Thursday, June 08, 2000
Delta, American discussing merger?
Some view talks as just a ploy
Enquirer news services
Delta Air Lines is discussing industry consolidation and a possible deal with American Airlines, a person familiar with the talks told Bloomberg News Wednesday.
But a leading airline analyst said the talks are just for defense.
“It's a move to stop the US (Airways)-United merger,” said Julius Maldutis, analyst for CIBC World Markets in New York, adding that government regulators will be forced into approving all or no airline mergers. “The government will approve none. ... You think the government will allow the U.S. transportation sector to concentrate into three big airlines? I doubt it very much.”
Wednesday's Wall Street Journal first reported that Monday's Delta-American merger talks involved senior managers below the chief executive level from both carriers, as well as investment bankers and lawyers. Spokes men for the companies declined to comment.
The meeting comes two weeks after UAL Corp., parent of the largest carrier, United Airlines, agreed to buy US Airways Group for $11.6 billion. American Airlines' parent, AMR Corp., has approached Northwest Airlines Corp. about a purchase.
Delta operates its second-largest hub, and more than 90 percent of the flights, at Cincinnati/Northern Kentucky International Airport. Some 5,500 employees of Delta, and 2,800 employees of its subsidiary Comair, live in Greater Cincinnati.
Financial terms of a possible American-Delta combination have not been discussed, the Journal said. American is larger, but Delta's market capitalization is about $6.2 billion, AMR's about $4.2 billion.
Enquirer reporter Amy Higgins contributed.
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