But Talks May Be Stalled Between Airlines

While there's been precious little in the way of actual news over the past week regarding a said-to-be-imminent merger between Delta Air Lines and Northwest Airlines, a third carrier is watching for signs of progress with bated breath.

AirTran Airways CEO Bob Fornaro said a Delta/Northwest union could be good news for the low-cost carrier... especially if the combined airline scaled back operations at one or more hubs. In particular, Fornaro said, a merger could free up more gates for his airline in Atlanta, which is the main hub for both Delta and Orlando, FL-based LCC.

AirTran has coveted more gates at Atlanta for years... and if Delta/NWA merger happened, AirTran could gain access to Northwest's gates at the airport, reports the Atlanta Journal-Constitution.

"We would try to make the case that we should get those gates," Fornaro said. AirTran could benefit from the merger in other ways, as well, if federal regulators forced the combined carrier to cut back routes, or shed assets.

The CEO's comments came Tuesday, as AirTran reported a fourth-quarter loss. AirTran posted a $2.2 million loss, as rising fares couldn't combat skyrocketing fuel prices. Northwest reported a similar situation; the Eagan, MN-based airline reported a net loss of $8 million for the final three months of 2007.

As for a rumored Delta merger, official news remains scarce... but if you believe the ever-popular "unnamed sources" cited by numerous publications, talks between Delta and United Airlines appear to be inactive. If true, the news wouldn't surprise many analysts... who favored a merger between Delta and Northwest over a United deal for several reasons -- including logistical, labor, and regulatory concerns.

There's reportedly some concern, however, over the progress of talks between Northwest and Delta. Last week, several sources reported talks were stalled between the two parties, over who would run the combined company.

"I think Delta has the upper hand here, but Northwest probably disagrees," CreditSights analyst Roger King told The Detroit Free-Press.

This may be the time for Delta CEO Richard Anderson to call in some favors, and bank on old business relationships. After all, one of Anderson's lieutenants during his tenure as CEO at Northwest was Doug Steenland... Northwest's current CEO.

FMI: www.delta.com, www.nwa.com, www.airtran.com