Joe Budge (W29)
(Top Gun)
11/15/06 05:34 PM
Re: USAir to Buy Delta?

<< Um, wasn't USAir just in bankruptcy? Does this have the potential to result in the airline equivalent of the Penn Central RR? >>

That was my original thought as well, but then I thought better. With the current economic climate airlines are going to keep on going down the tubes until capacity is reduced sufficently for the folks left standing to turn a profit. USAir thinks they can reduce capacity of the combined companies an additional 10% with this merger. That's a step in the right direction - and may help make sure they make the cut. It's kind of like the old story of being chased by the bear - all you have to do is run faster than the other guy. In this immediate case the "other guy" is NWA, also in bankrupcy. But in the longer term, like with Penn Central, it's an open question if that will be enough.

Regards,
Joe



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