They can deny, deny, deny all they want but when two companies deny merger talks, something is going on. The nation’s number 2 (United Airlines UAUA) and number 3 (Delta Airlines DAL) airlines have been reported to be talking about a merger that would keep the United name, headquarters in Chicago and an Operations Center in Atlanta. The possibly combined company would create the world’s largest airline.
The Associated Press, citing an unnamed source, said the carriers have been in talks for some time, including in the last week or so, and hope to reach a deal soon so that federal regulators can consider it before a new administration enters the White House.
But today both companies came out and said they were not in merger talks. 
Delta: “There have been no talks with United regarding any type of consolidation transaction and there are no such ongoing discussions.”
United: reports of recent talks "wholly inaccurate."
But do any of us actually believe what the airlines say? Just weeks ago, Delta President Ed Bastian said the rise of crude oil and jet fuel prices to near-record levels "changes the model," and that Delta will welcome a merger in which it emerges as an acquiror with little additional debt.
And it is no hidden fact that United Airlines CEO Glenn Tilton is a big fan of industry consolidation. Last week an executive at United said they would be willing to park 100+ aircraft to save on fuel costs.
However given the fact that Delta did not seem so inclined to be a merger partner with US Airways just months ago, it seems like something major would have to change for merger talks between Delta and United to progress.
It is unclear if the deal will progress now that possible details have leaked. It is unclear whether either airline will merge with the other, given the fact that both would prefer to be the company that emerges in charge. And the most important fact is the anti-trust issues that might arise with the combination of the number 2 and number 3 airlines.
Either way, it’s a developing story that warrants watching.
MSNBC.com
ABCNews.com
AJC.com
Comment Preview