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IPFS News Link • Transportation: Air Travel

Delta eyes American Airlines bid

Delta Air Lines is eyeing a bid for bankrupt rival American Airlines, a source close to the matter said on Thursday, despite doubts that the proposed mega-carrier would win regulatory approval.

Atlanta-based Delta, the world's second largest airline after recently merged United-Continental, has enlisted investment firm Blackstone to craft a potential bid, the source said.

American Airlines declared bankruptcy in November, as it struggled to slash its debt burden and costs.

Bankruptcy, a common tactic in the airline trade, was invoked to offer more legal room for maneuver to renegotiate or cancel service and wage contracts.

But some observers were doubtful that any link between Delta and American would pass muster with US aviation watchdogs.

"We are skeptical on both the merits of any potential acquisition by Delta, which we do not think needs to get larger, or by the ability of such a deal to pass regulatory scrutiny," said Jim Corridore, an airline analyst with S&P Capital IQ. 

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