US Airways Group launched a takeover bid for bankrupt Delta Air Lines on Wednesday, valuing the deal at roughly 8 billion dollars. Delta's leadership quickly signaled it was not interested, reaffirming plans to exit bankruptcy as an independent carrier in the first half of 2007.
Under the proposal, Delta's brand name would be retained, with the combined carrier serving 350 airports across five continents. US Airways said Delta's creditors would receive 4 billion dollars in cash plus approximately 4 billion dollars in US Airways stock, with projected annual savings exceeding 1.65 billion dollars.
If completed, the merger would produce the world's largest airline by paying passenger miles, surpassing American Airlines. US Airways CEO Doug Parker argued consumers would benefit from a full-service network at low-fare cost levels.
US Airways itself emerged from bankruptcy only last year, having merged with America West to rank as the seventh-largest US carrier. Delta, third-largest in the US, sought bankruptcy protection in September 2005.
Wall Street responded positively to the announcement: US Airways shares climbed more than 13 percent to 57.59 dollars, while Delta shares rose 11 percent to 1.63 dollars, a sharp contrast to their near-40-dollar price in 2002.
Historical summary. TurkishPress restated this wire report, first published in November 2006, in its own words.