An AP report picked up by BusinessWeek.com is fueling merger talk around that other bankrupt airline, Northwest. To date, most of the merger buzz has centered on Delta, which is in the midst of fighting off a hostile-takeover bid by US Airways.
The news that’s now causing the industry to buzz is that Northwest has hired Evercore Partners Inc., an investment-banking firm, to help it explore “broad strategic alternatives” that could include either a merger or acquisition. So depending on who you listen to, Northwest might become the target of a merger, or it might just go ahead and initiate merger talks on its own. The AP report speculates that things will really get moving once the new year arrives.
In other words? We don’t know anything more today than we did yesterday, as both the merger and acquisition options have long been considered on the table for Northwest. The only thing we (think) we know for certain is that the air travel industry is headed toward some kind of judicial pruning amongst the major carriers. It makes the most sense from a profitability standpoint—but then again, if there’s one thing the airlines have proven time and again, it’s that they know very little about running a profitable business.
So, for now, the best we can do is sit back, relax, and wait for the mergers to begin.
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