Rumors of possible airline consolidation
The travel industry is a-buzz with the rumors that a potential takeover might occur as Delta looks at American Airlines. Delta is the second largest airline after previously taking over the failing Northwest airlines in 2008 and now it looks as if they have taken an interest in American Airlines.
On November 29th of 2011 American Airlines filed for Chapter 11 bankruptcy due in part to a loss of business travelers and Union negotiations. The filing did not affect travelers but has put a strain on the daily business of one of the third largest US carrier. The recent announcement that American Airlines plans to lay off and cut pensions will affect more than 81,000 workers world wide.
Monopoly? Or is this the trend toward a global airline?
The possibility of a merger between Delta and American has some opposition as the merger will undeniably result in less opportunity, less competition, and higher prices for travelers. Similarly a merger between Delta and US Airways would spell disaster for competition in the Northeast and many other locations where both airlines are currently competing for air dominance.
These rumors are still just that – rumors. Delta has not made a formal statement about its future plans to acquire either airline, but the possibility that federal regulators would allow a merger is still on the table.
If you’re interested in learning more about these rumors and what the industry is saying then check out this article from MPR here and for more information on the American Airlines bankruptcy then read this great article from The Star-Telegram here. For information on the possible merger between US Air and Delta check this article here from Tulsa World News.