Moak says Merger may be close for DL

[lowecur]

Maybe he knows something we don't?:laugh: And the evidence keeps building. What, that the General is actually Stewie Griffin on Family Guy?

imp:​

http://biz.yahoo.com/ap/080109/delta_merger.html?.v=2​

 

[Sedona16]

This is the letter alluded to above. It contains nothing that isnt already public knowledge but an interesting read none-the-less.​

January 9, 2008​

Dear Fellow Pilot,

The financial press continues to report almost daily on developments on the airline industry consolidation front. Industry analysts and self-proclaimed insiders casually predict the most likely pairings and even the timing of proposed events. While they do not always agree on details, Delta remains a common element in almost every scenario.​

Meanwhile, many airlines are warning that fourth-quarter results will be disappointing, citing decreased demand and increased fuel prices. The price of crude oil remains a primary concern, and just last week, it briefly broke the $100 per barrel mark for the first time before retreating to close just below $100. The Amex Airline Index, a financial index designed to measure the performance of the airline industry, remains anchored near its historic low. Just this week, the price of Delta stock closed below $12 per share for the first time since it was relisted on the New York Stock Exchange last May.​

While we have been hearing about "inevitable consolidation" for many years, it is becoming increasingly difficult to discount these facts and other recent events as simply more rhetoric. Consolidation may indeed be at our door. How we face its challenges will have a significant impact on our careers and profession for decades to come.
This week, your elected representatives are meeting in special session in Atlanta. While the MEC will discuss a variety of issues, much of the meeting will focus on the fact that our company may soon be involved in some form of industry consolidation. The MEC remains fully engaged with all relevant issues, and I want to provide you with an update on your union’s efforts as we continue to prepare for different possibilities.​

In recent Chairman’s Letters, I reviewed some of our ongoing efforts. In November, the MEC unanimously voted to retain the Merger Fund. This fund, now with a balance of over one million dollars, was initially authorized and funded by the Delta pilots early in Delta’s bankruptcy while our company was extremely vulnerable and even facing the possibility of liquidation. While the bankruptcy threat is now behind us, the potential for a consolidating event is every bit as real.​

The MEC has also retained legal counsel specializing in the field of mergers and acquisitions. This counsel has joined our existing legal and financial advisors to provide us with an outstanding team of professionals, supplying your elected representatives with the guidance, advice, and support they will need to properly represent your interests. We continue to meet with the team on a regular basis to refine our strategy as the situation warrants.
Finally, we continue to send a very clear and consistent message to all concerned parties, and that message is this: We do not oppose consolidation, and may even determine that consolidation is desirable. But as I wrote to you last month:​

The kind of consolidation that the Delta pilots might support is one that will produce an even [FONT=Times New Roman,Times New Roman]stronger [/FONT]and [FONT=Times New Roman,Times New Roman]growing [/FONT]airline that will vigorously and successfully compete in the international marketplace for years to come, will adequately reward the pilots for their participation as stakeholders in the transaction, and will provide the necessary platform for long-term growth in pilot earnings and career progression. Nothing less can justify a change in the status quo.​

[FONT=Times New Roman,Times New Roman]Any [/FONT]attempt at consolidation will fail without the active involvement and support of the pilots from the earliest formative stages of the effort. Any consolidated company must provide meaningful protections and added value for the Delta pilots. Without those critical components in place, we will not support a consolidation attempt, and the attempt, like virtually every other airline consolidation attempt over the past two decades, will fail. Management and the financial community must accept the fact that after the sacrifices we made to save our company, we will not be bystanders to career altering events. We are relevant, and we will assert that relevance.

With that in mind, I want to tell you about your MEC’s plans over the next few weeks as we continue to mobilize for various contingencies.

I have reactivated the Strike Preparedness Committee (SPC). The SPC is the tactical arm of the Delta MEC. While the traditional objective of the SPC has been to prepare for and, if necessary, execute a strike against Delta Air Lines, ensuring that not a single Delta jet will fly in the event of failed negotiations under the Railway Labor Act, the committee has demonstrated that they are capable of much more. In the past two years, the SPC has demonstrated the capability to react quickly and precisely to carry out short-notice operations in support of the Delta MEC. They have organized picketing efforts not only of airports but also of corporate events and Wall Street. They have supported lobbying efforts on Capitol Hill including those to successfully kill the US Airways hostile takeover attempt of Delta Air Lines. They have embraced the technology necessary to create a virtual strike center in very short order at the location of our choice.​

