CHARLOTTE, N.C. -- Since the airline industry cumulatively has failed to make money since the Wright Brothers first flew, it might seem reasonable to let the hedge funds take over.

But it's hard to imagine there is any real likelihood for successfully executing the scheme, floated last week by hedge fund Pardus Capital Management, to merge Delta ( DAL) and UAL's ( UAUA) United Airlines.

And it's important to remember that hedge funds' attention spans are brief, often extending only to the interval necessary to generate short-term boosts in the price of their holdings.

Pardus stirred things up in the airline industry, releasing a letter last week that urged a merger between Delta and United. In the letter, Pardus said it had commissioned a study that endorsed the merger, had met with the airlines, laid out a formula for share distributions and selected a management team.

On Friday, the fund joined with Merrill Lynch to host an investor meeting to discuss industry consolidation.

Not to say that Pardus got ahead of itself, but it should be noted that Delta and United say they have not even spoken with one another about a merger.

On Thursday, Delta CEO Richard Anderson reiterated as much before a Congressional committee. Questions had arisen because the Associated Press and The Wall Street Journal both reported last week that some level of contact did occur.

To be sure, both airlines have proclaimed that they're interested in merger partners. On paper, the two seem to fill each other's gaps: Delta needs access to Asia and the Midwest, while United needs access to the Northeast and Southeast.

But all carriers have gaps that others could fill. The truth is that, 29 years after deregulation, each of the six legacy carriers remains, to an extent, a regional operator, still playing the hand it was dealt when the industry was born in the 1920s.

"A lot of mergers make sense on paper, but few of them make sense operationally," says consultant Mike Boyd. "Hedge funs have the most honorable of all objectives: to make money for themselves. But they want short-term gains, and airlines are a long-term business."

Certainly Delta pilots, who would help determine whether a deal takes place, are not enthusiastic about this one.

"What we have to determine, as an airline and as an industry, is whether we are going to let a third-tier hedge fund take the lead in deciding what the industry is going to look like in the future," said Lee Moak, chairman of the Delta chapter of the Air Line Pilots Association, in an interview.

There is only one possible conclusion, Moak said. "We are going to decide, we are going to take our time doing it, and we are not going to be driven by hedge fund managers to make strategic decisions on an inappropriate and unreasonable timeline."

If there were to be an attempt to merge Delta and United, the regulatory issues would be daunting. Both carriers have long histories in states whose legislators would be displeased by the potential loss of their headquarters. Both are currently profitable, so it is not a merger to be easily justified by the "failing airline" rationale, even if fuel prices are high.

This would be a merger of unprecedented scope, combining the second- and third-largest U.S. carriers. In 2001, the Justice Department rejected a proposed merger -- one that had little overlap -- between United and US Airways ( LCC), then the first- and sixth-biggest airlines.

The review, by the way, took 14 months. That may or may not be a precedent. As US Airways President Scott Kirby has said, "The companies chose to have the process take 14 months because United got cold feet."

Perhaps it would take just seven months. It is not unlikely that the hedge funds and strategic investors would move on well before the process ended.

One thing about such investors: They are often in a hurry. In its letter to Delta, Pardus -- which holds 2.5% of Delta and 4.8% of United -- noted: "Time is of the essence as now is the right regulatory environment."

Similarly, in a September letter calling for a frequent-flier program spinoff by American Airlines parent AMR ( AMR), the Icelandic company FL Group, who owns about 9.1% of the company's shares, said "there is no time to lose."

By one important measure, the letters had the desired impact, because share prices rose after they were made public. Fittingly, the gains were largely short-term. Now, shares in all three carriers have largely receded to their levels of before the activists got involved.

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