US Airways plots Delta merger
17.11.06
US Airways put forward a plan for an $8 billion merger with Delta Air Lines yesterday. The combination would create one of the world's largest airlines and would operate under the Delta name, the proposal said.
If Delta agrees to the deal, the combined airline would serve more than 350 destinations across 5 continents, including North and South America, Europe, Asia and Africa. US Airways believes the combination would generate at least $1.65 billion in annual savings, including $935 million in 'network synergies', mainly from optimisation of the airlines' complementary networks.
A spokesman for US Airways said: 'Customers would benefit from expanded choice as well as the reach and services of a large-scale provider within the cost structure of a low-fare carrier. As a combined company, the enlarged Delta would be the number one airline across the Atlantic and the second largest airline to the Caribbean.'
US Airways chairman and CEO, Doug Parke,r said: 'We believe that the combination of US Airways and Delta, like the US Airways/America West merger we completed in September 2005, is extremely compelling and will create significant value for our stakeholders. The combined company would be a more effective and profitable competitor in the current fragmented marketplace, with the ability to better meet the continuing evolution of the airline industry.'
Delta CEO, Gerald Grinstein, responded to the proposed merger offer, saying: 'We received a letter from US Airways and will of course review it. Our plan has always been to emerge from bankruptcy in the first half of 2007 as a strong, stand-alone carrier. Our plan is working and we are proud of the progress Delta people are making to achieve this objective.'
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