Wiskey Driver
Return of the Hub Raider
- Joined
- Aug 31, 2002
- Posts
- 1,308
Pilot union chief skeptical about US Airways bid
By RUSSELL GRANTHAM
The Atlanta Journal-Constitution
Published on: 11/22/06
The takeover fight between Delta Air Lines and US Airways heated up Tuesday
as both companies rallied employees to their causes and the head of Delta's
powerful pilots union said a merger "appears to lack any substantial
benefit."
At Delta, which is trying to fend off US Airways' takeover attempt, safety
manager Christopher Muise handed employees red buttons that declared "Keep
Delta My Delta."
"These things are going over like crazy," said Muise, who helped hand out
5,000 of the buttons at the airline's headquarters and at Atlanta's
Hartsfield-Jackson International Airport until they ran out.
He said an employee group, the Delta Board Council, came up with the idea
after US Airways unveiled plans last week to take over Delta in a merger
deal valued at roughly $8.8 billion. Delta management has so far rejected
the deal, but creditors and the judge in its Chapter 11 case will have the
final say.
"We're doing this to show unity and support that we want Delta to remain in
Delta control," said Muise, a member of the council, which represents
employees as nonvoting members of Delta's board of directors.
He said the council has ordered 50,000 more buttons as well as 30,000
wristbands and 30,000 stickers.
Meanwhile, Tempe, Ariz.-based US Airways declared in a one-page newsletter
to its employees that it's got a better merger plan than any stand-alone
recovery Delta can craft.
"Delta's stand-alone plan - no matter how good it may be - cannot possibly
offer an expanded route network, more destinations and a better frequent
flier program," US Airways said in the newsletter, called "For the Record."
It also touted reaction to its buyout proposal on Wall Street, where both US
Airways shares and Delta bond values are up since the offer was announced.
US Airways' public takeover bid - which followed private offers that were
rebuffed - proposes to give Delta's creditors $4 billion in cash and roughly
$4.8 billion worth of US Airways stock, while cutting overall flying by the
combined airlines by about 10 percent. America West took over US Airways as
it exited a Chapter 11 reorganization in September 2005 and assumed its
name.
Executives at Delta, which entered Chapter 11 proceedings about the same
time, have said they will present a reorganization plan to creditors next
month to remain independent. Some insiders and experts expect the company to
be worth about $10 billion to $12 billion if it emerges next year from
bankruptcy as a stand-alone airline.
Delta's units of the Air Line Pilots Association, which represents
6,000-plus pilots and is also one of the airline's larger creditors, weighed
in Tuesday with a letter raising concerns about US Airways' proposal.
"Should this merger be as misguided and as poor an idea as I currently
believe it to be, then I will deploy every available resource to stop it,"
union Chairman Lee Moak wrote in a letter posted on the union's Web site.
Moak, who had previously remained mum on the issue, stopped short of saying
he opposed US Airways' bid. However, he voiced skepticism about several
aspects of a merger and said it could fail to pass federal regulators'
scrutiny, delay Delta's exit from bankruptcy, cost Delta pilots jobs, and
deliver less financial benefit than advertised.
Moak said "we find ourselves in the unusual ... position of being on common
ground with our management as our company comes under assault."
The pilots' union, which has a $2.1 billion claim stemming from the pilots'
pay cuts and other concessions in April, holds a seat on the court-appointed
creditors committee that will be looking at both US Airways' and Delta
management's proposals.
By RUSSELL GRANTHAM
The Atlanta Journal-Constitution
Published on: 11/22/06
The takeover fight between Delta Air Lines and US Airways heated up Tuesday
as both companies rallied employees to their causes and the head of Delta's
powerful pilots union said a merger "appears to lack any substantial
benefit."
At Delta, which is trying to fend off US Airways' takeover attempt, safety
manager Christopher Muise handed employees red buttons that declared "Keep
Delta My Delta."
"These things are going over like crazy," said Muise, who helped hand out
5,000 of the buttons at the airline's headquarters and at Atlanta's
Hartsfield-Jackson International Airport until they ran out.
He said an employee group, the Delta Board Council, came up with the idea
after US Airways unveiled plans last week to take over Delta in a merger
deal valued at roughly $8.8 billion. Delta management has so far rejected
the deal, but creditors and the judge in its Chapter 11 case will have the
final say.
"We're doing this to show unity and support that we want Delta to remain in
Delta control," said Muise, a member of the council, which represents
employees as nonvoting members of Delta's board of directors.
He said the council has ordered 50,000 more buttons as well as 30,000
wristbands and 30,000 stickers.
Meanwhile, Tempe, Ariz.-based US Airways declared in a one-page newsletter
to its employees that it's got a better merger plan than any stand-alone
recovery Delta can craft.
"Delta's stand-alone plan - no matter how good it may be - cannot possibly
offer an expanded route network, more destinations and a better frequent
flier program," US Airways said in the newsletter, called "For the Record."
It also touted reaction to its buyout proposal on Wall Street, where both US
Airways shares and Delta bond values are up since the offer was announced.
US Airways' public takeover bid - which followed private offers that were
rebuffed - proposes to give Delta's creditors $4 billion in cash and roughly
$4.8 billion worth of US Airways stock, while cutting overall flying by the
combined airlines by about 10 percent. America West took over US Airways as
it exited a Chapter 11 reorganization in September 2005 and assumed its
name.
Executives at Delta, which entered Chapter 11 proceedings about the same
time, have said they will present a reorganization plan to creditors next
month to remain independent. Some insiders and experts expect the company to
be worth about $10 billion to $12 billion if it emerges next year from
bankruptcy as a stand-alone airline.
Delta's units of the Air Line Pilots Association, which represents
6,000-plus pilots and is also one of the airline's larger creditors, weighed
in Tuesday with a letter raising concerns about US Airways' proposal.
"Should this merger be as misguided and as poor an idea as I currently
believe it to be, then I will deploy every available resource to stop it,"
union Chairman Lee Moak wrote in a letter posted on the union's Web site.
Moak, who had previously remained mum on the issue, stopped short of saying
he opposed US Airways' bid. However, he voiced skepticism about several
aspects of a merger and said it could fail to pass federal regulators'
scrutiny, delay Delta's exit from bankruptcy, cost Delta pilots jobs, and
deliver less financial benefit than advertised.
Moak said "we find ourselves in the unusual ... position of being on common
ground with our management as our company comes under assault."
The pilots' union, which has a $2.1 billion claim stemming from the pilots'
pay cuts and other concessions in April, holds a seat on the court-appointed
creditors committee that will be looking at both US Airways' and Delta
management's proposals.
