Why DCI shouldn't want this merger.

[737 Pylt]

Some highlights from the conference call.......

The main cost savings come from a 10% cut is asms. 10% of combined companies, not just delta.

Next biggest area of saving will be through the return of aircraft to lessors. Only aircraft named was the 50 seat rj. Said leases already done would not be redone, but lessors would have a chance to remarket aircraft overseas at higher rates.

Said wages would go up to highest common denominator across all employee groups, with a cost of 90,000,000. With at least 90,000 employees, that's not much upside for employees.

Said no layoffs.

Mentioned all hubs and intention to operate all. Less small jets.

Divest one of the shuttles. did not say which.

3-4% decrease in capacity, increases revenues 10%.

1.65 billion in annual synergies. Half through capacity reduction. half through IT, overhead, facilities.

22 billion in debt total.

Only aircraft issue is 777 vs a330. Both are small fleets, only one going forward. Other fleets are big enough to be efficient.

Us Airways felt there would be 16 billion in unsecured claims. That number is higher number, because more money may go to lessors as airplanes are returned. The 8 billion offer means UNSECURED CREDITORS GET 50% on the dollar, that's Delta.

Delta just received judge's ok to be in control until 15 feb, not much Us Airways can do until then, except float the offer to the creditors(US).

Parker(Us Airways' CEO) said this could open up other offers from and for other airlines.

A key statement was "CREDITOR'S COMMITTEE WILL MAKE THE DECISIONS."


Review the US Air investors presentation on the SEC website. Take a look at US Air's "COMBINED CAPACITY RATIONALIZATION BY 10%" statement. Then read that US Air's boss said that they would mostly reduce the combined fleet by rejecting current leases on the equipment they want to get rid of. No doubt one of the reasons why he also stated that this deal must be completed prior to exiting BK.

Go to the SEC website and reviewed DAL's most recent 10-K filing and take a look at DAL's fleet numbers and Delta's fleet total is 607 aircraft, including 83 leased CRJ-100/200's. If you add US Air's fleet of 357 aircraft to DAL's 607 we get 964 aircraft, of which Comair's 83 LEASED RJ's equal roughly 9 percent.

Further review of the Investors Presentation yielded the following efficiencies noted "UGRADE SMALLER GAUGED REGIONAL JETS TO LARGER AND MORE EFFICIENT EQUIPMENT"

Could it be that US Air is planning on sending the 83 leased Comair RJ's back to the leaseholders? It would help to solve Gerry Grinstein's problem that no one wants to buy Comair.

--------------------------------------------------------------------------------------------------------
Then there's this.............

Mike Boyd, an aviation industry consultant with The Boyd Group, said he thinks there is only a small chance that US Airways' bid would be successful.

"But if this deal does go down, Comair's dead," Boyd said. "US Airways has made it very clear that in its current system it has too many 50-seat jets, and they probably wouldn't want Comair's," Boyd said."

Not good for CMR!

737

 

[John Pennekamp]

Some highlights from the conference call.......

The main cost savings come from a 10% cut is asms. 10% of combined companies, not just delta.

Next biggest area of saving will be through the return of aircraft to lessors. Only aircraft named was the 50 seat rj. Said leases already done would not be redone, but lessors would have a chance to remarket aircraft overseas at higher rates.

Said wages would go up to highest common denominator across all employee groups, with a cost of 90,000,000. With at least 90,000 employees, that's not much upside for employees.

Said no layoffs.

Mentioned all hubs and intention to operate all. Less small jets.

Divest one of the shuttles. did not say which.

3-4% decrease in capacity, increases revenues 10%.

1.65 billion in annual synergies. Half through capacity reduction. half through IT, overhead, facilities.

22 billion in debt total.

Only aircraft issue is 777 vs a330. Both are small fleets, only one going forward. Other fleets are big enough to be efficient.

