Analysts Think Carrier Could Kick Off Wave Of Consolidation

Atlanta-based Delta Air Lines has put its plans to sell off problematic regional subsidiary Comair on hold, renewing rumors about a looming merger between Delta and a carrier-to-be-named-later -- but strongly believed to be either Northwest or United.

Citing unnamed sources, the Financial Times reports Delta conducted preliminary talks with JPMorgan Chase regarding its options for Comair, but opted to hold off retaining the firm until a special committee of Delta directors and bankers has completed a review of the airline's merger options.

That doesn't mean Delta isn't interested in selling off Comair, though. "The sale of Comair is not imminent, but our position hasn't changed in that we are always looking to maximize the value of our assets," the airline said.

Analysts widely believe the US airline industry is moving towards consolidation... and many feel Delta will lead the charge.

As ANN reported, the November 2007 rumor of a looming merger between Delta and United -- later found to have been planted by an investment group with stakes in both airlines -- sent the industry into a brief frenzy, as officials with both carriers denied holding talks.

Delta CEO Richard Anderson -- who, incidentally, once held that same title at Northwest -- said last year he saw benefits in consolidation, a marked departure from his predecessor. Former Delta chief Gerald Grinstein, who led the carrier through its battle to emerge from Chapter 11 bankruptcy, also fought off a dogged hostile takeover attempt by US Airways.

Should Delta enter into a merger with one of the other five "legacy" US airlines, analysts believe at least two remaining carriers will also choose their partners, as it were -- which could make 2008 a banner year for airline buyouts.

FMI: www.delta.com, www.comair.com, www.united.com, www.nwa.com