Delta Merger Rumors Take Off

Deal could set off a wave of consolidation as airlines struggle to contain costs
By Jim O'Neill,  Newser User
Posted Jan 11, 2008 8:00 AM CST
A traveler passes a Delta Airlines sign as she makes her way through Hartsfield Jackson Atlanta International Airport in Atlanta in this Feb. 14, 2007 file photo.   (Associated Press)
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(Newser) – Airline merger talks are in the air, with Delta Air Lines executives expected to get the go-ahead from their board today to court Northwest or United. Delta’s matchmaking efforts began with exploratory talks in December, the Wall Street Journal reports. The news prompted airline stocks to soar—Delta was up 18%, Northwest rose 32% and United parent UAL jumped 24%.

Carriers want to act under the Bush administration, which they see as less restrictive on antitrust issues than a possible Democratic replacement in 2009. Consolidation would reduce competition and likely increase fares, but it would also would trim excess capacity, labor and administration costs—and help contain fuel costs. If Delta can find a partner, Continental may be the next to seek a deal.