Delta Merger May Reshape Alliances

CHARLOTTE, N.C. -- The three global airline alliances have become increasingly important as international travel soars, and a reshuffling of the major carriers could bring about a vast disruption.

But that's not to say they can't realign if the U.S. airline industry consolidates.

"I don't know if international alliances would have to be undone," if there are mergers, says Morningstar analyst Marisa Thompson. "But there may have to be a lot of hog trading."

Last week, the board of Delta (DAL) debated whether to pursue merger talks with Northwest(NWA) or UAL's (UAUA) United Airlines, and now, discussions have begun with both, The Wall Street Journal reports.

The wave of consolidation chatter pervading the airline industry often involves the roles of the three alliances -- Oneworld, Skyteam and Star. Because each group has one of the big three U.S. carriers as a leading member, the impact of change could cascade through the global transportation system.

Airlines constantly make major decisions based on alliance pairings. As an example, AMR's(AMR) American Airlines moved into terminal two at Tokyo's Narita Airport a year ago, joining Japan Air Lines, which was about to become its partner in the Oneworld alliance.

The move made it far easier for American passengers to fly to Asia, enhancing its competitiveness with Skyteam and Star members.