US Airways says withdraws Delta offer

US Airways says withdraws Delta offer
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First Published: Thu, Feb 01 2007. 01 16 PM IST
Updated: Thu, Feb 01 2007. 01 16 PM IST
CHICAGO: US Airways Group Inc. withdrew a $9.8 billion bid for bankrupt Delta Airlines on 31 January , taking pressure off rival carriers to consolidate.
US Airways, the No. 7 US airline, voided the offer after Delta’s official creditors committee said it will instead support Delta’s plan to exit Chapter 11 as a stand-alone company.
”We would have created a better and more financially stable airline that offered more choice to consumers and increased job security to its employees,” US Airways Chief Executive Doug Parker said in a statement.
Shares of US Airways were up 2% , while Delta fell 4 %.
The termination of the bid marked the end of US Airways’ 11-week effort to acquire its larger rival, the No. 3 US airline, which should snuff out speculation that the fragmented and highly competitive airline industry would undergo a wave of consolidation, according to analysts.
”This probably puts an end to (merger talk),” said airline consultant Michael Boyd. ”There never was any need for airline consolidation.”
Rivals like UAL Corp’s United Airlines and Continental Airlines have also had consolidation talks.
Other airlines reportedly in merger talks include Delta and bankrupt Northwest Airlines Corp. Both carriers, in Chapter 11 since September 2005, have denied the talks and said they plan to exit bankruptcy as stand-alone airlines in the first half of this year.
Delta CEO Gerald Grinstein has said, however, he would not rule out consolidation at a future date with another airline.
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First Published: Thu, Feb 01 2007. 01 16 PM IST