Why Delta Should Buy Northwest

[General Lee]

I agree General, just a lot of talk, very unlikely at this time. Most of the benefits can be derived through the current code share arrangement with NWA and the DAL joint venture with AF and KLM.

Here's a fleet snap shot for what's it worth.

NWA has 31 B747s DAL has 0

DAL has 8 B777s, NWA has 0

NWA has 33 A330s, DAL has 20 B767-400s

DAL has 80 B 767-300s, NWA has 0

DAL has 136 B 757s, NWA has 72

DAL has 71 B737-800s, NWA has 75 A-320s

DAL has 136 MD88/90s, NWA has 0

NWA has 66 A-319s and 115 DC-9s, DAL has 0

To summarize, DAL has significantly more wide bodied aircraft, but NWA's has 31 747s.

DAL's 757 fleet is roughly twice as big as NWA's.

The smaller narrow bodied fleets are about the same size, but DAL's aircraft are slightly larger.

Pilot demographics are somewhat comparable, so I don't see the same dynamics as the AAA/AWA merger.

Likelihood of a merger anytime soon, minimal. JMHO

The 747s at NWA on the cargo side (all pax 742s flights have now stopped) will go away sooner than later, just like UPS parking their 742s and 741s. I have heard that they plan to put the 744s in place of them, just like ANA, Japan Air, Eva, and others are doing (most are replacing the 744s with 773ERs)--for fuel efficiency. I have read that NWA plans to replace 744s with 787s, which are not as big as our own 777s. High fuel is killing 4 engine planes on the pax side. Some remain on the cargo side, but if UPS has to park 742s (while getting some 744s), then there must be some fuel efficiency problem. (obviously they aren't profitable enough on the passenger side anymore)

It would be interesting to see, no doubt.

Bye Bye--General Lee

 

[skywdriver]

my two cents....

one, there is a reason Anderson is at Delta, and has a relationship with NWA and Steenland.........which seems like its been in the works for some time.

two......With Democrats coming into power, guess what, it might not happen, even if both parties want it so those rich hedge fund guys can make even more money......but teh trump card is the loss of jobs, if the unions can cry loud enough, the politics of it says it will not happen. I would vote no......but then I am not on some corporate board and could make millions.....billions

The GOV is not going to just be looking at one merger request, they know as soon as they approve one (theoretically) or it even gets close to approval, there are going to be more merger requests. So, they have to make a decision of whether or not they are going to allow an industry consolidation. Given current capacity, demand, and continuing pricing power, they would be fools to let the industry consolidate. In addition, the airlines have returned to profitability, hopefully for a while to come, and the GOV knows that consolidation would be a potential nightmare for the consumer. So, surely they would never let it happen. I am sure there would be a lot of pressure from the investment banks to get it through, but reality is that it would most likely drive up ticket prices, and (even though probably good for the airlines) i would guess that it would create a much harsher environment for startups. How could they compete with the route structures of the big guys? No way, way too anti-consumer.

 

[JAM-BRO]

I am sure stapling NWA to the bottom would be in order.......No, not really. I am thinking fences for certain planes, no internal base movement for a few years, and a percentage merge to make it fair. Regardless, if it DID happen, it would have to be fair, and the only way to look at it here would be the ALPA merger policy with fences. NWA has 747s and some 787s coming, but their A330 pays less than our 767s, and we have more widebodies (767 and up) than any other carrier. We also have 5 times the number of 757s, and more 738s than they do A320s. Their mini busses are also smaller than our MD88s, and their DC9s are leaving. Very complex, but doable via ALPA's merger policy and some fences. I think the hedge fund people want this to happen more than the politicians, and they can turn it down if they choose.

Bye Bye--General Lee

DOOD

Your fleet numbers are all screwed. Does DAL have 360 B757s?? NWA has 72, so 5 times 72 is 360. NWA has 75 A320s and last time I checked that is more than 71 B738s. We have about the same number of DC9s as DAL has MD88s and if you add 66 A319s, well that's a wash. DAL has a few more widebodies than NWA that's true. You state that DAL has more widebodies(767 or bigger) than anyother carrier and that is wrong because United and AA have more. All I am trying to say is that you should check you facts before you post a bunch of non truths. It does not reflect good on you.

 

[JAM-BRO]

The hedge funds are the ones talking it up, and they are always looking for ways to make a quick buck.
Bye Bye--General Lee

Did Anderson quit DAL and went to work for a hedge fund? I thought it was DAL CEO Richard Anderson that came out in the news last week talking about mergers. Not hedge funds. Hmm!! General, are u full of crap again ....

