-- US Airways CEO Doug Parker, whose bold bid last year to take over Delta Air Lines dal was rebuffed, says the diminished value of Atlanta-based Delta makes its merger with another carrier likely.
"I don't think Delta has any choice at this point on consolidation but to follow through" by pairing with another airline, Parker said during a conference call Thursday regarding Arizona-based US Airways' lcc own $79 million fourth-quarter loss.
Delta's market value is less than half of what its managers last year argued their company would be worth on a stand-alone basis when Parker, on behalf of US Airways, attempted to buy Delta.
Delta's shareholders "deserve better," Parker said. Now, new CEO Richard Anderson, has "to go create value through a merger."
If Delta does agree to merge, "All the big sticks in the industry" will jump on the consolidation bandwagon, Parker said. He declined to discuss US Airways' merger prospects.
Faced with Parker's offer, then-CEO Gerald Grinstein convinced creditors that Delta would be better off on its own after exiting Chapter 11 bankruptcy, and said it would be worth as much as $12 billion — more than US Airways was offering. Delta now has a market value of about $4.3 billion.
Under its new management, Delta appears to be in merger discussions. The airline hasn't confirmed that publicly, but Northwest nwa pilots union chief Dave Stevens told Bloomberg News this week that managers at his airline have told the union Delta is talking about possible mergers with Northwest and United uaua.
"Delta's board is reviewing our strategic options," said spokeswoman Betsy Talton, declining to comment further.
Parker is a longtime believer in mergers as a way of bringing consistent profitability back to the airline business. The current US Airways was formed in 2005 when the Parker-led America West acquired the old Virginia-based US Airways, then in Chapter 11.