Delta Air Lines plans to ask its board for permission to begin formal merger talks with both Northwest Airlines and United Airlines parent UAL, aiming to ultimately choose between the two carriers.
Delta, which emerged from bankruptcy last spring after rebuffing a hostile takeover offer by US Airways Group, set up a special board committee months ago to help it review its strategic options, including mergers.
Jean Medina, a spokeswoman for UAL, which has been a vocal proponent of airline mergers, said UAL¡¯s position on the need for consolidation generally in the industry is well known.
A deal between Delta and either airline would likely create the world's largest carrier, overtaking AMR¡¯s American Airlines. An acquisition of either airline by Delta would be worth at least US$3.5 billion, based on current market values.
It is estimated that a combination with Northwest would net the combined carrier $1.5 billion in savings by combining smaller hubs, but it would not expand the network to the same extent as a Delta-United deal.
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