NWA hires M&A team Delta bid expected

[AA717driver]

Perfect equipment match... Great synergy. Go for it! TC

 

[Heavy Set]

Perfect equipment match... Great synergy. Go for it! TC

The DC9s need replacing I assume. That could be a huge order to Boeing, who sits on the creditor committee board and could sway that one. But regardless, the routes aren't close, and even ex Transportation honcho Norm Minetta stated the DOJ would allow it when he was speaking in China a year ago. It sounds like a better fit than USAir.

 

[ironspud]

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.

Nah. APLA "recommendations" "go out the window" on this one. NWA pilots will cream the DALPA wussies. Absolutely would/will be great entertainment to watch.

 

[Fly4hire]

Nah. APLA "recommendations" "go out the window" on this one. NWA pilots will cream the DALPA wussies. Absolutely would/will be great entertainment to watch.

This is great - we can spend the next half a year arguing about a seniority integration for a merger that's not even proposed yet

Lee Moak is no pushover, and neither is Dave Stevens. John Prater, the new ALPA Prez is a different animal than DW. If, and that is a big IF, it happens, I have a feeling it will be as more or less equitable as these things can be - in other words every one is equally unhappy, and there should be no windfalls for anyone.

The real losers in any hookup like this will be the Feeder carriers that get dumped from their respective Air Services Agreements as excess feed

 

[lowecur]

NWA could be taken private

Evercorp is a private equity boutique bank. They will do the research on any possible future partner for NWA, and will most likely come up with private equity investors to do the deal. This also means that NWA or it's future partner could be taken private for 1 to 10 years and then brought back to the market with an IPO in the future. Just think, no Sarbanes Oxley. Ray Neidl said the following:

Northwest also needs to think about its own financial structure, Neidl said. When the airline emerges from Chapter 11, its current unsecured creditors will become key shareholders, looking to get the most value from the airline. That could include a leveraged buyout by a private equity firm, rather than a public stock offering, the analyst said.

Here's an orientation of what it's all about.

http://money.cnn.com/magazines/fort...1/27/8394344/index.htm?postversion=2006112106

imp:​

 

[Diesel-9]

SHACK! IPO in 2-3 years.

 

[NuGuy]

Honestly all,

The REAL merger will be the only you NEVER suspect or see comming.

I mean the AAA/DAL thing materialized out of thin air. Same for AAA/AmWest, and the CAL/NWA stock deal in 98 (snached right out from DAL's nose).

So to guess right, pick the most unlikely combo you can think of, and there you go.

AMR/UAL
Alaska/NWA
CAL/AirTran
DAL/JetBlue

Nu

 

[xjhawk]

maybe the deal is to take MAIR holdings, and the Delta thing is just a fake. I mean MAIR has over a hunderd million in the bank, NWA already has what....30% of the stock....what would it take to buy to 51% to take control of that 150 million? I am sure at 5.18 a share its not over a hundred million. Thats money in the bank, even after paying the attorney consulting fee.

 

[Spectre]

Honestly all,

The REAL merger will be the only you NEVER suspect or see comming.

I mean the AAA/DAL thing materialized out of thin air. Same for AAA/AmWest, and the CAL/NWA stock deal in 98 (snached right out from DAL's nose).

So to guess right, pick the most unlikely combo you can think of, and there you go.

AMR/UAL
Alaska/NWA
CAL/AirTran
DAL/JetBlue



Nu

SkyBus/DAL
SWA/JetBlue
DAL/AAI

 

[Occam's Razor]

JetBlue/Aeroflot
SWA/Greyhound
USN/USAF
Coyote/Acme
FDX/FTD

 

[YourPilotFriend]

human beings/Fish

 

[Fly High]

NWA121006


Last update: December 10, 2006 – 12:38 AM
What would mergers mean for Northwest?

Fresh from labor turmoil, airlines now consider a next step, possibly mega carriers.
Liz Fedor, Star Tribune
A wave of merger initiatives could soon bring profound change to the airline industry and its passengers.

