Around the Net

Airline Deals May Fly Again

Delta's board of directors is expected to act on a proposal today to give CEO Richard Anderson a green light to pursue formal merger discussions with both Northwest and United. The move could spur a new round of industry matchmaking, although any big U.S. airline merger is sure to draw heavy regulatory scrutiny. Carriers believe the chances of getting one or two big deals approved by antitrust authorities are better under the current Republican administration.

A new round of industry consolidation would help airlines reduce excess capacity, raise fares and boost margins battered by rising oil costs, though it likely would lead to more grumbling from stressed passengers. Merged airlines could save money by combining computer systems, reducing corporate costs and closing some hubs. Also, bigger airlines may have an edge in winning corporate accounts because they have broader route networks.

United and Delta are the second- and third-largest carriers by traffic behind American Airlines. Continental is No. 4, and Northwest is No. 5.



Read the whole story at The Wall Street Journal »

Next story loading loading..