NWA?DAL deal rumored within 2 weeks

[jetflier]

This was taken from NWA ALPA web boards:

Saturday, January 05, 2008 01:53 PM
Originally Posted 5-Jan-2008 13:44 I wrote to the author of Planebusiness.com, of which I have been a long time subscriber regarding her take on heavy call volumes on UAUA, and to a lesser degree DAL, and NWA.

This was the rather specific (my emphasis) response:

"..Yes, I think something is up. I think we should hear something on the Delta/NW deal in the next two weeks . As for United, remember that Monday is the date of record for the dividend payment. Aside from that, I think something is afoot with them as well, but I really don't think it involves Delta. It may involve someone outside the U.S. We'll have to wait and see. But yes, there is a lot of "chatter" out there this week. -H."

The comments on NWA/DAL from this weeks newsletter:

"..First big rumor is actually a recurring rumor. Only this time it has more details. Delta-Northwest. Over the last week, we've received a number of pieces of intel from various folks on both the industry side and the financial side and it's all pointing in one direction -- that this deal could be announced this month. As I have said in the past, I think this one is going to happen. I mean, folks, remember it was me who said Richard Anderson was going to be the new CEO at Delta -- months before it was announced...

 

[Lear70]

As I have said in the past, I think this one is going to happen. I mean, folks, remember it was me who said Richard Anderson was going to be the new CEO at Delta -- months before it was announced...

She sounds a bit insecure...

Someone who really has a good track record of making predictions shouldn't have to beat their chest like that.

Either way, it's been the speculation for a while, wouldn't be all that surprising and hardly an "original thought".

 

[spongebob]

What's it going to be, DOH with 5 year fences? I think career expectations just took a dive with the imminent reduction in fleet size.

DAL has Captains hired in '00 but NWA has more upcoming retirements. Should be an interesting seniority merger.

Not looking forward to AWA vs. AAA ch. 2.

SB

 

[MD80DRVR]

Upcoming retirements??? You meah in 2012?

 

[Schwanker]

Upcoming retirements??? You meah in 2012?

No, I think he/she means near term retirements. Most NWA pilots in the 55-60 year range can still retire at 60 with a full retirement package with no deductions. Many would earn as much in retirement than if they kept working. Expect most NWA pilots to continue to retire at 60 for the next several years as there is very little (none in some cases) financial incentive to continue beyond 60. This is especially true now that the TDC has started. Those with a full retirement no longer are receiving DC contributions as these funds are being targeted to those who lost the most in the DB freeze. Retirements will still be very high at NWA.

Schwanker

 

[michael707767]

Not looking forward to AWA vs. AAA ch. 2.

SB

there are some differences between DL and NW, but they are very small compared to AWA and AAA. Frankly the only airline out there that was way, way out of wack was AAA. A merger with any airline but them is a lot easier.

I think the biggest problem with a DL/NW merger is the DC-9s would be parked very, very quickly. How do you account for that in the list merger?

 

[Schwanker]

there are some differences between DL and NW, but they are very small compared to AWA and AAA. Frankly the only airline out there that was way, way out of wack was AAA. A merger with any airline but them is a lot easier.

I think the biggest problem with a DL/NW merger is the DC-9s would be parked very, very quickly. How do you account for that in the list merger?

Same argument could be made for the 80s. The DC-9s are paid for and generate revenue. There are zero plans to retire them as they are part of the NWA fleet plan for the next 5-10 years.

What about MEH? It's very likely they'd be folded into this mix as well although it may be a can that's kicked down the road.

 

[Fly4hire]

I think the biggest problem with a DL/NW merger is the DC-9s would be parked very, very quickly. How do you account for that in the list merger?

It's only an issue if they are parked prior to a PID, which is doubtful. They may be parked after the operations are combined, but if they are on the property and staffed at the time integration is set it becomes a very bad deal for new hires at either company.

I think there is also an issue, that despite there newer age that the 142 seat DC9-80,88,90 is a different airframe for integration and operational purposes than the DC9-30,40 at a 110-124 seats. I wouldn't want to try that with an arbitrator.

The fact is they fly full, and are some of the most profitable acft NW flies, and even if they do need to be replaced, will not simply be parked until there is a need of the combined operation to reduce capacity - after an operational merger, and by it's definition, the seniority integration.

 

[michael707767]

It's only an issue if they are parked prior to a PID, which is doubtful. .

good point.

 

[~~~^~~~]

My bet is that the DC-9's life will be stretched until a "Dreamliner" technology version of a 737 is announced. NWA has a foot in the door with the Embraer product, but some in the industry believe the E jets will be obsolete 5 to 7 years from now.

Delta has new hires in the 767 and in Atlanta (which I guess would be a more senior choice than NWA's bases).

Sure is a lot of noise about this deal and Delta's stock price is in the basement.

 

[ACL65PILOT]

Yep it is coming. Maybe not in two weeks, but soon. Wonder how long I will be furloughed for.

 

[Fly4hire]

....if you want to reduce capacity while protecting core fleet assets for future deployment when revenue increases and fuel prices drop you do it by parking RJ feed from the various a'la carte providers used by both carriers....

 

[ThisistheDream]

If it did happen, I would think it will take at least 6 months to get approved and another 2 plus years to get the two companies together if not more. So for the next 2.5 years after it would happpen, the two airlines would most likely operate as seperate airlines like the AWA/Usair situation. I dont think there would be any furloughs since it would take awhile to get the list and company merged into one. Would DELTA keep the name or would it be NORTHWEST?

