Delta Air Lines Inc. is studying US Airways Group Inc. as a possible acquisition target, people familiar with the matter said, as U.S. carriers prepare for a new round of consolidation.
Delta, the world's No. 2 airline by traffic, also has been assessing a similar move for American Airlines parent AMR Corp., the people have said.
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Delta is studying possible deals with US Airways or American Airlines.
Delta is working with Goldman Sachs Group Inc. as one of its financial advisers, along with Blackstone Group, the people said.
Delta sees itself as a consolidator in the airline industry and is studying several options, the people added. AMR entered bankruptcy-court protection in late November.
Delta hasn't yet approached US Airways, the No. 5 U.S. airline, and is still weighing which deal if any would make most sense and have the best odds of success, the people familiar with the matter said. Delta's last transaction was in 2008, when it acquired Northwest Airlines.
US Airways is open to being both a buyer or a seller and is expecting Delta to reach out, the people said. US Airways also is looking at a possible tie-up with AMR, US Airways has said. A marriage of US Airways and AMR would form a company on par with Delta or United.
The posturing signals a possible new wave of U.S. airline consolidation, following a string of mergers and acquisitions in the past seven years.
The recent tie-ups have formed larger airlines and reduced the number of major U.S. carriers to five from roughly triple that number 20 years ago.
The consolidation has helped the surviving airlines jettison money-losing routes, raise ticket prices and tighten control on their hub airports.
A Delta-American combo could draw antitrust scrutiny, given the massive size of the merged company.
Delta has conducted an antitrust analysis and believes with concessions, it would have a good chance of obtaining regulatory approval, people familiar with the matter said. AMR is the No. 3 U.S. airline.
The people cautioned that these are very early-stage explorations and any deal, if it happens, may not be reached until a year or so from now.
US Airways has looked for other partners in the past. In 2010, US Airways was in talks with United Airlines but United ended up merging with Continental Airlines to form United Continental Holdings Inc. That was the second time US Airways and United talked about a combination.
In 2006, US Airways made a $8.7 billion hostile bid for Delta when that company was in bankruptcy proceedings, but that effort failed. US Airways itself is the product of a 2005 merger of the old US Airways, which was coming out of bankruptcy, and America West Airlines.
Delta, which is part of the global SkyTeam marketing alliance, likely would try to pull any potential merger partner into its alliance, the people said. Airline alliances let members steer business to each other and, in some cases, link frequent-flier awards and perks.
US Airways is in the Star Alliance, the largest of the global airline marketing groupings, which also counts as a member United Continental.
Delta, the world's No. 2 airline by traffic, also has been assessing a similar move for American Airlines parent AMR Corp., the people have said.
Enlarge Image
Getty Images
Delta is studying possible deals with US Airways or American Airlines.
Delta is working with Goldman Sachs Group Inc. as one of its financial advisers, along with Blackstone Group, the people said.
Delta sees itself as a consolidator in the airline industry and is studying several options, the people added. AMR entered bankruptcy-court protection in late November.
Delta hasn't yet approached US Airways, the No. 5 U.S. airline, and is still weighing which deal if any would make most sense and have the best odds of success, the people familiar with the matter said. Delta's last transaction was in 2008, when it acquired Northwest Airlines.
US Airways is open to being both a buyer or a seller and is expecting Delta to reach out, the people said. US Airways also is looking at a possible tie-up with AMR, US Airways has said. A marriage of US Airways and AMR would form a company on par with Delta or United.
The posturing signals a possible new wave of U.S. airline consolidation, following a string of mergers and acquisitions in the past seven years.
The recent tie-ups have formed larger airlines and reduced the number of major U.S. carriers to five from roughly triple that number 20 years ago.
The consolidation has helped the surviving airlines jettison money-losing routes, raise ticket prices and tighten control on their hub airports.
A Delta-American combo could draw antitrust scrutiny, given the massive size of the merged company.
Delta has conducted an antitrust analysis and believes with concessions, it would have a good chance of obtaining regulatory approval, people familiar with the matter said. AMR is the No. 3 U.S. airline.
The people cautioned that these are very early-stage explorations and any deal, if it happens, may not be reached until a year or so from now.
US Airways has looked for other partners in the past. In 2010, US Airways was in talks with United Airlines but United ended up merging with Continental Airlines to form United Continental Holdings Inc. That was the second time US Airways and United talked about a combination.
In 2006, US Airways made a $8.7 billion hostile bid for Delta when that company was in bankruptcy proceedings, but that effort failed. US Airways itself is the product of a 2005 merger of the old US Airways, which was coming out of bankruptcy, and America West Airlines.
Delta, which is part of the global SkyTeam marketing alliance, likely would try to pull any potential merger partner into its alliance, the people said. Airline alliances let members steer business to each other and, in some cases, link frequent-flier awards and perks.
US Airways is in the Star Alliance, the largest of the global airline marketing groupings, which also counts as a member United Continental.
