Delta Considering Bid for American
 

According to the AJC (and Wall Street Journal,)

Delta is looking into making a bid to buy American Airlines parent company AMR Corp. They also mention that a capital group is looking into them, and so "are other possible firms."

Report: Delta considering bid for American | ajc.com

If this materializes, and actually happens with Delta, it will actually start looking like a monopoly (ie Bell System,) in my opinion.

Any thoughts?

If AMR, Delta and United link up, then it will be like Bell.

I like the idea of Delta and American merging. American has a strong presence in South America, and Europe (where Delta lacks). I feel that the merger would strengthen Deltas' route structure overall.

You know, sometimes I think we are going to end up at some national airline someday comprised of all the failed legacy and regional carriers :confused:

American is strong in Europe and Delta lacks? Might want to check your route map on that one.

That would put us on equal footing with all the other world airlines that are backed by their gub-ments at least.

EIE. Disregard the Europe comment.

American Airlines' bankruptcy: Seeking the best partner for AA | The Economist

American Airlines' bankruptcy
Seeking the best partner for AA
Jan 15th 2012, 18:56 by N.B. | WASHINGTON, D.C.

BOTH Delta Air Lines and US Airways have expressed interest in possibly acquiring the bankrupt American Airlines, according to multiple reports this week. Hunter Keay, an analyst with Wolfe Trahan & Co, told Bloomberg he expects the odds of American being an independent company post-bankruptcy are "20 percent, at most." So if a merger looks inevitable, which suitor would best for business travellers?

First, a few things to keep in mind. As my colleague noted in November, American has some debt problems—before it entered Chapter 11 in November, it had $30 billion worth of obligations against around $4 billion in cash. And the airline industry isn't exactly a great business. Note one of my favourite statistics ever, via Slate business correspondent Matt Yglesias: "Cumulative earnings across the history of American passenger aviation are negative $33 billion." That doesn't mean that individual airlines haven't made money, or that the industry couldn't be profitable in the future—indeed, the progress of industry consolidation and deregulation offers some hopeful signs for both travellers and the industry itself. But it's hard to know which way that's going.

Mr Yglesias argues for a "patriotic merger" between American and US Airways in order to give America three very large global airlines (Delta, United and the new US Air/American entity), with one big airline in each of the three major airline alliances. (Mr Yglesias wants the merged airline to join the American-led oneworld alliance, which sounds like a good idea but is far from a forgone conclusion. An American-less oneworld would be under enormous pressure from Star Alliance and SkyTeam, and could conceivably lose more members or fold altogether—something that should probably be avoided.)

Since I'm generally bullish on the airline alliances (and competition between them), I'd tend to think the US Airways/oneworld route would be better for competition, and thus better for travellers. But the real question is what American government regulators and anti-trust authorities think about the whole idea. A Delta-American merger would produce a company that would control a huge chunk of domestic market—29.6%, double the share of its next biggest competitor, Southwest Airlines.

Another issue is whether Delta's supposed interest in acquiring American is serious or simply an effort to cause problems for US Airways and oneworld. It's hard to imagine that Delta's executives aren't aware of the regulatory problems a merger with American might face. Whatever happens, this struggle will be interesting to watch.

Don't think AA-US or DL will happen, IMO. But, some believe UA or DL + US will:

Delta posts results as merger rumours heat up
Delta Air Lines has posted net income of $1.2bn for 2011 amid rumours it is considering a bid for US Airways.



The bankruptcy of American Airlines could trigger a new round of consolidation in the US airline market, and both Delta and US Airways have hired advisers to study a potential bid for the Fort Worth-based carrier. With a Delta-American combination likely to face a hard task getting past antitrust regulators, a bid for US Airways would appear to be an easier option for Delta.



A Wall Street Journal report over the weekend said US Airways was open to being either a buyer or a seller and was expecting Delta to reach out, citing unnamed sources “familiar with the situation”.



Delta, whose last acquisition was of Northwest in 2008, is in a decent position to make another move. The airline recorded net income for 2011 of $1.2bn, excluding special items, as the company said it offset $3bn higher fuel expense through “strong revenue performance and its fuel hedging programme”. Net income for the December 2011 quarter was $379m, or $0.45 per diluted share, excluding special items. This represents a $221m improvement year over year. Delta’s GAAP net income was $425m, or $0.50 per diluted share, for the December 2011 quarter and $854m for 2011. Adjusted net debt at the end of 2011 was $12.9bn.



“Delta people pulled together in 2011 to produce a solid profit, strong cash generation, and the best operational performance in the industry for our customers,” said CEO Richard Anderson. “Looking forward to 2012, we will continue our commitment to sustained profitability and superior returns by growing and diversifying our revenues, while taking a disciplined approach to capacity, costs and capital spending.”



Jason Holland, Editor, Aircraft Technology Engineering & Maintenance

Disregard.....