Not All Airline Mergers Make Sense, but This One Does
June 25, 2008; Page A14

In "The Second Death of the U.S. Airlines¹" (Business World, June 18), Holman W. Jenkins, Jr. is correct that fuel prices approaching $140 a barrel present remarkable challenges for the entire industry, but he is wrong in questioning the Delta-Northwest merger -- just because other U.S. airlines were unsuccessful in their merger discussions. The truth is, this merger makes even more sense with oil prices at these record levels.

Last October, as oil prices reached $80 a barrel, both airlines independently reviewed strategic alternatives using a range of fuel assumptions. We came to the same conclusion: The right merger would create a company with the financial and marketing strength to overcome the many challenges facing the industry and also better position the company over the long term.

Reuters - Warren Buffett said growth is slowing and inflation is really heating up, during a CNBC interview on Wednesday.

AP - California's attorney general has filed a civil lawsuit against Countrywide Financial Corp., claiming the mortgage lender used misleading advertising and other unfair business practices to trick borrowers into taking on risky home loans they didn't fully understand.

AFP - The Federal Reserve concludes a meeting on interest rates Wednesday amid heated debate on whether the central bank will be able to keep a lid on inflation and at the same time support a struggling US economy.

Reuters - Durable goods orders held steady last month, but sales of new single family homes fell, government data showed on Wednesday, highlighting a weak economy as the Federal Reserve met to ponder interest rates.

Reuters - A U.S. judge reduced the prison sentences of Adelphia founder John Rigas and his son Timothy after an appeals court threw out one count of their convictions.

Reuters - The U.S. Supreme Court on Wednesday overturned the record $2.5 billion in punitive damages that Exxon Mobil Corp had been ordered to pay for the 1989 Exxon Valdez oil spill off Alaska.

AFP - Europe's main stock markets rose on Wednesday with the focus on the banking sector after Barclays convinced Asian and Middle Eastern investors to snap up new shares being offered by the British lender.

AP - Orders to factories for big-ticket manufactured goods were basically flat in May as strength in demand for aircraft and computers was offset by widespread weakness elsewhere.

Reuters - Stock futures rose on Wednesday as a report showed new orders for long-lasting U.S. manufactured goods were unchanged in May after two consecutive months of decline.