Standard & Poor's Sees 'Window of Opportunity' for Airline Industry Consolidation
NEW YORK (AP) - The airline industry faces a "window of opportunity" to consolidate after years of financial struggles, according to a Standard & Poor's analyst.
Following US Airways Group Inc.'s hostile bid for bankrupt Delta Air Lines Inc., S&P analyst Philip Baggaley said he expects to see a series of mergers at some point, likely in the next year or two.
In a note to clients, he points to the success of the US Airways' combination with America West as an example of how acquiring a bankrupt company that has reorganized can provide more synergies. (America West bought US Airways in a reverse merger last year and kept the latter's name.)
He also noted that some airlines may view the current Department of Justice, which reviews mergers, as more willing to approve big combinations than would a future DOJ under a different administration.
"Lastly, the present industry environment is relatively favorable, so that acquiring airlines are in better financial shape to undertake a merger than has been the case since the late 1990s," Baggaley wrote.
Regards,
USA320Pilot
NEW YORK (AP) - The airline industry faces a "window of opportunity" to consolidate after years of financial struggles, according to a Standard & Poor's analyst.
Following US Airways Group Inc.'s hostile bid for bankrupt Delta Air Lines Inc., S&P analyst Philip Baggaley said he expects to see a series of mergers at some point, likely in the next year or two.
In a note to clients, he points to the success of the US Airways' combination with America West as an example of how acquiring a bankrupt company that has reorganized can provide more synergies. (America West bought US Airways in a reverse merger last year and kept the latter's name.)
He also noted that some airlines may view the current Department of Justice, which reviews mergers, as more willing to approve big combinations than would a future DOJ under a different administration.
"Lastly, the present industry environment is relatively favorable, so that acquiring airlines are in better financial shape to undertake a merger than has been the case since the late 1990s," Baggaley wrote.
Regards,
USA320Pilot
