In case the brain trust at Delta had the idea that the folks at US Airways were going to pack up their tent to begin 2007 and go elsewhere — it doesn’t look like that is going to happen. Just the opposite.

Monday, US Airways added Morgan Stanley to its stable of financial backers for the proposed $7.2 billion debt deal. Morgan Stanley joins Citibank in agreeing to provide financing for the deal, although, according to the Financial Times, Morgan Stanley will not, apparently, be acting in an advisory capacity on the deal. In addition, the airline received permission to bring on a third financial entity to the mix, if necessary.



This is the equivalent of dragging out the heavy artillery folks. Never hurts to have more financial firepower than you need, and it would seem US Airways has now beefed up its financial resources sufficiently to increase its offer for Delta, if the need arises. It also shows the clout and support this deal has on the Street.

Meanwhile, over Christmas, it was announced that Delta’s creditor committee had hired former Continental Chairman and CEO Gordon Bethune to advise them on the deal. Reuters reported today that Bethune met with the committee today and that he is also scheduled to meet with them on Wednesday.

Interesting. Delta and Gordon. You may recall that it was Continental management who accused management at Delta of suffering from “box of rocks” thinking in a previous round of merger mania a few years ago.