Us Airways felt there would be 16 billion in unsecured claims. That number is higher number, because more money may go to lessors as airplanes are returned. The 8 billion offer means UNSECURED CREDITORS GET 50% on the dollar, that's Delta.

Delta just received judge's ok to be in control until 15 feb, not much Us Airways can do until then, except float the offer to the creditors(US).

Parker(Us Airways' CEO) said this could open up other offers from and for other airlines.

A key statement was "CREDITOR'S COMMITTEE WILL MAKE THE DECISIONS."


Review the US Air investors presentation on the SEC website. Take a look at US Air's "COMBINED CAPACITY RATIONALIZATION BY 10%" statement. Then read that US Air's boss said that they would mostly reduce the combined fleet by rejecting current leases on the equipment they want to get rid of. No doubt one of the reasons why he also stated that this deal must be completed prior to exiting BK.

Go to the SEC website and reviewed DAL's most recent 10-K filing and take a look at DAL's fleet numbers and Delta's fleet total is 607 aircraft, including 83 leased CRJ-100/200's. If you add US Air's fleet of 357 aircraft to DAL's 607 we get 964 aircraft, of which Comair's 83 LEASED RJ's equal roughly 9 percent.

Further review of the Investors Presentation yielded the following efficiencies noted "UGRADE SMALLER GAUGED REGIONAL JETS TO LARGER AND MORE EFFICIENT EQUIPMENT"

Could it be that US Air is planning on sending the 83 leased Comair RJ's back to the leaseholders? It would help to solve Gerry Grinstein's problem that no one wants to buy Comair.

--------------------------------------------------------------------------------------------------------
Then there's this.............

Mike Boyd, an aviation industry consultant with The Boyd Group, said he thinks there is only a small chance that US Airways' bid would be successful.

"But if this deal does go down, Comair's dead," Boyd said. "US Airways has made it very clear that in its current system it has too many 50-seat jets, and they probably wouldn't want Comair's," Boyd said."

Not good for CMR!

737

Why does the prospect of fellow pilots losing their jobs make you so giddy? Sometimes I agree with you, but sometimes you're just pathetic.

 

[General Lee]

Anyone know who are some of the largest creditors on the comittee? Boeing, ALPA, and the PBGC. Does Boeing want to give DL, an all Boeing airline, over to USAir which is mostly Airbus? Would ALPA cut their own throats (don't answer that, but in reality, no)? The PBGC wants to get paid back for what it lost, period. Just something to think about.


Bye Bye--General Lee

 

[John Pennekamp]

Anyone know who are some of the largest creditors on the comittee? Boeing, ALPA, and the PBGC. Does Boeing want to give DL, an all Boeing airline, over to USAir which is mostly Airbus? Would ALPA cut their own throats (don't answer that, but in reality, no)? The PBGC wants to get paid back for what it lost, period. Just something to think about.


Bye Bye--General Lee

That and the considerable route overlap in the Northeast will evoke the ire of anti-monopoly democrats in congress.

 

[YourPilotFriend]

As long as the DOJ approves this it's a done deal. The creditors just got a huge christmas present; they may get their money back. Comair and Mesa are going to be in a world of hurt as well.

 

[bvt1151]

The General and 737_Pylt will take any chance they can get to point out how somebody's worse off than they are. Funny thing is, they're just as screwed as the rest of us! Comair has had liquidation hanging over its head so long, we're completely numb to it. I'd be willing to bet the General's pending 5 for 1 merger is affecting him a bit more these days, which is why you're seeing these kind of threads.

If its bad for you, you could always tell someone they've got it worse to make you feel better, right? Unfortunately he didn't take into account that it doesn't get much worse at Comair.

Whatever floats your boat, I guess.

 

[YourPilotFriend]

Why does the prospect of fellow pilots losing their jobs make you so giddy? Sometimes I agree with you, but sometimes you're just pathetic.

