Both Delta Air Lines and US Airways are rumored to be exploring some sort of consolidation with American Airlines. During separate fourth-quarter earnings calls with analysts and media Wednesday, Delta management batted away all questions on the topic, while US Airways CEO Doug Parker confirmed that, yes, the carrier is exploring its options, that nothing is imminent and, although US Airways has long been a proponent of M&A, that the carrier does not "need" to participate in what may or may not be the next round of industry consolidation.
Here's everything Parker had to say about it during the call today:
I know part of the reason for the speculation has been US Airways' historical comments on consolidation and being such proponents of consolidation. The fact is we have been on record for a long time about the need for this industry to start earning a fair return on invested capital, and we've been on record that one of the ways to fix this problem is through consolidation. That being said, the reality is a large amount of consolidation has already occurred in our business. We have a much less fragmented industry than we did when we merged America West and US Airways in 2005, and that industry consolidation has been a major contributor to the improved results that you see today at US airways and throughout our industry.
Furthermore, as today's results show, US Airways does not need to participate in consolidation. Our employees are running a terrific standalone airline, and we're generating financial returns that are similar to or better than our larger peers. We're extremely proud that the hard work of our team has gotten us into a position where we can control our own destiny. We can now decide whether it's best for US Airways to operate as a standalone company or participate in further consolidation over time, and that's what we intend to do.
So, while it's no longer imperative that our industry consolidate, and it's definitely not imperative that US Airways participate in consolidation, we are of course always interested in studying potential value-enhancing opportunities, and part of studying these opportunities is making sure we have good counsel.
Therefore, as has been reported, we have indeed retained Barclays Capital, Millstein & Co and Latham & Watkins to help us explore our options as they relate to AMR's bankruptcy. We expect AMR will remain in bankruptcy for quite some time and therefore we anticipate that we and our advisors will be studying the situation for quite some time. While we're studying this situation we do not expect there will be any major developments, and we certainly have nothing to report today.
And now, for something less long-winded, here's everything Delta had to say about exploring a transaction with American: "We're not going to make any comments on any of the speculation."