Today's Wall Street Journal  reports that merger talks between US Airways and United Airlines have intensified and that "a deal could emerge in as soon as 10 days, according to people familiar with the matter."

Read more about it from Forbes.

Over the weekend Continental Airlines officially rejected the idea of merging with United. Now, United is reportedly discussing a merger with US Airways. The New York Times  writes, "...a United-US Airways deal has already been turned down once by the Bush administration, in 2001, when the Justice Department vowed to sue if the merger went through. The prospect prompted them to call it off. That was before the industry was pummeled by a wave of bankruptcy filings, including two at US Airways and another at United, and soaring fuel prices. Those fuel costs were a main reason cited by Delta and Northwest for their merger."

Meanwhile the Wall Street Journal  reports that "the average cost of airline tickets in the U.S. was up 10.2% last month compared with a year ago..." The papers goes on to write, "Many in the industry hope mergers can eliminate seats and competitors and give airlines even greater pricing power."

Big, powerful lobbyist are now on the Delta payroll. Their job—convince Washington that a Delta/Northwest merger is a good idea. This news comes from this morning's Atlanta Journal-Constitution.

The paper writes, "Among those lined up are two of the best known former lawmakers in the lobbying world — Trent Lott of Mississippi, who until recently was the second highest-ranking Republican senator, and his new lobbying partner, former Democratic Sen. John Breaux of Louisiana."

After months and months of speculation, talk and hesitation, Delta and Northwest have done the deed: they're merging. In the process they're creating the world's largest airline. The news came this evening at 7:00 central time. The big question now: what does it mean for us? Consider our situation: Delta provides our service to Atlanta and Cincinnati. Northwest provides our service to Minneapolis, Memphis and Detroit. That's five of our 12 destinations. We will be affected. The question is how— good or bad?

Early details indicate the Northwest name is history. A Delta press release says:

"The new airline, which will be called Delta, will provide employees with greater job security, an equity stake in the combined airline, and a more stable platform for future growth in the face of significant economic pressures from rising fuel costs and intense competition. Small communities throughout the United States will enjoy enhanced access to more destinations worldwide."

 "Small communities" would be us. This quote implies that the combined network of the two airlines (meaning all the different places that they currently fly), will benefit us. The Delta PR department is working overtime. Check out this web page–it says, "Missouri will benefit from single carrier access to over 390 worldwide destinations." That's good to hear, but I'm from Missouri: Show-Me.

The timing of this merger is likely based on a couple of things: 1) the price of oil recently breaking the $100 a barrel barrier, and 2) they want to get the deal done before the November general election–if the Democrats capture the White House, a merger is less likely to be approved (or so the thinking goes). But even with a Republican administration currently in control, there is obvious concern that the Department of Justice won't approve the deal. Check out this web page; among other things it says, "Contact your elected officials. Let them know that you are in favor of this airline merger and that we need their support."

So what does this news mean for us right now? Not much. Assuming this deal is approved by the feds, it will take months to find out how we're affected. 

Read this story from Reuters for early deal details. Meanwhile, rumor has it that a United/Continental merger is close to announcement...