Consolidation Stays on the Runway

Expectations of airline merger mania may be overblown. Local opposition, antitrust laws, and issues of control may keep airlines taxiing

For years, pundits have predicted a sweeping wave of consolidation in the airline business that would pare down the roughly 130 carriers that now fly the U.S. skies to a smaller group of companies. When US Airways Group (LCC) announced a hostile bid for Delta Air Lines in mid-November, it looked as if the long-awaited day of consolidation might finally occur (see, 11/16/06, "Delta Creditors Man the Cockpit"). And published reports on Dec. 13 that United Airlines (UAUA) and Continental Airlines (CAL) were also in talks further fed speculation that merger mania was now at hand.

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