US Airways, the first of the major domestic airlines to enter bankruptcy after the Sept. 11 attacks, has become the first to propose creating a new mega-carrier by combining with Delta Air Lines. Now Northwest and others are trying to assess what their responses should be.
For an industry that is just emerging from a wrenching series of financial restructurings and wage cutbacks, the proposal by US Airways CEO Doug Parker, a former Northwest executive, means the possibility of further turmoil and uncertainty in the months ahead.
Ironically, US Airways likely wouldn't even be around to begin this merger game had not the federal government stepped in to provide the tottering airline with financial assistance after the World Trade Center attacks in 2001. That federal help is widely credited with giving the airline a chance to reorganize in bankruptcy rather than liquidate.
Now Parker wants to force the industry consolidation that the government helped forestall.
Analysts argue that some airline seats have to come off the market before U.S. airlines can achieve ongoing profitability. Parker's bid could trigger a complicated chain reaction in which other airlines look to make their own bids for Delta or others, with Northwest seen as vulnerable because, like Delta, it is in bankruptcy.
"It makes a lot of sense to have as many deals on the table as possible, so the Justice Department evaluates the whole landscape" instead of one deal at a time, said Benchmark Co. analyst Helane Becker.
A merger involving Northwest would be of particular importance to Minnesota, where the 80-year-old company and its regional carriers operate 463 flights daily from Minneapolis-St. Paul International Airport, and its state workforce topped 16,000 as of early 2005.
Window of opportunity
Northwest management's decision this past week to hire the investment banking firm Evercore Group revealed that the merger talk is being viewed seriously inside the airline's Eagan headquarters.
Analysts see several reasons why the time could be particularly ripe for mergers: Not only are many carriers earning money again, rather than bleeding it, but they also have dramatically cut labor costs and the strong economy has helped fill more seats.
But profitability could be fleeting, with any new spike in fuel prices or economic slowdown hurting results. Meanwhile, the clock already is ticking on the lower-cost labor contracts that management won, with workers sure to demand higher pay later.
Parker and some of his peers argue that consolidation is the key to creating airlines big enough to be steadily profitable.
But some observers note that Parker may be making his bid for Delta because he doubts the long-term viability of the current US Airways. The airline was created by combining America West and US Airways, a two-time veteran of bankruptcy, in 2005.
It's too early to know whether Parker's proposal or any other airline deal will become a reality. Merger proposals have died before: Delta made a failed bid for Continental in the late 1990s, and regulators prohibited a United Airlines-US Airways transaction in 2001.
Parker's gamble has the potential to draw out others. Some industry veterans believe regulators might be more willing to allow several mega-carriers that could compete on equal terms rather than one that would dwarf the others.
The expansion of low-fare domestic airlines, such as Southwest and AirTran, also could leave regulators more open to big mergers, said Phil Baggaley, a credit analyst for Standard & Poor's.
AirTran has shown steady growth, despite competing against Delta from the same Atlanta hub. AirTran CEO Joe Leonard said in a recent interview that he believes Delta and US Airways would be required to divest airport gates and slots if they merge. "We think that we are in a very good position to be an acquirer of those assets," Leonard said.
US Airways could make a move against Northwest if its Delta proposal doesn't gain traction. But it would face a Northwest management with "a reputation for fighting aggressively anything they don't like," Baggaley said.
For Northwest, either Delta or Continental are generally considered the best merger partners. Delta is expanding aggressively in Europe, while Northwest is a bigger player in Asia. Northwest also already has code-sharing agreements with Delta and Continental, so its passengers are accustomed to traveling to cities served by those airlines on tickets booked through Northwest. The airlines also are familiar with each others' ticketing and baggage operations. American Airlines also might try to acquire Northwest.
It's an open question whether Northwest or Delta would propose any business combinations before their planned departures from bankruptcy in 2007.
Skeptics are prepared
While merger discussions will be dominated by management teams, they also will make employee groups, especially pilots, key players.
The Delta pilots are trying to kill the US Airways deal.
Capt. Lee Moak, chairman of the Delta pilots union, said Thursday that 1,000 Delta pilots could lose their jobs in a merger, and that travelers would get fewer flights and higher fares.
"It is very apparent that this [deal] is just a financial scheme ... to make a quick dollar by using the bankruptcy process," Moak said.
Delta and Northwest pilots sit on their creditors' committees, and could help sway opinions for or against any deals.
U.S. Rep. Jim Oberstar, D-Minn., incoming chairman of the House Transportation and Infrastructure Committee, has signaled that he will give a skeptical hearing to proposals that would result in three or four surviving big airlines. "Three is not competition," Oberstar said.
But Parker and other executives are ready to take their chances, in the hope of turning around the fortunes of an industry that has seen only short periods of profitability since deregulation in 1978.
In June 2004, Parker told a U.S. House committee that there were too many airplanes, route networks and hubs on the market. "We must be willing to let the market work it out," Parker said.

