By Kyle Peterson and Chris Reiter
WASHINGTON (Reuters) - U.S. airline industry executives are looking forward to the benefits of consolidation as U.S. Airways Group Inc. (LCC.N: Quote, Profile, Research, Stock Buzz) makes a brash attempt to take over larger, bankrupt rival Delta Air Lines Inc.
DALRQ.PK.
Industry executives speaking at the Reuters Aerospace and Defense Summit this week said consolidation would take excess capacity out of the system, allowing them to raise fares and keep the industry's recovery on track. But most were content to leave the painful, complicated mergers to someone else.
"This is still a troubled industry," said Tom Horton, chief financial officer of American Airlines parent AMR Corp. (AMR.N: Quote, Profile, Research, Stock Buzz). "If this Delta-US Air deal were to proceed and were to result in a rationalization of capacity, that could only be healthy for the industry."
US Airways says it could cut capacity -- the number of seats for sale -- 10 percent by merging with Delta. Capacity cuts generally make it easier for airlines to increase ticket prices, assuming competitors don't immediately fill the void.
"I think anytime you talk consolidation you talk capacity reduction. No matter which combination you talk about there is some overlap of routes," said David Neeleman, chief executive of JetBlue Airways.
PICKING UP THE PIECES
Carriers including Southwest Airlines Co. (LUV.N: Quote, Profile, Research, Stock Buzz), JetBlue Airways Corp. (JBLU.O: Quote, Profile, Research, Stock Buzz), and Frontier Airlines Inc. FRNT.O have voiced interest in picking up gates and landing slots that might be shed if US Airways' roughly $8.6 billion bid for Delta goes through. Continued...
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