jerry Grinstein told reporters he expected that in two years, the major carriers would be aligned in pretty much the same way they are now. Asked about the possibility of consolidation, Grinstein said: "I don't look for it to take place in the near term. ... I don't look for it to take place anytime."

A month later, Grinstein heard on the radio that US Airways was launching its hostile bid, the move that triggered the current round of merger speculation. Grinstein has been battling the takeover effort ever since.