NWA hires M&A team Delta bid expected

[YourPilotFriend]

Here it comes General Lee.

 

[lowecur]

be careful what you wish for

Northwest has chosen Evercore, the New York based boutique bank run by Roger Altman, a former senior Treasury official, to study its options. In a court filing, Northwest specifically refers to the possibility of an "M&A transaction" as an outcome of the process.

Some observers believe that Northwest could bid for Delta, which is much larger, with the backing of a private equity group.

The bankers at Evercore that will be working with Northwest are Mr Altman and William Hiltz, who advised on the reorganisation of CAL in the early 1990s but is otherwise best known as an energy banker. Also on the deal team is David Ying, co-head of the firm's restructuring business.

"Evercore's work will be focused on broad strategic alternatives in the airline industry generally and is not related to aircraft financing, the debtor's finances or other day-to-day restructuring work being performed by Seabury [a management consulting adviser]", Northwest said in a filing.

Evercore will receive an upfront fee of $275,000, a monthly retainer of $75,000, a $3m fee when Northwest emerges from bankruptcy and $2m if it closes an "M&A transaction".

US Airways claimed on Thursday that its proposed merger with Delta would create "the most profitable airline in the world", as it provided fresh details on the unsolicited $8.7bn bid launched last month.

This is a prudent move by NWA, as UAL has already retained Goldman. If DL would rather dance with NWA, I will sit back and get a good laugh on the integration of seniority. This could actually be a more profitable airline than the one proposed by US Air. If this get's legs, US will turn to UAL.

imp:​

 

[YourPilotFriend]

Delta will dance with NWA on the merger, trust me.

 

[General Lee]

As long as Oberstar approves, DL would probably dance with them before USAir, with all of that overlap.


Bye Bye--General Lee

 

[JetMonkey]

I wasn't aware a company in bankrupt could put in a bid for something. I suppose you can try to do anything as long as the end results equal "black" and your creditors approve. BTW anyone know who the creditors for NWA are?

 

[m80drvr]

Let me get this straight. LCC bid for DAL everyone gets their panties in a wad. NWA may be thinking the same thing and it looks okay.

I would assume that the DAL boys will not get the "highest" contract that Parker has promised. NWA mgt is ruthless, I would assume you would be forced to negotiate starting from NWA's current contract. That would be fun.

May I suggest that the DAL boys get their heads out of the sand and realize that they will be bought at some point. Now might be the time to play nice with the management that will treat you the best. NWA management is not the group that you want running the show. They will rape your contract in the courts then outsource your flying to a "new" airline with pilots from the "old" airline, at about 50% pay. I don't think even the Generals "friendly" Bankrupcy judge would save wour contract.



Don't believe me? Stop a NWA guy in the terminal and ask.

 

[On Your Six]

Let me get this straight. LCC bid for DAL everyone gets their panties in a wad. NWA may be thinking the same thing and it looks okay.

I would assume that the DAL boys will not get the "highest" contract that Parker has promised. NWA mgt is ruthless, I would assume you would be forced to negotiate starting from NWA's current contract. That would be fun.

May I suggest that the DAL boys get their heads out of the sand and realize that they will be bought at some point. Now might be the time to play nice with the management that will treat you the best. NWA management is not the group that you want running the show. They will rape your contract in the courts then outsource your flying to a "new" airline with pilots from the "old" airline, at about 50% pay. I don't think even the Generals "friendly" Bankrupcy judge would save wour contract.



Don't believe me? Stop a NWA guy in the terminal and ask.

Based on what? Delta is on track to get out of bankruptcy and it has been profitable - $52 Q3 profit. It is adding more lucrative international routes and reducing domestic capacity on routes that should lead to higher yields. Why does DAL HAVE TO BE ACQUIRED? It does not. It could easily be a standalone carrier and do well going forward once out of bankruptcy (where it is successfully restructuring its leases and contracts). Delta does not absolutely need a partner to succeed in the future.

Now, merging with NWA makes a lot more sense than merging with USAirways from a strategic standpoint. Better and more complementary routes (NWA has Asia and upper Midwest US which Delta has Europe, South America, Salt Lake and East Coast). It does not have the domestic route overlap that you find with USAirways - that's just a joke. Parker gets an $8 billion check from Citigroup and he thinks he can buy an airline while he is having problems integrating his own mess. NWA might work strategically - and with big private equity money it could potentially happen. We'll see if the politicians and unions agree...

 

[General Lee]

Let me get this straight. LCC bid for DAL everyone gets their panties in a wad. NWA may be thinking the same thing and it looks okay.

I would assume that the DAL boys will not get the "highest" contract that Parker has promised. NWA mgt is ruthless, I would assume you would be forced to negotiate starting from NWA's current contract. That would be fun.

