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Airline Deals Less Likely As Economy Sours

  • MSNBC/AP, Wednesday, March 19, 2008 11:15 AM

A day after pilots at Delta Air Lines created fresh doubt about a possible Delta hookup with Northwest Airlines, executives from Continental Airlines and Southwest Airlines said yesterday that they're not working on any obvious deals. "It feels like all the talk about consolidation has lost a lot of steam," says Laura Wright, Southwest's chief financial officer.

Executives say worries about recession, high fuel prices and tighter credit seem to have cooled the merger fever that gripped the industry just a few weeks ago. Delta said talks on merging work forces with another carrier had failed. They didn't mention Northwest by name, but people close to the talks have said Northwest was the other player in deal talks.

The possibility of a Delta-Northwest deal spawned speculation about all kinds of combinations. Airlines executives believe that business travelers pick carriers with extensive U.S. and international routes; they would be loath to sit idly if rivals join forces.

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