The jobs are lost at the regionals, that is a very good thing. The larger jets allow for more revenue to the mainline offering higher pay to pilots during bargaining time. A regional is 11-16 cents a mile to operate, a mainline on the same route is 8-11 cents a mile; as long as they can fill the seats.

 

[John Pennekamp]

The General and 737_Pylt will take any chance they can get to point out how somebody's worse off than they are. Funny thing is, they're just as screwed as the rest of us! Comair has had liquidation hanging over its head so long, we're completely numb to it. I'd be willing to bet the General's pending 5 for 1 merger is affecting him a bit more these days, which is why you're seeing these kind of threads.

If its bad for you, you could always tell someone they've got it worse to make you feel better, right? Unfortunately he didn't take into account that it doesn't get much worse at Comair.

Whatever floats your boat, I guess.

It is kind of funny that we only see The General in situations like these lately...

 

[General Lee]

As long as the DOJ approves this it's a done deal. The creditors just got a huge christmas present; they may get their money back. Comair and Mesa are going to be in a world of hurt as well.

It is a bit more complicated than that. Here is the WSJ article descibing the process:

Bankruptcy Court Can Be Tough
Venue for Hostile Takeovers
By MARIE BEAUDETTE and LAURA MCGANN
November 15, 2006 4:20 p.m.

US Airways Chief Executive Doug Parker faces a major handicap in his $8 billion bid to acquire unreceptive Delta Air Lines Inc.: Bankruptcy courts tend to be poor staging grounds for hostile takeovers.

Unless Delta's management can be persuaded to go along with the deal or its creditors stage a revolt in the bankruptcy court, US Airway's bid is a longshot, bankruptcy experts said Wednesday. Delta has exclusive control over its Chapter 11 case through at least early February, and bankruptcy courts seldom overrule management when things are going smoothly.

Mr. Parker "basically lobbed this Hail Mary pass up in the air to see who's going to catch it," said Fulbright & Jaworski partner William Rochelle. "To be able to have a prayer for success, he's got to be able to generate interest from creditors."

Mr. Rochelle, who represents secured creditors in airline bankruptcy cases, said Parker chose the "least offensive method" to persuade Delta to accept its proposal. Rebuffed by Delta's management, he decided to publicly court the carrier's unsecured creditors, who stand to gain a 45% stake in what would be one of the world's largest airlines.

But Mr. Parker, the America West chief who took the helm of US Airways when it merged with the Arizona-based carrier last fall, could be in for a bumpy ride as he attempts to take over a company protected by the bankruptcy court.

"If management is hostile to the US Airways proposal, US Airways may find it difficult to force its way into the room," said Reed Smith bankruptcy partner Eric Schaffer, who worked on US Airways' first Chapter 11 case. US Airways emerged from its second bankruptcy reorganization in 2005.

Ray Neidl, an airline analyst with Calyon Securities Inc., said convincing Delta's major creditors will be crucial if US Airways wants this deal to work.

"If the creditors see a better proposal, then the management would probably have to listen to them," he said.

Resisting Us Airways' Advances

For now, Delta is still resisting US Airways' advances. Chief Executive Gerald Grinstein responded Wednesday with a terse statement, making it clear that the company still plans to move forward with a stand-alone reorganization and that it intends to invoke its control over its Chapter 11 case to do so.

"The bankruptcy court has granted Delta the exclusive right to create a plan of reorganization until Feb. 15, 2007," he said. "We will continue to move aggressively toward that goal."

Delta, the nation's fourth largest airline, sought Chapter 11 protection on Sept. 14, 2005, about a month before changes to the Bankruptcy Code that sharply curbed debtor control in Chapter 11 cases took effect. Accordingly, the airline can expect to continue to drive its own reorganization process even beyond the current Feb. 15 plan filing deadline.