 

[~~~^~~~]

Good point

 

[jke406]

It would be called "Delta Orient"

 

[MJ42]

If it did happen, I would think it will take at least 6 months to get approved and another 2 plus years to get the two companies together if not more. So for the next 2.5 years after it would happpen, the two airlines would most likely operate as seperate airlines like the AWA/Usair situation. I dont think there would be any furloughs since it would take awhile to get the list and company merged into one. Would DELTA keep the name or would it be NORTHWEST?

From someone who starts at NWA in a few weeks I hope you are right. Your rationale seems logical.

 

[JAM-BRO]

If it did happen, I would think it will take at least 6 months to get approved and another 2 plus years to get the two companies together if not more. So for the next 2.5 years after it would happpen, the two airlines would most likely operate as seperate airlines like the AWA/Usair situation. I dont think there would be any furloughs since it would take awhile to get the list and company merged into one. Would DELTA keep the name or would it be NORTHWEST?

Nordelta Airlines
DeltWest Airlines
Delta Orient Airlines(retro)

 

[Fly4hire]

If it did happen, I would think it will take at least 6 months to get approved and another 2 plus years to get the two companies together if not more. So for the next 2.5 years after it would happpen, the two airlines would most likely operate as seperate airlines like the AWA/Usair situation. I dont think there would be any furloughs since it would take awhile to get the list and company merged into one. Would DELTA keep the name or would it be NORTHWEST?

Unless the respective MEC's have met in secret and worked out a pre-packaged integration :bomb: In you're more likely scenario pilots continue to retire or otherwise attrite. I think the worst that will happen is hiring will slow and or stop as a way to shrink the groups, and stagnation will ensue. I think there is much more exposure for the feeders.

 

[HomerJ]

....if you want to reduce capacity while protecting core fleet assets for future deployment when revenue increases and fuel prices drop you do it by parking RJ feed from the various a'la carte providers used by both carriers....

Amen. 100 seat a/c minimum everywhere, and less often. If the flying public doesn't like it, too bad, something's gotta give...

 

[ThisistheDream]

What happens to the Mesaba and Compass NWA flow thru if DAL buys NWA? Would DAL honor that previous agreement and have a flow thru to DAL from Mesaba and Compass?

 

[ACL65PILOT]

Like I have said before, it seems that there has been something going on at the MEC level for the last few months. I could be wrong, but it appears that way.
I think that they would like to have this as prepackaged as possible. It needs to be done before Bush leaves office.
Most of the people over at the Kremlin seem to think that this is a done deal. It is just the details that they are not sure about.

 

[Fly4hire]

What happens to the Mesaba and Compass NWA flow thru if DAL buys NWA? Would DAL honor that previous agreement and have a flow thru to DAL from Mesaba and Compass?

Just guessing, but I would imagine they would remain in force as long as NWA is hiring as NWA. I also would expect all mainline/feed air service agreement contracts to be revisited in a merger.

 

[Buddro]

Yep it is coming. Maybe not in two weeks, but soon. Wonder how long I will be furloughed for.

Get the Netjets application submitted QUICK!!!!

 

[~~~^~~~]

Did NetJets ever get the basing situation resolved?

 

[ACL65PILOT]

yes 100 bases. Start at 70K a year.

 

[nwaredtail]

What happens to the Mesaba and Compass NWA flow thru if DAL buys NWA? Would DAL honor that previous agreement and have a flow thru to DAL from Mesaba and Compass?

Don't think that will have a very high priority.

 

[ultrarunner]

.....most NWA pilots to continue to retire at 60 for the next several years as there is very little (none in some cases) financial incentive to continue beyond 60....

As it should be!

 

[Eagle757shark]

Same argument could be made for the 80s. The DC-9s are paid for and generate revenue. There are zero plans to retire them as they are part of the NWA fleet plan for the next 5-10 years.

What about MEH? It's very likely they'd be folded into this mix as well although it may be a can that's kicked down the road.

As far as Midwest, this could possible happen around the same time the DOJ is to rule on the TPG acquiring Midwest. I imagine Northwest would probable walk away from the Midwest deal and focus totally on a merger with Delta. Leaving the door open for AirTran to come in and acquire Midwest if they were still interested.

 

[Truckdriver]

If it did happen, I would think it will take at least 6 months to get approved and another 2 plus years to get the two companies together if not more. So for the next 2.5 years after it would happpen, the two airlines would most likely operate as seperate airlines like the AWA/Usair situation. I dont think there would be any furloughs since it would take awhile to get the list and company merged into one. Would DELTA keep the name or would it be NORTHWEST?

I think your right except if this deal does get announced they will attempt to integrate the operations a little quicker because of the cost pressures they are now facing. Running two seperate operations is expensive and they will attempt a fast integration. I still think a fast integration will take at least a year. In the mean time NWA and DAL both have to staff for international growth and NWA has to cover the retirements they will have. I'm hoping that the worst case scenario is a hiring freeze, but even that may not happen if both airlines want to cover the growth. DAL is getting a few 777's, 737's, and 757's so they will need to hire to staff those over the next year. My biggest worry is base closures. DTW, MEM, CVG, and SLC. Which of those will go is what I would like to know. I also would bet that the DC-9's will go even if they are paid off. DCI and the NWA connection carriers have a good number of CR9's that could cover alot of that flying much cheaper than keeping the 9's.

 

[motch]

If it does happen... got to wonder what is going to happen to the remaining legacy airlines.

AA
CAL
UA

and then you have the wildcards out there..

JB
SWA
AT
MW
FR
AL

Gonna be an interesting year!