Liz Fedor • 612-673-7709 • By LIZ FEDOR [email protected] ©2006 Star Tribune. All rights reserved.

 

[stb]

Lowecur,
Would $9.3 billion be a good bid for United Airlines?

I think the USAirways/Delta "merger" is a smoke and mirror show for the upcoming USAirways/United part III.

 

[jetflier]

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

Hi General,

I was at "The Ice Palace", our training center today, and heard that our CEO, Doug Steenland commented at an instructor meeting that the "Date" is March 1st.

An instructor asked heir'Steenland about the Merger possibilities with an airline, which one, to which he replied while making the DAL "witches hat" symbol with his hands and commented that there were possibilities.

Then the instructor asked heir Steenland if he should sell his house and plan a move to the south...Steenland said yes. And Steenland said he was planning on leaving NWA at that time.

Sooo, there you have the latest poop from the rumor mill..!

What the latest from DAL ?

 

[General Lee]

Hi General,

I was at "The Ice Palace", our training center today, and heard that our CEO, Doug Steenland commented at an instructor meeting that the "Date" is March 1st.

An instructor asked heir'Steenland about the Merger possibilities with an airline, which one, to which he replied while making the DAL "witches hat" symbol with his hands and commented that there were possibilities.

Then the instructor asked heir Steenland if he should sell his house and plan a move to the south...Steenland said yes. And Steenland said he was planning on leaving NWA at that time.

Sooo, there you have the latest poop from the rumor mill..!

What the latest from DAL ?

Like I said, I think Steenland and Grinstein will leave together, with a fresher crop of management people running the show IF this merger were to take place. The AWA/US merger was "approved" by the Gov't because it lacked overlap of hubs and was a good fit. NW and DL are a good fit too, and since Boeing is a very large unsecured creditor on our committee, it would have to be convinced (with Boeing orders maybe) to vote the way of a NWA/DAL merger. Those DC9s could be replaced with 737-700s or something close.

As far as what I have heard, I haven't heard anything yet from our side, since they are still saying they want "to be an independent, stand alone carrier." But, if mergers were to occur, then I would bet NWA would be a good choice just because DL would still keep most of the hubs and not lose slots or gates in the NE, or the Shuttle. Valuable LGA and DCA slots would not be given up, since the current NW flights only go to NW hubs, not flights to MCO or TPA(just examples). There are no overlapping flights from DCA or LGA between NW and DL. I am sure large fences would be placed on 744s, and our 777s, and more 787 orders would happen if it were to occur also.

Remember, Oberstar, a MN Congressman, is still incharge of looking this over, although ex Transportation SEC Norm Mineta hinted in a conference in China a year ago that the Gov't would probably not oppose a NW/DL combination, both emerging "together" from BK. You never know.... But, I like that combo better than DL/US, and I bet the Gov't would too. There could be a couple hickups, with possible loss of CVG (too close to DTW) and maybe a loss of MEM on the NW side. That would have to be worked out, but it would be less painful than a US/DL merger by far.


Bye Bye--General Lee

 

[Sig]

JetBlue/Aeroflot
SWA/Greyhound
USN/USAF
Coyote/Acme
FDX/FTD

That's gold right there...