Companies in Chapter 11 protection are given an exclusive period of time to file a Chapter 11 reorganization plan, but can seek extensions if negotiations with creditors are moving forward. Although last year's bankruptcy law changes limit those to a maximum of 18 months, Delta could potentially enjoy unlimited extensions -- as did UAL Corp., the parent of United Airlines, which spent more than three years in bankruptcy.

Creditors can seek to end a company's exclusive control over its Chapter 11 case so they can file their own reorganization proposals. But bankruptcy experts say Delta's creditors would face an uphill battle wresting control from a team of competent executives managing a viable company.

Over the last year or so, Delta has negotiated deals to terminate its pilots' pension plan, obtained $280 million in annual wage-and-benefit concessions from its pilots, and said it's "on track" to exit Chapter 11 proceedings by the middle of 2007. The airline has also recalled 1,000 flight attendants in preparation for a major expansion of its international routes.

"Bankruptcy courts don't terminate exclusivity easily or quickly," Mr. Rochelle said. "It takes a lot of banging on the door before things happen."

In the absence of a deal with management, convincing a pivotal group of unsecured creditors -- the official committee that represents them in the airline's Chapter 11 case -- will be key.

The panel, formed early in every Chapter 11 case and usually made up of the largest unsecured creditors, has significant influence in a bankruptcy case and can be instrumental in swaying the court to second-guess a debtor company's business judgment.

The Delta committee, which includes aircraft financier Boeing Capital Corp., the federal Pension Benefit Guaranty Corp., Bank of New York Co. and the Air Line Pilots Association, hasn't yet shown its hand. Calls to committee members and the attorney who represents them weren't returned Wednesday.

US Airways could choose to buy Delta's unsecured claims in order to gain a foothold in the case and command the committee's attention, a move potential buyers often employ in smaller Chapter 11 cases.

For example, the hedge fund Harbinger Capital Partners forced an exclusivity battle in the bankruptcy of West Coast jewelry chain Crescent Jewelers and ultimately won control of the company post-bankruptcy. Harbinger later merged the company with another company it bought out of Chapter 11 -- East Coast chain Friedman's Inc.

Financier Ron Burkle's Yucaipa Cos. has bought up unsecured debt of rival auto-hauling companies Allied Holdings Inc. and Performance Transportation Services Inc., which are both operating under Chapter 11 protection, and is expected to attempt to merge them post-bankruptcy.

US Airways, whose smooth merger last fall with America West had management backing, has the experience of two past Chapter 11 cases as it moves forward with its proposal.

The airline could ally itself with other major creditors to force Delta -- or the Manhattan bankruptcy court -- to move toward a merger.

"Management will have to consider what the creditors want," Mr. Neidl said. "It's the most important element of the company now, and they'll at least have to listen to their opinion."

But Mr. Rochelle of Fulbright & Jaworski said he'd be surprised if Delta and its major creditors "ran off in different directions."

He also questioned whether US Airways' Mr. Parker, widely regarded as a savvy executive who saved his airline from extinction, would want to be the architect of a deal built on a bitter battle between Delta and its creditors.

"I don't know whether Doug Parker would want to do it on a highly adversarial basis," Mr. Rochelle said. "That would really not create the kind of an effective working environment you need to integrate three airlines.



Bye Bye--General Lee

 

[General Lee]

It is kind of funny that we only see The General in situations like these lately...

Wrong, I slam SkyWest all the time. It is easy. I have stopped slamming Comair as much, since that is such a sad case.


Bye Bye--General Lee

 

[~~~^~~~]

IMHO - this deal is DOA, but it will get others looking up Delta's assets.

If something like this was going to be tried, the time to have acted was 14 months ago. These days it is looking possible (maybe probable) that Delta will recover. The whole public announcement is "sour grapes" from an Airline Manager who sees that DL is in a position to kick some US/AWA butt.

Some 50 seat RJ's are going away. Not all, but some. As long as they can profitably bring people into Delta's hubs the General and 737 should LUV 50 seaters.

