=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/07/26/f= inancial1713EDT0289.DTL ---------------------------------------------------------------------- Friday, July 26, 2002 (AP) Delta considers options in face of United-US Airways partnership JUSTIN BACHMAN, AP Business Writer (07-26) 14:13 PDT ATLANTA (AP) -- Delta Air Lines, long a stalwart of East Coast air travel, may face another threat to its already decimated revenues from a proposed alliance between United and US Airways. Financially struggling US Airways and United want to sell seats on each other's flights in a code-share deal that also would offer frequent-flier mileage on either carrier. The new alliance, announced Wednesday, is far more limited than United's bid two years ago to buy the airline, based in Arlington, Va. But the prospect of passenger siphoning remains a threat to Atlanta-based Delta -- especially since United has a broad network in the West, where US Airways offers little service. The new agreement also offers United access to cities in the Southeast a= nd New England, where its service is sparse. "Today, if someone wanted to go from Charlotte to Tucson, some of those people are sitting on Delta," said Michael Boyd, an aviation consultant in Evergreen, Colo. "So with this (United deal) US Airways is going to retain some of those people." Moreover, Delta officials contend the deal would come at their expense. "The objective of a code share is take revenue from someone else," Delta chairman and chief executive Leo F. Mullin said in an interview with the Chicago Tribune. "Whatever revenue is diverted will be diverted from Delta." Delta officials declined to discuss any response to the US Airways deal. The carrier also has been formulating a new strategy, presented to its board Thursday, to respond to lower-cost carriers such as AirTran Airways, Southwest and JetBlue. No details of that effort have been released. "We're going to look at all our options," Delta spokeswoman Peggy Estes said. Last week, as the company announced a $186 million quarterly loss and warned of weak revenue throughout the year, Mullin said a market-share shuffle will not go unanswered. "Either through alliances of our own or through marketing actions, we wi= ll ensure and stabilize our competitive position and make it stronger," he said. "I think Delta right now appears to be running scared," Boyd said. United, the No. 2 U.S. carrier, and third-place Delta, have had an intense, but cordial, rivalry for years. Delta has largely avoided adding flights at United's Chicago, Denver, Washington D.C. and California hubs, while United keeps its distance in Delta-dominated Atlanta, Cincinnati, Dallas and Salt Lake City. The carriers also allow passengers to earn mileage credits on each other= 's domestic flights and access to their airport lounges. United spokesman Joe Hopkins said Friday that no decisions have been made on how the carrier's US Airways alliance would affect its partnership with Delta. On the Net: www.delta.com www.usairways.com =20 ---------------------------------------------------------------------- Copyright 2002 AP