The problem with airline mergers is not that people think they’re a bad idea.
Not at all: pretty much every airline-industry executive in America thinks that
consolidation in the industry is inevitable and a great idea in theory. But
the practical obstacles that need to be overcome to effect a successful airline
merger are enormous, and it’s far from clear that a company which can’t even
operate its own flights efficiently will magically acquire the management abilities
needed to merge with a former rival without destroying billions of dollars in
value. So what is Pardus Capital Management achieving by getting
all shareholder-activist on the management of Delta and United, telling
them that they should merge (yes, they know that already), without telling them
how? The Epicurean Dealmaker, for one, would
like to know – and I can assure you that his blog entry is far more
entertaining than Pardus’s letter to Delta.