Delta eyes two rivals?
|
|
January 31, 2001: 7:54 a.m. ET
Delta initiates broad talks with Northwest and Continental - report
|
NEW YORK (CNNfn) - Delta Air Lines has started wide-ranging talks with Northwest Airlines and Continental as it explores a strategic response to a rapidly consolidating airline industry, the Wall Street Journal reported Wednesday.
The paper said the talks are preliminary and that Atlanta-based Delta (DAL: Research, Estimates) is mainly interested in a combination with Continental. But Northwest could veto such a deal because of an alliance between itself and Continental, the report said.
Also being considered is whether a combination of Delta and Northwest makes sense, the Journal said, quoting people with knowledge of the talks. The talks also are expected to cover whether a strategic alliance short of a full merger may be viable among the carriers.
The number of airlines is shrinking after AMR, parent of American Airlines, recently unveiled plans to acquire Trans World Airlines and some assets of US Airways Group. The deal followed an agreement by UAL Corp., parent of United Airlines, the nation's biggest carrier, to buy US Airways Group Inc. (U: Research, Estimates).
Both deals are still awaiting federal regulatory clearance. If the deals are approved, AMR (AMR: Research, Estimates) will grab 25 percent of the U.S. airline market, and UAL Corp. (UAL: Research, Estimates) will hold about 26 percent of the market, according to the newspaper. No. 3 Delta holds about 18 percent of the U.S. air travel market.
Representatives for Delta, Northwest (NWAC: Research, Estimates), Continental (CAL: Research, Estimates) declined to comment on the situation, according to the Journal.
Delta stock rose $1.25 to $47.13 Tuesday. Northwest stock lost 12 cents to $25.38, Continental added 50 cents to $51.16, and AMR stock rose $1.28 to $38.25. US Airways stock added 17 cents to $45.
|
|
|
|
|
|