Are Delta And United Talking Mergers? Romantic Dinners? Long Walks On The Beach?

The New York Times tells us that Pardus Capital Management, a hedge fund, has sent a letter to the management of Delta Air Lines asking it to seek a merger with UAL, the parent of United Airlines.

Pardus has Gordon M. Buthane, former CEO of Continental, playing matchmaker for the fund, which says it has “identified $585 million in savings the two big airlines.” The fund owns 2.6% of Delta.

Delta’s CEO Richard “Anybody Wanna Buy An Airline?” Anderson, seemed pleased:

“We appreciate receiving Pardus’s views on the best course for Delta’s future,” Mr. Anderson said in the statement. “We have been consistent in our public statements that Delta believes that the right consolidation transaction could generate significant value for our shareholders and employees.”

He added, “With oil at over $90 a barrel, this analysis takes on a heightened importance.”

United was shy, but open to Delta’s advances:

Jean Medina, a United spokeswoman, said: “We have said for the last four years that we believe consolidation is necessary for the industry, and others independently are reaching the same conclusion. We make decisions in the best interest of United, and we don’t comment on the opinion of one shareholder, or the actions or hypothetical transactions proposed by others.”

US Airways, Doug “I’m OK To Drive” Parker must be jealous. After Delta rejected him last year he was arrested for drunk driving and spent the night in jail.

God, this is so f*cking romantic.

Hedge Fund Seeks Delta-United Deal [NYT]

PREVIOUSLY: Delta CEO On The Prowl For Some Hot Merger Action

Comments

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  1. Consumerist Moderator - ACAMBRAS says:

    I did read that if they do merge, they’ll still use the United brand in Chicago. Think they want to avoid another Marshall Fields -> Macy’s debacle?

  2. holocron says:

    Heh…and I just read that Delta is denying that they are in merger talks with United. Doesn’t mean that they aren’t in merger talks with someone.

  3. MalcoveMagnesia says:

    One thing is for sure: mergers mean more connections (& less hubs), more crowded planes, more misery for passengers & employees alike, and much more expensive tickets because of less competition.

  4. Freedomboy says:

    Surprise surprise.

  5. Neurotic1 says:

    “Jean Medina, a United spokeswoman, said: “We have said for the last four years that we believe consolidation is necessary for the industry, and others independently are reaching the same conclusion.”

    …read: We have said for the last four years that competition and our lack of managerial skills have cut deeply into our profit margin. Let’s merge, raise prices, offer less services, and stick it to the consumers.

  6. TWinter says:

    Well, how bad this is for consumers depends a bit on whether you take a short or long-term view.

    In the short term, prices will rise, which is bad.

    In th long term, fewer traditional carriers should result in better profits for the remaining airlines, which would give them money to buy new planes, new airport facilities, and hire enough employees to run everything. Let’s face it, having all the airlines teetering at the brink of bankruptcy does not result in good customer experiences.

  7. crnk says:

    another day, another hedge fun announcing that they’d like an airline to merge.
    Tomorrow, my name is daffy duck!

  8. tadowguy says:

    This will surely create a vortex of suck that might destroy the universe.