May I suggest that the DAL boys get their heads out of the sand and realize that they will be bought at some point. Now might be the time to play nice with the management that will treat you the best. NWA management is not the group that you want running the show. They will rape your contract in the courts then outsource your flying to a "new" airline with pilots from the "old" airline, at about 50% pay. I don't think even the Generals "friendly" Bankrupcy judge would save wour contract.



Don't believe me? Stop a NWA guy in the terminal and ask.

I believe NWA management wants OUT. Steinland wants his lake house and to go away. If this is all about overlap, this could work. USAir and AWA had virtually NO overlap, and it was ALLOWED by the Gov't. That is how it works. NWA and DL have good route structures that would complement each other. Northwest's DC9s need replacing, and Boeing would love to offer an order. If we HAD to merge with someone, NWA would be my guess, because of the lack of overlap. But, Oberstar is a congressman from MN, and he would look at it very closely.


Bye Bye--General Lee

 

[YourPilotFriend]

Let me get this straight. LCC bid for DAL everyone gets their panties in a wad. NWA may be thinking the same thing and it looks okay.

I would assume that the DAL boys will not get the "highest" contract that Parker has promised. NWA mgt is ruthless, I would assume you would be forced to negotiate starting from NWA's current contract. That would be fun.

May I suggest that the DAL boys get their heads out of the sand and realize that they will be bought at some point. Now might be the time to play nice with the management that will treat you the best. NWA management is not the group that you want running the show. They will rape your contract in the courts then outsource your flying to a "new" airline with pilots from the "old" airline, at about 50% pay. I don't think even the Generals "friendly" Bankrupcy judge would save wour contract.



Don't believe me? Stop a NWA guy in the terminal and ask.

The US/Delta is a huge loser as far as the company goes for everyone. The routes will be opened up to the LCC's and capacity nightmare would result.

NWA/Delta is a winner on all fronts, it will even lower fares hurting the LCC's.

 

[lowecur]

As long as Oberstar approves, DL would probably dance with them before USAir, with all of that overlap.


Bye Bye--General Lee

That's funny. You are more concerned with overlap than your own contract. The relationship between NWA mgt and it's employees is Ripley's Believe it or Not! Both groups are hard ass megalomaniacs that don't like or trust one another. DP would be a tea party compared to that group. Can you imagine DL trying to integrate with Attila & the Huns?

Now if the savings are that great and NW mgt is willing to offer a contract that would outweigh the inconvenience, then yes, let the party begin.

Oh, and fleet differential! What do you think DL? Does the new entity go Boeing or Airbus.

imp:​

 

[YourPilotFriend]

I wasn't aware a company in bankrupt could put in a bid for something. I suppose you can try to do anything as long as the end results equal "black" and your creditors approve. BTW anyone know who the creditors for NWA are?

The banks.

 

[YourPilotFriend]

That's funny. You are more concerned with overlap than your own contract. The relationship between NWA mgt and it's employees is Ripley's Believe it or Not! Both groups are hard ass megalomaniacs that don't like or trust one another. DP would be a tea party compared to that group. Can you imagine DL trying to integrate with Attila & the Huns?

Now if the savings are that great and NW mgt is willing to offer a contract that would outweigh the inconvenience, then yes, let the party begin.

Oh, and fleet differential! What do you think DL? Does the new entity go Boeing or Airbus.

imp:​

Airbus for the narrowbody, boeing for the widebody. Air France wants to own a NWA/Delta. It will have as much control in it as possible.

 

[On Your Six]

That's funny. You are more concerned with overlap than your own contract. The relationship between NWA mgt and it's employees is Ripley's Believe it or Not! Both groups are hard ass megalomaniacs that don't like or trust one another. DP would be a tea party compared to that group. Can you imagine DL trying to integrate with Attila & the Huns?

Now if the savings are that great and NW mgt is willing to offer a contract that would outweigh the inconvenience, then yes, let the party begin.

Oh, and fleet differential! What do you think DL? Does the new entity go Boeing or Airbus.

imp:​

Didn't NWA just order a bunch of 787s? I suppose the proposed combined carrier could replace CRJs with NWA's huge batch of DC9-10s and 30s...

 

[General Lee]

Northwest has chosen Evercore, the New York based boutique bank run by Roger Altman, a former senior Treasury official, to study its options. In a court filing, Northwest specifically refers to the possibility of an "M&A transaction" as an outcome of the process.

Some observers believe that Northwest could bid for Delta, which is much larger, with the backing of a private equity group.

The bankers at Evercore that will be working with Northwest are Mr Altman and William Hiltz, who advised on the reorganisation of CAL in the early 1990s but is otherwise best known as an energy banker. Also on the deal team is David Ying, co-head of the firm's restructuring business.

