here is an article from the NY Times about this also..
http://www.nytimes.com/2008/01/10/bu...&partner=MYWAY
Delta Chief to Seek Merger Talks
By JEFF BAILEY
Published: January 10, 2008
The chief executive of Delta Air Lines plans to ask the company’s board for permission to enter into formal merger talks with both Northwest Airlines and United Airlines, a person close to Delta said on Thursday.
Airline stocks soared after The Wall Street Journal reported the request on its Web site. The big six network airlines’ shares were all up more than 13 percent. Northwest, considered by many industry experts and analysts to be the best match for Delta, was up more than 30 percent. Delta’s shares were up about 20 percent, and those of UAL, United’s parent, rose slightly more.
Delta’s chief, Richard H. Anderson, who is also a former chief executive at Northwest, will ask his fellow board members on Friday to approve the talks.
A New York hedge fund, Pardus Capital Management, helped hurry the consolidation discussions among airlines in November by formally asking Delta to enter into merger talks with United. Pardus at the time owned shares of both companies.
Delta formed a special committee to look into strategic alternatives, including mergers.
One big merger could set off further consolidation among airlines. Continental, for instance, has said it prefers to remain independent but that it might enter the fray to avoid being at a disadvantage should other carriers combine. US Airways, the product of a 2005 merger with American West Airlines, despite operating problems since the merger, showed that costs could be cut significantly in such a combination.
With fuel prices high, the economy softening and union airline workers demanding raises from bankruptcy-imposed contracts, the industry faces a very difficult 2008.
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