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February 22, 2005

Why no airline M&A?

Amey Stone

A note popped up in my BusinessWeek email box from longtime reader and source Sheldon Liber, of Capital Innovations in Santa Monica. The subject heading was "Still no airline M&A and AMAZED."

Sheldon has been after me for a while now to write a story about why there isn't more consolidation in the troubled airline industry. It's a good question and one I don't know that answer to. Anyone have any thoughts on the topic?

Here's an excerpt from Sheldon's note last week:

"It is STILL amazing to me that the software, medical, financial, insurance, media and telecom industries are all merging rapidly, yet airlines prefer to die on the vine.

They should get together with the NHL Players Union. Given recent events, maybe that will be the BIG story...... 'NHL Players Union to merge with three crumbling airlines to form Puck Airlines. The merger is seen as a way to cut costs by canceling games and flights, and then their competitors by threatening to sit still and do nothing.'

Maybe this piece should be written in MAD magazine instead of a business journal."

Thanks for writing Sheldon!

11:06 AM

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