US Airways Drops Delta Bid

Updated from 12:02 p.m. EST

US Airways (LCC) ended its hostile bid to take over Delta Air Lines (DALRQ) after the Atlanta-based carrier's creditors said they wouldn't support the proposal.

The takeover effort, announced Nov. 15, had triggered a round of consolidation speculation in the airline industry. Much of it involved the fates of the two bankrupt carriers, Delta and Northwest(NWACQ).

But Northwest said Tuesday that it would emerge from bankruptcy as a standalone carrier, and now Delta appears poised to do the same. Delta's creditors said Wednesday that they will support Delta's independent reorganization plan, which is expected to be filed with the bankruptcy court later this week.

In a prepared statement, the committee said it held extensive discussions with representatives of both carriers and with various advisers. It considered factors including "valuation, timing and the risks [and] the likelihood of a successful consummation" of both plans.

The committee said it "intends to work collaboratively with Delta towards confirmation and consummation" of its plan.

US Airways said it withdrew its $10.2 billion offer because creditors would not meet its Feb. 1 deadline to show support for the bid, in particular by postponing a scheduled Feb. 7 hearing on Delta's disclosure statement.

"We are disappointed that the committee, which has been chosen to act on behalf of all Delta creditors, is ignoring its fiduciary obligation to those creditors," said US Airways CEO Doug Parker, in a prepared statement.