Airline merger predictions from Forbes - TravelMole


Airline merger predictions from Forbes

Saturday, 17 Aug, 2005 0

Forbes predicts a raft of mergers in the U.S. airline industry.

Airline bankruptcies are awash with a filing by Delta Air Lines and Northwest Airlines appearing imminent, joining already bankrupt US Airways Group and United Airlines.

Things will not get better for these airlines with increased competition, lowering yields to 28% below 2000 levels, and sky rocketing fuel costs.

This time the government and banks are in mood to save these airlines, leading to what Forbes’ money managers, analysts and former executives to predict a wave of consolidation.

Forbes’ airline combination predictions are:

UAL and Continental Airlines – Forbes and its experts pick this as the best match of all the major U.S. carriers, with Continental bringing strong Latin American and U.S. East Coast routes to United’s strong domestic U.S. and Asia Pacific route system and one of the best management teams.

American Airlines and Northwest Airlines – If Continental and United were to merge, American, who is not currently interested in any mergers, would have no choice but to rethink its position. Northwest’s brings to American its missing routes to the Far East.

Delta and Northwest – While both of these airlines are in dire financial straights together, the airlines could leverage their partnerships with Air France-KLM  and Sky Team Airline Alliance.  The combined carrier would have a stronger regional, national and international platform.



 

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Charles Kao



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