Delta May Spark Merger Mania

In Parker's view, pressure for consolidation comes from two sources -- high oil prices and an impending change in presidential administrations. "I am hoping that the combination of a lot of talk and an operating environment with $95-a-barrel oil brings this together," he said. Mergers benefit the entire industry, he said, because they lead to reduced capacity.

As far as Washington is concerned, Parker noted that with a new attorney general likely to take office in 2009 no matter who is elected, the current administration may be unlikely to rule on an airline merger during the latter part of 2008. "If you don't have [merger plans] announced by year-end or shortly thereafter, it will be really hard to get something done," he said. "You would have to wait for a new team to come in January 2009."

In a dig at Delta's resistance to the US Airways takeover bid, Parker said everybody would be better off had the effort succeeded. "We offered $11 billion for a company now worth $7.5 billion. People are upset about it," he said. Also, the merger has reduced industry capacity by 4%.

The other three legacy airlines have revealed little about their positions on consolidation. For example, Continental CFO Jeff Misner noted "we're a little bit less vocal about things than others might be. We're just not going to hype things up."

Continental's maneuverability is somewhat limited because Northwest (NWA Quote) holds a stake in Continental and could block any merger efforts by its fellow carrier, Misner noted.