Speculation is rising that the US airline industry could be poised for a round of wholesale consolidation following US Airways' submission of an improved bid for Delta Air Lines. The carrier is now offering $10.2 billion after its first offer of about $8.5 billion was rejected by Delta's management and major creditors.
All but one of the top six international carriers are reportedly involved in merger talks. The long-mooted merger of Delta and Northwest Airlines is the main focus of attention. However, United Airlines, which was promoting consolidation before it emerged from Chapter 11 protection in February 2006, is also said to be in separate talks with Continental and Northwest.
Meanwhile, US Airways' bid has pushed Delta and Northwest, which are both operating under bankruptcy protection, into merger talks, say analysts at JP Morgan. Neither Delta nor Northwest are commenting on the reports. Both carriers have previously insisted that they intend to emerge from their respective bankruptcies as single standalone entities.