Three weeks ago, I suggested that creditors might force Delta Air Lines to merge with US Airways
I think that's nuts. How, exactly, would an antitrust review add risk? Were a deal to be denied by the Feds, the situation would be the same as it is today: Delta flying solo.
I also fail to see the problem with extending bankruptcy. United parent UAL
No doubt some will argue that a deal with US Airways was bad from the start. For the record, I agree. Even though overlapping routes and massive layoffs would have provided billions in cost savings, there's still a labor schism between the former employees of USAir and America West. Adding Delta's workers to the mix could have proven too toxic to produce the profits US Airways CEO Doug Parker imagined.
But that's US Airways. What's wrong with a deal with Northwest? How about nothing? Remember, for all that's great about Delta -- and there's plenty -- it's still the No. 3 carrier domestically. Furthermore, the airline has nowhere near the global reach of United or AMR's
Alas, Delta's now left where it was before US Airways came calling: as a high-rent legacy carrier with empty pockets and a dwindling array of profitable domestic routes. Do you really believe that's a business worth your investment? Not me.
Prepare for take-off with related Foolishness:
- Neither does Foolish colleague David Lee Smith.
- 2006 was a good year for airline stocks. How about 2007?
- Airline CEOs, we have a modest proposal for you.
Fool contributor Tim Beyers has 31 picks in his Motley Fool CAPS portfolio, including UAL, which he believes will outperform the S&P 500. He doesn't, however, have real money in the airline or in the stocks of any of the other firms mentioned in this article. Get an inside peek at all the stocks Tim does own by checking his Fool profile. The Motley Fool's disclosure policy is always on time for departure.