 

[~~~^~~~]

Geographically, the two airlines could combine operations fairly easily: Northwest's Memphis hub is near Delta's main Atlanta hub and could be scrapped, just as Delta's Cincinnati hub could give way to a larger Northwest operation in Detroit.

Of course, no deal is inevitable. Whatever the financial benefits, Delta and Northwest executives also will have to give ground personally. Cutting planes, low-yield routes, and excess workers is one thing, but consolidation also means shedding executive teams. "It's ego. For all of us," says US Airways' Parker.

Thousands of employees lose their jobs in CVG and MEM - described as "fairly easy." But then, one manager gets his ego stepped on and that, sports fans, is a deal breaker. Do these magazines have an editorial staff who can read something and answer the question, "does that make sense?"

Quit pumping the stock....

Today, many of the airlines' biggest holders are hedge funds and other strategic investors anxious for a profitable exit.

Not that the business combination makes sense, or would make a profit. We just want hype so we can sell out and get in oil futures, or the derivative mortgage market or the next hedge fund flavor of the day.

What a poorly thought out article.

 

[ultrarunner]

So how will the seniority lists be merged?

Uhh...one of the groups will DEMAND DOH, the won't get it, they will AGREE to binding-arbitration, and then won't get what they want, and they'll be pi$$ed off.

Then they'll want to sue their own union, in an attempt to get their way, and ultimately loose that battle...

Ahh...but none of that's happened yet...so stay tuned...


yawn.......

 

[FDJ2]

Did Anderson quit DAL and went to work for a hedge fund? I thought it was DAL CEO Richard Anderson that came out in the news last week talking about mergers. Not hedge funds. Hmm!! General, are u full of crap again ....

Actually Anderson never said a merger was in the works or that DAL was interested in a merger, he stated that DAL would only look at a merger if it made sense. Not a ringing endorsement for a future merger, but not ruling it out if the planets align. JMHO, but I see a merger between two healthy legacy carriers as highly unlikely.

 

[ultrarunner]

Here is a rough look at the fleets. NWA 400 a/c. DAL 450 a/c. Nwa 5500 Pilots, DAL 7000 pilots.

Is that a misprint???

DAL has 1500 MORE pilots on-property for 50 more airframes?

 

[General Lee]

DOOD

Your fleet numbers are all screwed. Does DAL have 360 B757s?? NWA has 72, so 5 times 72 is 360. NWA has 75 A320s and last time I checked that is more than 71 B738s. We have about the same number of DC9s as DAL has MD88s and if you add 66 A319s, well that's a wash. DAL has a few more widebodies than NWA that's true. You state that DAL has more widebodies(767 or bigger) than anyother carrier and that is wrong because United and AA have more. All I am trying to say is that you should check you facts before you post a bunch of non truths. It does not reflect good on you.

Dood,

Thanks for the clarification. Maybe 5 times as many was too much. Ok, we have twice as many. And, your DC9s are going to be parked in favor of E175s, along with more A319s and probably all of your 747-200s. The 744s will go to the cargo side, leaving 787s and A330s as you largest pax airplanes. And no, AA and UA do not have more 767s. Widebodies, maybe, but not 767s.(what I meant I guess) Northwest, after parking more planes, will be significantly smaller. We are adding more (at least 8 777LRs over the next 2 years--maybe 12 total--10 737-700s, 10 MD90s maybe, etc), and adding a lot more pilots--over 700 next year probably.

So, I may have over stated the numbers yes, but not the meaning. Regardless, if it were to happen at all, ALPA would have a large part of determining any integration. I know that, as do you probably. DOH will not happen most likely also.

Bye Bye--General Lee

 

[jetflier]

Take a look at who owns the majority of stock at DAL and NWA. There is a difference, DAL largest shareholders are big banks. NWA largest shareholders are venture capital firms, vultures waiting to pick DAL apart and use its assets for a leveraged buyout to fund the deal,....JMHO .

Venture capital firms want to get big returns on their money compared to banks, even if its risky.
NWA has been owned/run by VC firms since 1986 Checci/ Wilson leveraged buyout of NWA.
IMHO, they are circling, to do it again with billion$ flowing into their pockets from DAL.

 

[Indy319FA]

DL and NWA have been dancing around each other for years. There were rumors of a merger when I worked at NWA 11 years ago. The bottom line, no matter how well they fit together, is that NWA is heavily unionized, while DL is not. Until this changes, I don't see DL execs taking on the headache of dealing with AFA, IAM, and AMFA in addition to ALPA. Right now the only major union DL execs have to deal with is ALPA.

