Delta Airlines (NYSE:DAL) has reportedly engaged Blackstone (NYSE:BX) to help it in its bid to pick up bankrupt American Airlines, which would make it the largest carrier in the country. Another serious bidder is rumored to be private equity firm TPG Capital, a seasoned veteran in airline investing. According to Bloomberg News, US Airways (NYSE:UAL) may also throw its hat in the ring.

It’s early days yet in American’s Chapter 11 proceedings, and a key issue hinges on its pension plan, which it may or may not terminate. The company is attempting to restore viability by reducing labor costs through renegotiation with its various work force components. The company’s claim that it overpaid on its pension costs compared to other airlines has been challenged by the Pension Benefit Guaranty Corporation—apparently Delta paid far higher pension costs than pre-bankruptcy American Air.

“American should have to prove in court that this drastic step is necessary,” said Joshua Gotbaum, the pension benefits agency director.

Here’s how airline stocks are reacting to the news:

Delta Air Lines Inc. (NYSE:DAL): DAL shares recently traded at $8.75, down $0.12, or 1.35%. They have traded in a 52-week range of $6.41 to $12.81. Volume today was 4,336,007 shares versus a 3-month average volume of 11,151,800 shares. The company’s trailing P/E is 16.51, while trailing earnings are $0.53 per share.

United Continental Holdings (NYSE:UAL): UAL shares recently traded at $18.48, down $0.05, or 0.27%. They have traded in a 52-week range of $15.51 to $27.72. Volume today was 2,009,077 shares versus a 3-month average volume of 5,778,160 shares. The company’s trailing P/E is 10.61, while trailing earnings are $1.74 per share.

Southwest Airlines Co. (NYSE:LUV): LUV shares recently traded at $8.84, down $0.13, or 1.45%. They have traded in a 52-week range of $7.15 to $13.26. Volume today was 947,252 shares versus a 3-month average volume of 7,667,200 shares. The company’s trailing P/E is 45.10, while trailing earnings are $0.20 per share.

JetBlue Airways Corporation (NASDAQ:JBLU): JBLU shares recently traded at $5.50, down $0.08, or 1.43%. They have traded in a 52-week range of $3.49 to $6.89. Volume today was 906,434 shares versus a 3-month average volume of 5,947,800 shares. The company’s trailing P/E is 23.01, while trailing earnings are $0.24 per share.

US Airways Group, Inc. (NYSE:LCC): LCC shares recently traded at $6.03, down $0.02, or 0.33%. They have traded in a 52-week range of $4.53 to $11.28. Volume today was 3,303,154 shares versus a 3-month average volume of 6,726,700 shares. The company’s trailing P/E is 12.01, while trailing earnings are $0.50 per share.

To contact the reporter on this story: Brooke Edge at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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