Tue, Jan 08, 2008
Analysts Think Carrier Could Kick Off Wave Of
Consolidation
Atlanta-based Delta Air Lines has put its plans to sell off
problematic regional subsidiary Comair on hold, renewing rumors
about a looming merger between Delta and a
carrier-to-be-named-later -- but strongly believed to be either
Northwest or United.
Citing unnamed sources, the Financial Times reports Delta
conducted preliminary talks with JPMorgan Chase regarding its
options for Comair, but opted to hold off retaining the firm until
a special committee of Delta directors and bankers has completed a
review of the airline's merger options.
That doesn't mean Delta isn't interested in selling off Comair,
though. "The sale of Comair is not imminent, but our position
hasn't changed in that we are always looking to maximize the value
of our assets," the airline said.
Analysts widely believe the US airline industry is moving
towards consolidation... and many feel Delta will lead the
charge.
As ANN reported, the November
2007 rumor of a looming merger between Delta and United -- later
found to have been planted by an investment group with stakes in
both airlines -- sent the industry into a brief frenzy, as
officials with both carriers denied holding talks.
Delta CEO Richard Anderson -- who, incidentally, once held that
same title at Northwest -- said last year he saw benefits in
consolidation, a marked departure from his predecessor. Former
Delta chief Gerald Grinstein, who led the carrier through its
battle to emerge from Chapter 11 bankruptcy, also fought off a
dogged hostile takeover attempt by US Airways.
Should Delta enter into a merger with one of the other five
"legacy" US airlines, analysts believe at least two remaining
carriers will also choose their partners, as it were -- which could
make 2008 a banner year for airline buyouts.
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