Conversely, the flexible nature of the SPC will also allow your MEC to task them in [FONT=Times New Roman,Times New Roman]support [/FONT]of a consolidation effort—but if and only if it is the right consolidation, a merger​

opportunity that provides the Delta pilots with the protections and equity we have communicated so clearly and unambiguously from the outset.
In concert with the mobilization of the SPC, later this week, the Delta MEC Strike Operations Center will open just a short distance from Atlanta’s Hartsfield-Jackson International Airport. This physical location will help to provide the infrastructure in the event the MEC deems it necessary to call you to action.
Also at this week’s MEC meeting, your MEC will elect a three-member Merger Committee. While we have an extremely talented and dedicated committee already in place, the Merger Committee is one of only two MEC committees (the other being the Negotiating Committee) that is elected by the MEC. Since the MEC has had some turnover due to regular election cycles, it is prudent to ensure that the Merger Committee in place is reflective of the desires of the current MEC.​

The Pilot-to-Pilot Committee is being reconstituted as a means of two-way communication between Delta’s line pilots and their elected representatives.
Finally, the MEC has scheduled a "State of the Union" rally on Wednesday, January 23 at 10:00 a.m. at the Georgia International Convention Center. We are operating in a very dynamic environment.​

Consequently, a precise agenda will depend on what events, if any, occur between now and the time of the rally. In general terms, the rally will provide an overview of your union’s recent efforts with an emphasis on the consolidation related activity that has dominated the industry’s financial press and how you can participate to craft our collective future. You will receive more details in the near future. Please make every effort to attend.​

Since Delta entered bankruptcy in September, 2005, the ride has often been turbulent and as we enter the New Year, the course ahead appears no less arduous. You are extremely well represented by the pilots you elected to serve, but their best efforts cannot succeed without your continued support and resolve. Please continue to stay informed, and be willing to answer the call to action, whenever and in whatever form that call might come.​

Fraternally,
Lee Moak, Chairman
Delta MEC​

​

 

[General Lee]

Yep, looks like something is on it's way. I would be surprised if it were United, since I think NWA would be a better fit route and hub wise. Aircraft wise NWA doesn't have a lot in common, except 757-200s. But, we had 13 different plane types back in 2000, and now we are down to 6 or 7. It can be done, but some would have to be pared down I would think. It will be interesting indeed.


Bye Bye--General Lee

 

[Max Powers]

Delta and NWA would be an international power house. Just imagine over 60 of the first 787s to begin flying for the new merged company.

 

[737 Pylt]

Delta and NWA would be an international power house. Just imagine over 60 of the first 787s to begin flying for the new merged company.

Max:
Delta and United would be even bigger!
That being said, I think (in the words of Don Corleone) "our true enemy has yet to reveal himself."

737

 

[~~~^~~~]

DAL and UAUA are in play. Don't know if traders are taking wild stabs at something, but I wish I had jumped in this morning. DAL is worth more than the range it had been trading in.

 

[BID]

you really think it is UAUA? I think the financial community would prefer to see NWA.

 

[michael707767]

I don't see a DL/UA merger being approved by the government without some serious divestitures. Which raises the question of what to sell and who would buy it.

 

[reepicheep]

"The kind of consolidation that the Delta pilots might support is one that will produce an even [FONT=Times New Roman,Times New Roman]stronger [/FONT]and [FONT=Times New Roman,Times New Roman]growing [/FONT]airline"

Well, we know for sure it won't be usair.

 

[General Lee]

you really think it is UAUA? I think the financial community would prefer to see NWA.

I don't see UAL and DAL--too many hubs too close--IAD/JFK, CVG/ORD, DEN/SLC, and both have LAX bases. I read some analcyst report this morning saying DAL/NWA had a better than 50% chance of merging (or acquiring?), and that CAL would likely buy United in response. Who knows?????? I prefer the DAL/NWA combo because of the lack of overlap, and both are friends of Air France (KLM is owned by Air France, and buddies with NWA).