"Evercore's work will be focused on broad strategic alternatives in the airline industry generally and is not related to aircraft financing, the debtor's finances or other day-to-day restructuring work being performed by Seabury [a management consulting adviser]", Northwest said in a filing.

Evercore will receive an upfront fee of $275,000, a monthly retainer of $75,000, a $3m fee when Northwest emerges from bankruptcy and $2m if it closes an "M&A transaction".

US Airways claimed on Thursday that its proposed merger with Delta would create "the most profitable airline in the world", as it provided fresh details on the unsolicited $8.7bn bid launched last month.

This is a prudent move by NWA, as UAL has already retained Goldman. If DL would rather dance with NWA, I will sit back and get a good laugh on the integration of seniority. This could actually be a more profitable airline than the one proposed by US Air. If this get's legs, US will turn to UAL.

imp:​

A good laugh on the integration of seniority? We are both ALPA, and thanks to our 2300 captains leaving a couple years back, it would likely be a percentage merger. If you are in the 50% range at DL, you would be in the 50% range of the new company. That is how it would work. Do you laugh a lot by yourself? A Dr. Evil laugh?


Bye Bye--General Lee

 

[General Lee]

Airbus for the narrowbody, boeing for the widebody. Air France wants to own a NWA/Delta. It will have as much control in it as possible.

Nah, to allow this to happen Boeing would have to say YES (along with DALPA) on the Creditor Committee. So, NW would have say YES to a Boeing order to replace the DC9s. Airbus would have NO say.


Bye Bye--General Lee

 

[NuGuy]

Heyas,

Personally, I think DAL/NWA is a loser, although somewhat better than DAL/AAA.

Besides PW commonality with the 757, here's what you get:

An overtaxed airport and a poor hub, both infested with an LCCs (ATL, SLC). Another marginal hub and haphazard European route structure that was inherited from another bloated airline.

CAL is a much better fit. Lock up the Pacific, north and south, superstrong on the East Coast to Europe with a hub that you control, additional hubs in uncontested cities (DTW/MSP) and bottle up the midwest. DAL would be stuck in its hole in ATL, UAL would still be gasping for east coast feed like they've done for the last 20 years and AMR would be locked out of the Pacific. What's not to like?

Nu

 

[General Lee]

Heyas,

Personally, I think DAL/NWA is a loser, although somewhat better than DAL/AAA.

Besides PW commonality with the 757, here's what you get:

An overtaxed airport and a poor hub, both infested with an LCCs (ATL, SLC). Another marginal hub and haphazard European route structure that was inherited from another bloated airline.

CAL is a much better fit. Lock up the Pacific, north and south, superstrong on the East Coast to Europe with a hub that you control, additional hubs in uncontested cities (DTW/MSP) and bottle up the midwest. DAL would be stuck in its hole in ATL, UAL would still be gasping for east coast feed like they've done for the last 20 years and AMR would be locked out of the Pacific. What's not to like?

Nu

I think you are incorrect. NWA and DL is a lot better. The ATL hub is the strongest hub in the world, and SLC has only SW has competition, which doesn't cover many of our routes anyway. DL owns 75% of ATL, and it handles more pax than anyone.

While CAL and NW may be a good fit, also, they (CAL) may want UAL. That is more likely. The "hole" you call ATL is better than Detoilet any day. ATL is the most effiecient hub in the woirld, with less wx delays and more operations. But, you knew that. What was that about "snow town, mo-town, and no town" about your hubs?


Bye Bye--General Lee

 

[LandGreen]

I think you are incorrect. NWA and DL is a lot better. The ATL hub is the strongest hub in the world, and SLC has only SW has competition, which doesn't cover many of our routes anyway. DL owns 75% of ATL, and it handles more pax than anyone.

While CAL and NW may be a good fit, also, they (CAL) may want UAL. That is more likely. The "hole" you call ATL is better than Detoilet any day. ATL is the most effiecient hub in the woirld, with less wx delays and more operations. But, you knew that. What was that about "snow town, mo-town, and no town" about your hubs?


Bye Bye--General Lee

I think a NWA/DAL integration would be easier than a DAL/USAIR...with all the overlap at USAIR, they are bound to get rid of pilots.

How many pilots is NWA retiring??

 

[General Lee]

I think a NWA/DAL integration would be easier than a DAL/USAIR...with all the overlap at USAIR, they are bound to get rid of pilots.

How many pilots is NWA retiring??

Well, Duane Woerth should be retiring here shortly, and that means atleast one.....


Bye Bye--General Lee

 

[~~~^~~~]

Northwest has chosen Evercore....Evercore will receive an upfront fee of $275,000, a monthly retainer of $75,000, a $3m fee when Northwest emerges from bankruptcy and $2m if it closes an "M&A transaction".

