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Mergers may trouble regional airlines

17 November 2006

Mergers among big U.S. airlines would darken the skies for their smaller, regional partners, analysts said on Thursday.US Airways Group Inc. on Wednesday offered about $8 billion for larger, bankrupt rival Delta Air Lines Inc. The bid is expected to spark consolidation in the U.S. airline industry. If this happens, the big airlines would likely cut capacity, which could in turn reduce their need for feeder service.

After the announcement of US Airways’ offer on Wednesday — which Delta is still considering — the shares of major airlines soared but those of several regional carriers fell, with SkyWest dropping 7.5 percent.

source: Reuters

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