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Delta: We Need Industry Consolidation

Stocks in this article: AAMRQ.PK DAL LCC

ATLANTA -- ( TheStreet) -- Delta (DAL) CEO Richard Anderson said he wants to see another airline.

"Further industry consolidation will be overall quite good for Delta and quite good for the industry," Anderson said as he answered questions during the Delta earnings call on Wednesday. "Look at the current organizational construct of the industry: We need the next transaction to be complete. Then we will have a pretty rational organizational construct in the industry."

A potential merger between American (AAMRQ.PK) and US Airways (DAL) is widely viewed as "the next transaction" in the airline industry. Anderson didn't mention the two carriers by name.

However, he addressed the consolidation issue shortly after President Ed Bastian noted that Delta has "had some share gains in recent weeks from some of the problems American has had, but they are relatively modest."

Additionally, when a reporter asked whether gains from consolidation might be offset by having a stronger competitor in the Southeast and trans-Atlantic, both areas where a combined US Airways/American would gain strength, Anderson noted that all of the airlines in Latin American have benefited from recent consolidation in that region.

As far as having to face a tougher competitor, Anderson declared: "We don't intend to give up any market share."

Also Tuesday, in a letter to members of the Allied Pilots Association, which represents American pilots, APA President Keith Wilson wrote that the unsecured creditors committee and the carrier have jointly requested a 30-day extension in the carrier's bankruptcy case.

"The prospective 30-day extension is not necessarily something that AMR management sought, but they may have been compelled to agree to it by the creditors," Wilson wrote. "Our advisers believe that prolonging the restructuring process increases the likelihood of a change of control."

Wilson added that if ongoing merger discussions between the two carriers don't prove productive "our advisers have indicated that US Airways management will most likely pursue an alternate strategy that wouldn't involve securing AMR management's consent."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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