As U.S. airlines revealed their third-quarter results last week, it became apparent that one major airline is ready to think about mergers and consolidation - and two other big carriers would rather not.
Richard Anderson, newly named chief executive of Delta Air Lines Inc., told analysts that he expects the "evolution toward a more consolidated industry will continue.
"I would even say that it makes sense, and it could make sense for Delta if it is done thoughtfully from a position of strength and is in the long-term best interest of Delta's shareholders and its employees," Mr. Anderson said. "As a result, we are evaluating the best path forward for Delta."
Mr. Anderson's predecessor, Gerald Grinstein, vigorously fought off a takeover launched by US Airways Group Inc. and its CEO, Doug Parker. But Mr. Grinstein retired Sept. 1 after leading Delta out of nearly two years in bankruptcy court, and Mr. Anderson made it clear that Delta is ready to play.
Not sounding so eager were the CEOs of two competitors, Continental Airlines Inc. and American Airlines Inc., who said they'll be ready, if not necessarily willing, when the next round of consolidations and mergers starts up.
"My view on consolidation remains what it's been, which is that if the industry stays as it is, we are very well positioned for the future," Continental chairman and CEO Larry Kellner said.
"If things start to change, we will look at all the alternatives and do what's best for our shareholders and communities we serve, my co-workers, every stakeholder," he said.
When an analyst asked AMR Corp. and American Airlines chairman and CEO Gerard Arpey about consolidation, Mr. Arpey focused on the problems that mergers can bring rather than the potential benefits.
"Historically there have been a lot of obstacles to airline industry consolidation," including labor issues, governmental approvals "and the amount of liquidity you need to make these complex mergers a success," he said.
"Now whether or not those will remain obstacles for us or other carriers, I'm not prepared to elaborate on, but those are historic considerations that have contributed to the airline industry being in the condition it is today," he said.
Mr. Parker of US Airways and UAL Corp. chairman and CEO Glen Tilton have advocated mergers in the industry, and many on Wall Street would like to see consolidation as a way to boost profits, stock prices and investment advising fees.
Most carriers are also facing pressure, or at least questions, about selling off some of their businesses, such as their regional carriers in the case of American and Delta or the frequent-flier programs, a newly hot idea among some investors.
When executives talk to analysts, the impatience can come through in the questioning, as happened on the AMR earnings call after Mr. Arpey and chief financial officer Thomas W. Horton discussed their thinking on spinning off parts of AMR.
"Gerard, maybe it's just me, but there just doesn't seem to be much of a sense of urgency," JP Morgan analyst Jamie Baker told Mr. Arpey. "Perhaps that's just my own flawed interpretation, but I'm sure at least some of your stakeholders would agree with me."