Further, this merger, if it were to happen, might just result in mainline pilot groups getting to play the whipsaw game. Notice that US Air and AWA airlines are not anywhere near merged yet.

 

[imacdog]

Not good for CMR!

737

Maybe you don't realize this but no one at Comair cares anymore. Thanks for pointing out the obvious though.

 

[General Lee]

IMHO - this deal is DOA, but it will get others looking up Delta's assets.

If something like this was going to be tried, the time to have acted was 14 months ago. These days it is looking possible (maybe probable) that Delta will recover. The whole public announcement is "sour grapes" from an Airline Manager who sees that DL is in a position to kick some US/AWA butt.

Some 50 seat RJ's are going away. Not all, but some. As long as they can profitably bring people into Delta's hubs the General and 737 should LUV 50 seaters.

Further, this merger, if it were to happen, might just result in mainline pilot groups getting to play the whipsaw game. Notice that US Air and AWA airlines are not anywhere near merged yet.

Very true fins. But just look again at how long it has taken to integrate the AWA and US groups.....it won't be done for a long time. And they want to merge again? Parker will have to show his own results with his current airline to the creditors, and it hasn't gone that smooth so far. It was easier to do the AWA/US merge, since there was little overlap, and the planes were very close in type. Not with DL. Good try. There may be others looking at DL now, but the overwhelming stock increase for LCC yesterday shows Wall St. thought $8 billion would have been a bargain, or cheap. That means we are worth more in their eyes, which will attract more investors for our own exit financing.

Bye Bye--General Lee

 

[~~~^~~~]

That means we are worth more in their eyes, which will attract more investors for our own exit financing.

Bye Bye--General Lee

Darn good point that no one else has mentioned.

 

[737 Pylt]

Why does the prospect of fellow pilots losing their jobs make you so giddy? Sometimes I agree with you, but sometimes you're just pathetic.

Hey prick, where in my post did you get that I was "giddy" about it??
Maybe you should stop being such an ass for a second, and you'll probably realize that! If you'll re read ANY number of posts, while I may or may not like anyone, finding joy in the fact someone loses their job is pretty pathetic. Maybe its YOU that finds joy in that!

737

 

[John Pennekamp]

Hey prick, where in my post did you get that I was "giddy" about it??
Maybe you should stop being such an ass for a second, and you'll probably realize that! If you'll re read ANY number of posts, while I may or may not like anyone, finding joy in the fact someone loses their job is pretty pathetic. Maybe its YOU that finds joy in that!

737

Maybe someone worthy of a double breasted jacket and Delta wings would be intelligent and verbose enough to discuss something without shouting obscenities. You're embarassing your fellow pilots again.

And yes, you CONSTANTLY point out the misfortunes of regional pilots, so that leads me to believe you enjoy it.

 

[SKYWRJGUY]

Only 15 years to break even on the deal. Hm, didn't debt put DAL and the old USAir in bankruptcy to being with? I know a good forward-looking strategy, less used leveraged buyouts moving forward--I saw the UAL CEO mentioned that the other day too--growth by debt. Cool.

 

[737 Pylt]

Maybe someone worthy of a double breasted jacket and Delta wings would be intelligent and verbose enough to discuss something without shouting obscenities. You're embarassing your fellow pilots again.

So on one side of your nut drainer you complain about shouting obscenities, and have no problem doing some insulting yourself!? I guess I could expect nothing less from some little prick with almost 4 posts per day!
I think YOU'RE the one embarassing your fellow pilots cheif!

And yes, you CONSTANTLY point out the misfortunes of regional pilots, so that leads me to believe you enjoy it.

I guess if I had an inferiority complex like you bragging about how "you're the captain," I might assume that as well!
Adios sport!

737

 

[John Pennekamp]

So on one side of your nut drainer you complain about shouting obscenities, and have no problem doing some insulting yourself!? I guess I could expect nothing less from some little prick with almost 4 posts per day!
I think YOU'RE the one embarassing your fellow pilots cheif!


