CHICAGO, Jan 31 US Airways Group Inc. withdrew a $ 9.8 billion bid for bankrupt Delta Air

CHICAGO, Jan 31 (Reuters) US Airways Group Inc. withdrew a $9.8 billion bid for bankrupt Delta Airlines on Wednesday, taking pressure off rival carriers to consolidate.

US Airways, the No. 7 U.S. airline, voided the offer after Delta's official creditors committee said it will instead support Delta's plan to exit Chapter 11 as a stand-alone company.

''We would have created a better and more financially stable airline that offered more choice to consumers and increased job security to its employees,'' US Airways Chief Executive Doug Parker said in a statement.

Shares of US Airways were up 2 percent, while Delta fell 4 percent.

The termination of the bid marked the end of US Airways' 11-week effort to acquire its larger rival, the No. 3 U.S.

airline, which should snuff out speculation that the fragmented and highly competitive airline industry would undergo a wave of consolidation, according to analysts.

''This probably puts an end to (merger talk),'' said airline consultant Michael Boyd. ''There never was any need for airline consolidation.'' Rivals like UAL Corp's United Airlines and Continental Airlines have also had consolidation talks.

Other airlines reportedly in merger talks include Delta and bankrupt Northwest Airlines Corp.. Both carriers, in Chapter 11 since September 2005, have denied the talks and said they plan to exit bankruptcy as stand-alone airlines in the first half of this year.

Delta CEO Gerald Grinstein has said, however, he would not rule out consolidation at a future date with another airline.

MERGER DREAMS ''(US Airways shares) popped because now management can concentrate on running the basics,'' said Ray Neidl, airline analyst at Calyon Securities. ''They're looking forward to a very good year.'' US Air posted fourth-quarter profit of $12 million on Tuesday.

Its CEO, Parker, has said if the Delta bid failed, US Airways would remain independent. He said he has no other merger targets in mind.

Boyd, the consultant, said US Airways, formed in 2005 from a merger with America West, should focus on completing its ongoing integration.

''They've still got to get the last merger done. They've got a lot of debt issues, a lot of (information technology) issues,'' said Boyd. ''They've got a lot on their plate. It's not like they're bored.'' Although US Airways could still pursue a deal for Delta, Parker has said he would not extend the deadline or pursue a merger with Delta if the company exits bankruptcy as an independent company.

Airline consultant Stuart Klaskin of KKC Aviation remained unconvinced US Airways will abandon its consolidation dreams.

''I personally think they are going to turn their attention very rapidly to other markets,'' he said. ''If I were the management team at Northwest Airlines, I would be awaiting the call from Parker.'' Delta shares dropped 5 cents to $1.11 in over-the-counter trading, while US Air rose $1.01 to $54.11 on the New York Stock Exchange.

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