Abstract: Recent speculation about a possible merger involving Delta Air Lines Inc. (B/Positive/--) has revived a recurrent airline industry topic. Consolidation has long been suggested as one way to improve the health of the U.S. airline industry. Rationalization of excess capacity and reduction in the number of competitors could correct an imbalance of supply and demand, and improve pricing. Yet the track record of airline mergers is checkered, with few examples delivering on promised benefits. A review of the risks and opportunities associated with such combinations in the past offers clues, but the success or failure of any future merger will depend also on its particular circumstances. Airline mergers have historically been driven by a different rationale than those in most

Brief Excerpt: RESEARCH Ratings Definitions U.S. Airline Mergers Offer Rewards, But Also Large Risks Publication date: 11-Jan-2008 Primary Credit Analyst: Philip Baggaley, CFA, New York (1) 212-438-7683; philip_baggaley@standardandpoors.com Recent...

Report Type: Commentary
Sector: Global Issuers, Structured Finance
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 S&P Credit Research
S&P Credit Research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.