I don't see DL execs merging with any heavily unionized carrier as long as ALPA is the only major union on property. It gives them a tremendous competitive advantage. Now if this were to change, then you may see a merger.

 

[John Pennekamp]

DL and NWA have been dancing around each other for years. There were rumors of a merger when I worked at NWA 11 years ago. The bottom line, no matter how well they fit together, is that NWA is heavily unionized, while DL is not. Until this changes, I don't see DL execs taking on the headache of dealing with AFA, IAM, and AMFA in addition to ALPA. Right now the only major union DL execs have to deal with is ALPA.

I don't see DL execs merging with any heavily unionized carrier as long as ALPA is the only major union on property. It gives them a tremendous competitive advantage. Now if this were to change, then you may see a merger.

Really, the only powerful union left at NWA is ALPA, and I'm sure they can play nice with DALPA. The AFA is weak, and AMFA is dead after the failed strike and hiring of scabs. I could see the NWA stews decertifying AFA in a merger with DAL behind the wheel. As for the IAM, the unionization of the Delta's below the wing workers is inevitable anyhow.

 

[gutshotdraw]

Any merger would require a fairly large amount of cash which is where the hedge fund and venture capital firms come in. Charles Rangel (D-NY) is the head of the House Ways and Means Committee. He wants to change the taxation of hedge funds profits from its current 15% capital gains status to regular income (35% top rate now). The hedge funds and VC companies will be racing to close as many deals as they can find in the next 16 months before "she" is sworn in to office (I know I'll be swearing, how about you?). It doesn't mean a DAL-NWA deal will pass muster with DOJ, but I'm looking for the proposal to be announced right after the first of the year.

 

[JAM-BRO]

Dood,

Thanks for the clarification. Maybe 5 times as many was too much. Ok, we have twice as many. And, your DC9s are going to be parked in favor of E175s, along with more A319s and probably all of your 747-200s. The 744s will go to the cargo side, leaving 787s and A330s as you largest pax airplanes. And no, AA and UA do not have more 767s. Widebodies, maybe, but not 767s.(what I meant I guess) Northwest, after parking more planes, will be significantly smaller. We are adding more (at least 8 777LRs over the next 2 years--maybe 12 total--10 737-700s, 10 MD90s maybe, etc), and adding a lot more pilots--over 700 next year probably.

So, I may have over stated the numbers yes, but not the meaning. Regardless, if it were to happen at all, ALPA would have a large part of determining any integration. I know that, as do you probably. DOH will not happen most likely also.

Bye Bye--General Lee

You seem to know a lot about the future fleet outlook for NWA. I work here and don't seem to know as much as you. By your estimates, half the pilots at NWA will be furloughed by next year since all the DC9s, 319 and 747-200 will be parked. That is 40% of our fleet. WOW!! We are gonna replace the DC9s eventually(replacement A/C not being built yet). Contrary to what you may think, the number of DC9s won't change much. By next year, we should have close to the same number of DC9s flying. They are gas hogs but they reliable and paid for. The 319s are staying also. We were able to regain the NBA charters(we used to do alot of them, but were gone with the 727). The freighters are in flux and the future of them is not cast in stone yet. But you may know more.

As per DAL, I do not know much. The numbers I've seen are 8 777 plus 10 737-700 minus 38 738s(sold future orders). To me, that is not much fleet growth. A negative difference of 20 hulls. You seem to omit that from your count. Also, your fleet of old 767s never age. As the years go by, they get newer and do not need to be replaced. Your fleet of MD88 gets younger by the day also. They won't ever need to be replaced. You sound funny!!! I am surprised I have taken the time to respond to your posts.

As to mergers, who cares. In the end, not a single pilot will be happy.

 

[JAM-BRO]

Actually Anderson never said a merger was in the works or that DAL was interested in a merger, he stated that DAL would only look at a merger if it made sense. Not a ringing endorsement for a future merger, but not ruling it out if the planets align. JMHO, but I see a merger between two healthy legacy carriers as highly unlikely.

Delta CEO says consolidation possible
By HARRY R. WEBER AP Business Writer
Article Last Updated: 10/16/2007 09:50:23 AM MDT


A Delta plane is seen on the ground at Phoenix Sky Harbor... (AP Photo/Ross D. Franklin, file)
ATLANTA—The chief executive of Delta Air Lines Inc. said Tuesday that the carrier wants to be the "undisputed leader" in the industry and that a deal with another airline may be in its best interest.
"We are evaluating the best path forward for Delta," CEO Richard Anderson said during a conference call with analysts after the airline released third-quarter results.

FDJ2, does "interested" and "in it's best interest" not the same thing? You tell me!!!!!!