I’d characterize this as bad news

But it’s better than a merger with Northwest or US Air.

UAL Corp.’s United Airlines and Delta Air Lines Inc. have been discussing a combination between the nation’s second- and third- largest carriers that would keep the United name and the corporate headquarters in the Chicago area, The Associated Press has learned.

There is a sense of urgency in the talks, which have been going on for some time and continued as recently as a week or so ago, an official with knowledge of the talks said Wednesday. The official spoke on condition of anonymity because the person was not authorized to speak publicly.

I’d guess that Delta, just coming out of bankruptcy, really isn’t in great shape.

11 comments

  1. Rogue109 says:

    Erick, your analysis is spot on. It’s just a real shame, but that is where market forces are pushing the industry.

  2. StevePerkins says:

    The airline industry clearly needs consolidation… and it would be nice to see Delta looking to acquire smaller rivals, rather than being an acquisition target itself. For whatever reason though, Delta seems determined to wear the dress in any marriage it enters. This seems strange to me… I though the whole point of emerging from bankruptcy was to AVOID being an acquisition target.

  3. Rogue109 says:

    Reuters is now reporting that Delta has denied that any talks with UAL have ever taken place. Interesting…

  4. GodHatesTrash says:

    What will all you rednecks tell the Yankees once Delta is no longer??

    “United is ready when you are” just doesn’t get it.

  5. Donkey Kong says:

    Steve,

    Not sure where you get your ideas. Delta vigorously fought off US Airways’ hostile bid a year ago. Delta management said today in the AJC (http://www.ajc.com/business/content/business/delta/stories/2007/10/16/delta_1017_web.html?cxntnid=biz101707e) that they would only consider a merger if Delta was the controlling entity, rejecting the possibility of merging with United under the United banner. Delta’s not just wearing the pants in any potential relationship, they’re wearing the jock-strap too.

    Consolidation is needed from the vantage point of the airline industry. With high commodity prices and a tight competition in an industry whose services have become nearly identical, it’s remarkably tough for airlines to make a profit. Of course, consumers win during this period. But its only a matter of time before airlines are forced to merge or face bankruptcy. Not many airlines would fare as well as Delta has coming out of bankruptcy.

  6. Donkey Kong says:

    No worries. My infallibility only pertains to:

    1) Georgia football
    2) Bill Simon insults (only because of his undying loyalty to GT–unimaginable–otherwise, I’m sure I’d like the guy)
    3) Wild Turkey 101
    4) Any statement on the violent nature of the peaceful left or denigrations of a nearby reprehensible MSM outlet

    For everything else, its a crapshoot.

  7. I Am Jacks Post says:

    Crap, if they merge, I’ll have one less option when shopping for a ticket on an airline that will depart late and arrive late.

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