Delta discusses US Air bid

Alisa Roth Jan 22, 2007
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Delta discusses US Air bid

Alisa Roth Jan 22, 2007
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SCOTT JAGOW: We’ve told you how Delta Airlines feels about a takeover by US Airways. I think Delta would rather have its airplanes painted bright pink than do this deal, but Delta has no choice but to look at US Airways’ latest offer of more than $10 billion. Alisa Roth explains.


ALISA ROTH: The bankrupt airline is legally required to consider all offers. One question is whether the proposed merger makes strategic sense.

Analyst Roger King follows the industry for research firm Credit Sights. He says the most logical would be for Delta to join forces with a company that has complementary routes, which would extend Delta’s reach.

US Airways is not that kind of company.

ROGER KING: It basically takes two airlines that have almost the same route structures and allows them to get rid of a lot of costs while maintaining the same number of customers. So it’s really more of a cost-savings merger than a network synergy merger.

Delta wants to stand alone when it emerges from bankruptcy. But it’s not clear whether its creditors will accept that.

Delta’s next hearing in bankruptcy court comes early next month.

In New York, I’m Alisa Roth for Marketplace.

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