Lucy Nicholson/ReutersDelta and US Airways planes at San Francisco International Airport. Delta may make a bid for its smaller rival.8:46 p.m. | Updated
Delta Air Lines is signaling that the consolidation of the United States airline industry is not over.
Delta, based in Atlanta, is exploring a possible bid to purchase US Airways, a person with knowledge of the matter said on Friday. Delta has not yet approached its smaller rival, said the person, who was not authorized to speak publicly about the matter. And an offer is not certain, the person said.
But Delta’s interest in US Airways comes a few days after both airlines separately began exploring a possible tie-up with American Airlines, which filed for bankruptcy protection in November. The conversations, all at an extremely early stage, demonstrate that the nation’s skies are still ripe for more consolidation.
In the last three years, Delta bought Northwest, United Airlines merged with Continental and Southwest Airlines bought AirTran Airways. Airline executives — including Richard Anderson at Delta and Doug Parker at US Airways — have long pushed for mergers in the fragmented industry, arguing that they were a necessary step to ensure the industry’s financial survival.
With less competition in the industry, airlines have been able to raise fares in recent years. Some consumer advocates and airline analysts said that mergers had also made the industry less competitive on some routes and markets. While the Justice Department has so far approved the mergers, analysts warned that the government might take a closer look at how further consolidation could affect passengers and ticket prices.
Both Delta and US Airways declined to comment. Delta’s interest in US Airways was initially reported in The Wall Street Journal.
In 2006, when Delta itself was in bankruptcy, US Airways made an unsuccessful bid for it. In 2010, US Airways was also in talks to merge with United, but United turned to Continental.
American Airlines is also attracting possible suitors as it goes through bankruptcy. Two people briefed on the matter said earlier this month that Delta, US Airways and TPG Capital, a private equity firm, were all considering bids for AMR Corporation, American’s parent company. Delta has hired the Blackstone Group for this possible bid. Blackstone advised Delta in its own bankruptcy as well as its acquisition of Northwest.