Delta Air Lines and Continental Airlines are refusing to comment on widely publicised reports that they are negotiating a possible merger that would create the largest airline in the world.
The talks, reportedly initiated by Continental several months ago, are at an early stage, and lesser options are also being considered. The speculation has, however, prompted credit-rating agencies to place the carriers on watch.
Delta has a strong cash position following its rigorous implementation of cost-cutting measures and recently launched Delta Express, a low-cost subsidiary which will operate a fleet of 100-seat jet-powered airliners.
Continental, which was among the US carriers which was forced into bankruptcy protection in the early 1990s, is controlled by the Air Partners LP investment group. Since emerging from Chapter 11, Continental's financial position has been turned around under the leadership of chairman Gordon Bethune, and profits have been at record levels over the past year. The likelihood of Continental's acquisition by Delta has relit speculation over a fresh round of consolidation throughout the US airline industry. A wave of restructuring was widely expected a year ago, when USAir revealed that it was in talks with American Airlines and United Airlines, although nothing came of the talks.
Source: Flight International