Where do managers get the idea that spending this kind of money on consultants is smart? What could they possibly do to earn that fee - other than reciprocate by awarding huge fees and golden parachutes to the directors and managers at the airlines involved. This is old fashioned corruption.

 

[NuGuy]

I think you are incorrect. NWA and DL is a lot better. The ATL hub is the strongest hub in the world, and SLC has only SW has competition, which doesn't cover many of our routes anyway. DL owns 75% of ATL, and it handles more pax than anyone.

Meh, it may own %75 of ATL, but it has zero pricing power. As they say, they lose money on every seat, but try to make it up on volume.

The "hole" you call ATL is better than Detoilet any day. ATL is the most effiecient hub in the woirld, with less wx delays and more operations.

Hmmm, all I can say is ...ahahahahahah. I think I flew from MEM to ATL and back three times on one leg, and the sun was out. Been to DTW lately? How's this for an innovation. 2 sets of parallels where you DON'T have to cross another runway. But lookie that, you made me gush like a airliners.net noob.

Yea, I got a bud who lives in ATL. 60 minutes to anywhere in traffic that would make Richard Petty flinch. Pass.

Here's the kicker....under the fifth freedom rights that NWA has with Japan, for both pax and cargo, NWA must be the surviving corporate entity to maintain those rights. Any of you AMR guys have a stapler handy?

Nu

 

[nwaredtail]

for what it is worth, One of our former ALPA guys has a bidding website and he integrated the NWA list with CAL and DAL's. Basically most of the pilots in either integration were within 5% of where they would be at the combined companies. NWA has about 600-900 leaving in the next 3 years. The integration would not be nearly as bad as a DAL/USAIR or anybody/usair.

 

[Diesel-9]

DTW hub is much more valuable than ATL in pricing power, revenue, Asia flts/connections, runway operations etc.... Avoid bids to ATL for turns or overnights. Going thru customs in ATL is a nightmare. Recent data I saw showed DTW and EWR as the strongest revenue generating hubs.

 

[FDJ2]

I see this as a defensive move. NWA is "contemplating" a merger with DAL because NWA probably doesn't want to see a DAL/LCC merger, which would compromise a mutually lucrative code share agreement with DAL. If DAL fends off LCC's hostile takeover, look to see NWA back away from this deal.

 

[YourPilotFriend]

I see this as a defensive move. NWA is "contemplating" a merger with DAL because NWA probably doesn't want to see a DAL/LCC merger, which would compromise a mutually lucrative code share agreement with DAL. If DAL fends off LCC's hostile takeover, look to see NWA back away from this deal.

What's the old saying? the family that files together stays together.

 

[Falconjet]

Atlanta the most efficient hub? Hahhhhhhhhhhhh!

Put down the crack pipe General.

FJ

 

[JamesD]

Maybe NWA and Delta have been planning this for years and usair put a bid on to try to save their own tail. Nwa and Delta combine and continental united and usair without a dancing partner.

 

[PCL_128]

The "hole" you call ATL is better than Detoilet any day. ATL is the most effiecient hub in the woirld, with less wx delays and more operations.

As someone who commutes from ATL and is based in DTW, I've gotta agree with the General. The ATL is a well-oiled machine compared to DTW. DTW goes to 40-mile finals if there's a scattered layer at 20,000 ft.

 

[johnsonrod]

I agree with Gen Lee. ATL is not great, but it is better than DTW by a country mile. I hate flying into DTW. Regardless, I agree that a NWA merger would make a lot more sense than a USAirways merger given the route overlap.

But of course it makes you think like a regulator. If the DOJ and/or Oberstar agree to a merger between Delta and NWA, would it not force UAL and CAL (or maybe AA) to merge and therefore lead to reduced consumer choice? Isn't that what Oberstar warns against - a slew of competitive mergers that ends up reducing consumer choice and capacity on overlapping non-trunk routes and possibly increasing average prices (with less competition)? Wouldn't this create an overwhelming "urge to merge" among the big boys? They would have a precedent (the DAL/NWA merger if it happened) to argue their case for other big mergers. Looking at this from Oberstar's perspective, I am not sure that the gov't will actually sign off on any big merger - especially between airlines that are "trending" well.

The USAirways/AWA merger happened primarily due to two reasons:

1. There was virtually no route network overlap (so, can't reduce capacity too much and you preserve consumer choice) with non-competing hubs

2. USAirways was bleeding to death and liquidation was highly likely (therefore a merger could save jobs)

I don't see Delta or NWA approaching liquidation any time soon - and both are doing better despite being in Chap. 11. Although this pairing seems like more of a strategic fit, I am not sure that the Feds will sign off on it...

 

[HomerJ]

The NWA pilot group merging with the DL pilot group...I would buy front row tickets at any price to watch that steel cage match.