AIRLINE STOCKS
Airlines turn south amid broad sector sell-off

By Christopher Hinton, MarketWatch
Last update: 1:09 p.m. EST Jan. 9, 2008

NEW YORK (MarketWatch) -- Airline stocks took a sharp turn lower Wednesday afternoon, swooning following a strong open, as investors continued their flight

Major carriers' shares soared earlier on merger speculation, and investment research firm UBS raised its ratings for the legacy group in the belief a major tie-up is likely within the next six months. Such a deal would put pressure on other carriers to consolidate.
"We think a Delta/Northwest deal is most likely," UBS said in an investor note, adding that this "would likely put investor pressure on Continental to act, perhaps by merging with United."
UBS raised its rating on four stocks -- Delta Air Lines (DAL:

Bye Bye--General Lee

 

[Fly4hire]

Yep, looks like something is on it's way. I would be surprised if it were United, since I think NWA would be a better fit route and hub wise.
Bye Bye--General Lee

What makes you think that NWA/DAL will be approved when DOJ is still holding up the purchase of 48% of MEH stock by NWA? That's total small fry in comparison.

 

[Max Powers]

What makes you think that NWA/DAL will be approved when DOJ is still holding up the purchase of 48% of MEH stock by NWA? That's total small fry in comparison.

Because the MEH deal is a complete scam.

 

[Schwanker]

Because the MEH deal is a complete scam.

Scam? Can you tell us all why? Thank you.

Schwanker

 

[General Lee]

What makes you think that NWA/DAL will be approved when DOJ is still holding up the purchase of 48% of MEH stock by NWA? That's total small fry in comparison.

I thought the purchase of MEH by NWA was suspect anyway, and I would think the DOJ would question that. There was overlap at MKE, and it didn't smell right. NWA started a lot of flights to the same cities as MEH from MKE, which seemed predatory to me. On the other hand, a DL and NWA merge or acquisition has virtually NO overlap, like USAir and AWA. I would expect that one to be approved quickly if it needed to, and Rep Oberstar, the Chairmain of the Aviation Sub Committee (I think that is his title) is a Minnesota Congressman. I think the NWA folks might be able to persuade him if it was a GOOD thing for NWA. I doubt the headquarters would be in MSP anymore, but most jobs would stick around...

Bye Bye--General Lee

 

[General Lee]

Scam? Can you tell us all why? Thank you.

Schwanker

I think it could have been. NWA was trying to move in on MEH's MKE hub, starting A319 flights to the West Coast, LAS and Florida, and also using RJs to the East Coast. When it seemed they couldn't beat them and Airtran was knocking at the door, they worked a deal with TPG to purchase them. It just doesn't pass the smell test, and was very predatory in nature. Maybe Airtran will get it's chance to buy them anyway.


Bye Bye--General Lee

 

[Sedona16]

I think the most telling words in the letter are at the very end:

"Finally, the MEC has scheduled a "State of the Union" rally on Wednesday, January 23 at 10:00 a.m. at the Georgia International Convention Center. We are operating in a very dynamic environment.

Consequently, a precise agenda will depend on what events, if any, occur between now and the time of the rally. In general terms, the rally will provide an overview of your union’s recent efforts with an emphasis on the consolidation related activity that has dominated the industry’s financial press and how you can participate to craft our collective future. You will receive more details in the near future."​

 

[Ty Webb]

A little off subject, but if we "rank and file" were a little smarter, DALPA would invite some AirTran NPA pilots to join them as a show of unity, and the AirTran pilots would turn-out in force to show support for the Delta pilots.

Hmmm . . . . What a concept. . . . Pilots showing support for each other.

 

[Schwanker]

I think it could have been. NWA was trying to move in on MEH's MKE hub, starting A319 flights to the West Coast, LAS and Florida, and also using RJs to the East Coast. When it seemed they couldn't beat them and Airtran was knocking at the door, they worked a deal with TPG to purchase them. It just doesn't pass the smell test, and was very predatory in nature. Maybe Airtran will get it's chance to buy them anyway.


Bye Bye--General Lee

It sounds like you're saying, "if you can't beat them, join them."

In all honesty, and don't know whether this is the case or not. I'm sure NWA would have been fine with the status quo, but if MEH were to be bought, what's wrong with the prize going to the largest bidder? ValueJet can fly as many flights into MKE as they'd like. Nothing is stopping them.

Schwanker

 

[General Lee]

It sounds like you're saying, "if you can't beat them, join them."

In all honesty, and don't know whether this is the case or not. I'm sure NWA would have been fine with the status quo, but if MEH were to be bought, what's wrong with the prize going to the largest bidder? ValueJet can fly as many flights into MKE as they'd like. Nothing is stopping them.

Schwanker

You mean "if you can't beat them, buy them." I am sure more than one person was perplexed when hearing NWA won the bid for MEH. I thought Airtran would win in hands down. Amazing.

Bye Bye--General Lee

 

[FUZZO]

So, when are the earnings reports due out?