In an astonishing move, US Airways Group Inc. has offered $8 billion bid to buy its strong competitor Delta Airlines on Wednesday, if the merger goes on as planned then US Airways would become one of the worlds largest carriers. However, Delta was not interested in the merger but US Airways is appealing directly to the creditors.

The US Airways claims that the merger would reduce unprofitable flying and improve the mix of traffic.
According to the offer conditions, Delta Creditors would get $4 billion in cash and also receive 78.5 million shares of US Airways stock, with an estimated cost $4 billion based on 15th, Nov closing Stock price. Delta is currently operating under bankruptcy protection, This would help a process that will give Delta management control over any plan to get out of bankruptcy.

However, Lee Macenczak, Delta’s Executive Vice President Sales and Consumer Services told to CNN in an interview:

Currently the Delta team is focused on getting the airline out of bankruptcy and getting ourselves restructured as a stand-alone carrier. That has been our singular focus and will continue to be so.

Industry’s analysts believe that the move can ignite competing bids in big giants to consolidate the industry. Ray Neidl, aviation expert with Calyon Securities said:

My main question mark is if the politicians and regulators would allow it to happen, because if it did it would probably set off a trend for industry consolidation.

Delta, which had started as a crop duster, is now the biggest carrier at Fort Lauderdale-Hollywood International Airport, carrying 2.2 million passengers daily and has had 14.8 percent of the traffic during January to August. US Airways is the forth-largest carrier, with 25 daily flights and 1.6 million passengers. The airlines with over 35,000 employees, firmly believe that merger will boost at least $1.65 billion in annual savings.

Via: cnn44267