As airlines struggle, are mergers inevitable?

Sunday's Atlanta Journal-Constitution had an interesting piece about the persistence of airline merger rumors. There's been speculation about a Delta-Northwest merger almost since it became clear the two airlines would file for bankruptcy late last year. Both airlines have publicly denied the rumors, but as the Journal-Constitution writes, "the idea that a merger may figure into Delta's deliverance from years of financial turmoil isn't likely to go away that easily."

The newspaper is right. Most experts agree the industry needs an overhaul in the form of major consolidation—good for the airlines because it would reduce competition in a market where supply far outstrips demand. That's not so good for consumers (for the same reason), but my personal view is a merger between Delta and any other airline—Northwest or otherwise—isn't anywhere close to being on the radar just yet. Both carriers have separate bankruptcy strategies and are moving forward with implementing them.

Advertisement

Perhaps they're waiting to see how the newly merged US Airways (with America West) fares in the long term. Perhaps they're eying each other coyly even now, behind our backs, kicking tires here and there behind the scenes to see if there's a good fit. Or perhaps they're just stubborn.

Either way, it's too soon to predict an end result with any certainty.

Read comments or add your own insight!
Please enable JavaScript to properly view and use this web site.