Delta considers buying American Air parent

FORT WORTH, Texas, Jan. 13 (UPI) -- Delta Air Lines Inc. and U.S. private-equity firm TPG Capital are mulling separate bids for the parent company of American Airlines, two newspapers reported.

Delta has hired the Blackstone Group, which advised Delta on its 2005 bankruptcy and its 2008 takeover of Northwest Airlines Inc., The Wall Street Journal and New York Times reported.

AMR filed for bankruptcy-court protection Nov. 29 and is in the process of restructuring its debt and cutting labor costs.

US Airways Group Inc. has also been reported considering an AMR takeover.

Delta, the world's largest airline, has run an analysis of whether regulators would sign off on it absorbing American and concluded regulators would probably approve the takeover if Delta made concessions, the Journal said. These could include labor and ticket-pricing concessions and commitments to ensure continued service in weak markets.

TPG Capital of Fort Worth, Texas, where American Airlines and AMR are based, would want to work with a strategic partner for a possible investment, people familiar with the matter told the Journal. TPG, which has airline-industry expertise, has approached AMR about its interest, they said.

TPG has not yet outlined its plan to a bankruptcy court but is expected to present its strategy in the next few months, the Times said.

None of the companies cited in the reports had any comment.

An American Airlines purchase would have to be reviewed by the creditors' committee and approved by a judge.

Analyst Ray Neidl of the Maxim Group told the Times he thought a deal with Delta was a "remote" possibility. But he said breaking up and selling the airline's various parts would be an alternative.