I guess if I had an inferiority complex like you bragging about how "you're the captain," I might assume that as well!
Adios sport!

737

Congratulations. You topped your last post on stupidity. Going to try for the trifecta?

 

[xjlifer]

The above post's are why I am SOOOO glad I did not pay 10$ for F.I.

 

[737 Pylt]

Congratulations. You topped your last post on stupidity. Going to try for the trifecta?

How about this, you seem to want to get the last word, and insult in, so, here you go, perfect opportunity to prove my point!

737

 

[Snapperhead]

This board is unfriggin' believable! Can we please stop bashing the snot out of each other, and get back to the topic at hand?

I believe that mergers are not good for anyone involved except for the lawyers. They'll get paid like kings while the employees will suffer like peons. I've already been through one Chapter 11 and merger. It wasn't pretty unless you were one of the lawyers or the CEO (read Bill Compton).

 

[michael707767]

Further, this merger, if it were to happen, might just result in mainline pilot groups getting to play the whipsaw game. Notice that US Air and AWA airlines are not anywhere near merged yet.

which is one reason I agree with you that this merger is DOA. Parker has not even shown he can complete one merger yet, let alone a combination of three airlines. The creditors will see this and realize they stand to make more money with a stand alone Delta.

Of course another, larger, bid could appear.

 

[SBD]

So my question is, if the merger does go through, "When will Comair hand me pink slip?" Anyone with an ounce of credibility have an idea? Hold on this is Flightinfo everyone's credit rating is in the tank. Good luck to everyone who is possibly involved.

 

[GOTAFLY]

I think the general is in wishful thinking mode. The reason I beleive LCC stock increased so much is investors believe in there management team. Remember the anylist all thought the airways merger was a very bad idea. There stock before the announced DAL merger had more than double even with some of the hang ups they have incountered with the ingration. I think people are looking in the past to dictate what future mergers will look like, times have changed and only time will tell.

 

[VeeOne]

Does anybody remember that this is almost EXACTLY how the buyout started with Piedmont in 1987- the most expensive buy out in airline history. I'd actually give this fair odds- if someone doesn't offer more for Delta.

 

[wms]

This message is hidden because 737 Pylt is on your ignore list.

 

[SKYWRJGUY]

Apparently, the General feels threatened by any other pilot who he may encounter--low self-esteem probably. Why else would he act the way he does for no apparent reason, other than to get himself off? Other than his conjecture for entertainment purposes, don't think much of what he says has any validity or reliability to it, other than its high correlation to all the other crap he spews. Go fly, stop typing.

 

[General Lee]

Apparently, the General feels threatened by any other pilot who he may encounter--low self-esteem probably. Why else would he act the way he does for no apparent reason, other than to get himself off? Other than his conjecture for entertainment purposes, don't think much of what he says has any validity or reliability to it, other than its high correlation to all the other crap he spews. Go fly, stop typing.

Huh? I feel great. I enjoy my job, and I enjoy this forum. I just see what SkyWest has done to the regional industry and laugh. Were you guys in Chap 11 at the time, with a judge looking over you? No. You gave away the farm (and everyone else's farm) for the potential upgrades, which were there anyway). You agreed to fly up to 99 seats for 50 seat pay (the analogy for us with the 757 and 767 pay being the same doesn't work---since we brought the 757 pay UP TO the 767 pay), and you screwed everyone in the process. You can't defend yourself because your "association" is chosen by management. Any truth to that? Yeah, that is what I thought. Look in the mirror, buddy.


Bye Bye--General Lee

 

[Gobi Gred]

Can you find another reason to bash SkyWest other than the 99 seats for 50 pay thing? I don't really care if you bash on SkyWest or the pilots, (sometimes I do and I work there) but please pick a new reason other than that one. But I quess if I wanted to have 7,413 posts under my belt I'd have to beat more than one dead horse too.