Each Major US Airline In Mega Merger Negotiations

Reuters:

American Airlines (AMR.N) has had early-stage merger talks with US Airways (LCC.N) and is in advanced talks for an alliance with Continental Airlines (CAL.N), sources briefed on the situation said on Friday.

News of the talks comes after Delta Air Lines' (DAL.N) and Northwest Airlines' (NWA.N) announced nearly two weeks ago they planned to merge to become the world's largest airline, seeking to counter skyrocketing fuel prices, a weak economy and a growing competitive threat from European carriers as trade barriers fall on trans-Atlantic travel.

American Airlines' talks with Continental are focused on forming an alliance that could share passengers, much like the SkyTeam partnership that includes Air France-KLM (AIRF.PA), Alitalia (AZPIa.MI), Czech Airlines, Delta Air Lines (DAL.N), and Northwest Airlines (NWA.N), the people said.

Alliances have flourished in the industry because they generate profits through marketing programs and flight code-sharing without the headaches of combining operations.

But Continental is also in advanced talks with United Airlines (UAUA.O) for a full merger, the sources said. Continental will choose either the merger or the alliance, not both, sources said.

Meanwhile, United Airlines is also in serious merger talks with US Airways, and will choose to merge with either Continental or US Airways soon, the people said.

Read the whole story: Reuters

Comments

[mmckinl]

The signs of Peak Oil are all around us ...

Food shortages, food price increases , spiking energy costs, energy shortages.

It' s really no surprise that the airlines have to merge to cut costs because jet fuel will only get more expensive until there is a major global recession and demand drops for oil.

And just as this global recession reduces oil demand, there will be a spike in oil prices from any turnaround in the global economy.

[jmpurser]

Anybody remember when deregulation was going to fix all our problems AND give the consumer more choices?

I didn't think so.

[ThePodiumIsMine]

Yep, another Democrat meddling policy that screwed the country.

[FogBelter]

If the Airlines Industry is to survive it needs to be Nationalized and subsidized so it can continue to meet the needs and safety standards of its critical commercial mission.

Meeting the bottom line needs of investors just doesn't fly and this industry is too important to allow to flail.

[ThePodiumIsMine]

Hugo? Is that you?

[FogBelter]

Nope, just a Patriotic American who believes that what is good for the Nation at large is more important than the obsessive avarice of poorly raised profit addicts who suffer from a delusion of Immortality.

[vandegrasse]

This is not good news for flyers!

[Woggles]

That's odd.
I wouldn't have thought they would be consolidating operations in an era of $4 jet fuel, high ticket prices, and declining consumer income?