The Atlanta airline, which emerged from bankruptcy April 30 after a hostile takeover attempt by US Airways Group Inc., said it formed a special board committee to evaluate strategic options "to ensure Delta maintains its leadership position in the airline industry, including potential consolidation transactions."
Delta Chief Executive Officer Richard Anderson said Delta had not held talks with United Air Lines Inc. "regarding any type of consolidation transaction and there are no such ongoing discussions."
The Wall Street Journal reported Anderson had held informal talks about consolidation possibilities with counterparts at United, Northwest Airlines Corp. and other airlines.
Hedge fund Pardus Capital Management LP, which holds 7 million Delta shares and 5.6 million shares in United parent UAL Corp., sent a letter to Delta management Tuesday saying it was "imperative" Delta merge with another airline, "given the rapid rise in fuel prices and the increased risk to the business as a standalone entity."
The letter specifically advocated a Delta-United merger.
Anderson said in a statement that "the right consolidation transaction could generate significant value for our shareholders and employees and that strategic options should be evaluated."
With oil at over $90 a barrel, he said Pardus' analysis "takes on a heightened importance."