At the NEW Delta...looks like MEM will....stick around...article

[General Lee]

Thursday, June 12, 2008 - 3:17 PM EDT


Delta CEO assures Memphis leaders of city's importance in combined company


Atlanta Business Chronicle

Just two days after announcing that Delta Air Lines Inc. would terminate its contract with Memphis, Tenn.-based Pinnacle Airlines Corp., Delta CEO Richard Anderson spoke in Memphis Thursday reassuring business leaders that a merger between Delta and Northwest Airlines stands to benefit the city.
Anderson addressed a near capacity crowd at the Holiday Inn at the University of Memphis telling Memphis Regional Chamber members and Memphis International Airport officials that Memphis "plays an important role" in the future of a merged airline.

"The relationship with the Memphis hub is very important," Anderson said. "It will continue to be an important part of the Northwest/Delta network."

Anderson cited the success of Northwest (NYSE: NWA) in Memphis after the airline merged with Republic Airlines in the mid-80s and said that the merged airline would be the U.S. "flag ship" carrier that could compete with international carriers.
On the decision to bounce Pinnacle Airlines (NASDAQ: PNCL) from its service agreement, Anderson said that until the merger is final, "the decision made between (Delta and Northwest) must be kept separate" and that Delta's agreement does not affect current or future relationships between Pinnacle and Northwest.
Pinnacle announced Tuesday Atlanta-based Delta (NYSE: DAL) planned on canceling its contract with the regional carrier on July 31, citing Pinnacle's failure to meet minimum on-time requirements. Pinnacle called the action "wrongful."
Although the Delta contract only represented about 2 percent of Pinnacle's overall business, analysts have speculated that the decision could foreshadow Pinnacle's future once the Delta/Northwest merger is finalized.
Besides addressing hub closure and Pinnacle concerns, Anderson also called on U.S. leaders to act on rising fuel prices pointing out that passengers should expect airline fare to continue to rise in the future.
"The ramifications of fuel prices are long-term in our society," he said. "You've seen air fare go up and they will continue to go up."


Bye Bye--General Lee

 

[Jmoney]

Yep-

MEM will still be a giant hub!

And there will not be a single furlough...... If you buy that, I have some great dot-com stock you might just be interested in, Genital.

-Let's light this candle!

 

[Draginass]

Anderson is going to tell everybody what they want to hear, then once he's got what he wants it's going to be "Conditions have changed and we're forced to make some alterations to our business plan."

 

[Jmoney]

I saw that interview on CNBC..... Talk about a whole lot of talking without really saying anything.....

I think wall street really knows these guys are full of it. They have heard all this "synergy" B.S. before and know what a load it is. Just check out the price chart if you don't believe me.

The real test won't be the justice dept. The real test will be financing. If DAL can't finance this merger, then "synergy" won't mean a durn thing. With the silly "paper" loss (as idiot Lee insists on referring to it,) their debt rating ain't exactly tops.

-Good luck, Anderson-you will need something more than half-ass double talk to get thru this one!

 

[Jmoney]

You know how Wall Street spots a loser?

Simple-

"Synergy" The more often they use this word, the more they look like complete idiots. When DAL started using this rhetoric, their stock went straight in the dumper..... I can't believe Anderson doesn't realize that "synergy" is now a kind of inside joke. Business leaders who really know what they are doing never, ever use this word-they know that it is not viewed in a positive light by investors.

-You keep drinking that Kool Aid, General.. I am afraid you are not in good hands.

 

[NuGuy]

Well, that's good news. Even after two months of TDY in MEM, Interstate BBQ NEVER gets old. As soon as they open the cabin door, you can smell it.

Nu

 

[On Your Six]

You know how Wall Street spots a loser?

Simple-

"Synergy" The more often they use this word, the more they look like complete idiots. When DAL started using this rhetoric, their stock went straight in the dumper..... I can't believe Anderson doesn't realize that "synergy" is now a kind of inside joke. Business leaders who really know what they are doing never, ever use this word-they know that it is not viewed in a positive light by investors.

-You keep drinking that Kool Aid, General.. I am afraid you are not in good hands.

So, have you worked on Wall Street? What financial experience do you have? Or are you just offering your unqualified opinion?

 

[ACL65PILOT]

Fact is that the financial markets did not react well to this end to end merger. Wall St. wanted there to be massive route cuts. They may still get their wish in the end. DAL seems to be trying to avoid it at all cost, but once again it is a question of how long we can hold out.
Will we wait until it is too late once again? I am of the mind that these guys may actually change the cycle that we have been going though. I will not hold my breath though.

 

[Jmoney]

So, have you worked on Wall Street? What financial experience do you have? Or are you just offering your unqualified opinion?

I have enough background to see through the B.S...... When US Air and America West merged, their stock shot thru the roof. Never used that "s" word that I can remember.

-The definition of "synergy" is: The combination of two entities which yields more than the sum of those two entities-a physical impossibility (total and complete crap).... I believe serious investors see through the idiocy of this garbage.

-What Anderson should be saying is that they will eliminate redundancy. This simply means combining responsibilities.

-"Synergy" is just another way of admitting you don't really know enough about what you are doing to explain it in plain english. It is a smokescreen.

Einstein once said "You don't really understand something well unless you can explain it to your Grandmother." Do you think Anderson could explain this "synergy" crap to anyone's Grandmother?

 

[Jmoney]

Fact is that the financial markets did not react well to this end to end merger. Wall St. wanted there to be massive route cuts. They may still get their wish in the end. DAL seems to be trying to avoid it at all cost, but once again it is a question of how long we can hold out.
Will we wait until it is too late once again? I am of the mind that these guys may actually change the cycle that we have been going though. I will not hold my breath though.

Interesting theory, but:

I believe it is more a question of finances in this case. Both DAL and NWA are in weak positions in terms of liquidity. DAL could very well have trouble taking out the money needed to finance this deal at all.

Personally-I don't think it is possible for an airline to shrink itself into profitability-much less for one airline to buy another and shrink both into profitability.

Regardless of the General's Kool Aid induced mania, I do beieve that any $6.7 Billion loss should be a huge red flag. Whenever you write off that much, you are getting very desparate-of at least trying to look that way.

I think one reason DAL took a huge write off at this time was to look very needy for justice approval. That is all well and good, but not if your crdit rating gets downgraded to the point that you can't finance the whole deal..... I think it is a horse race-the politicians vs. the investors. If the politicians don't cut the red tape fast enough, the investors will nix the whole financial part of the deal, and it is instant BK.

-Will get interesting..

 

[PCL_128]

General, have you been to MEM lately? There's hardly any NWA there as it is now. The place is absolutely littered with RJs. I know, because I was one of them! Pinnacle, MSA, and Comp-ass are on all three concourses. Hell, at any given time you'll probably see more AirTran and Delta planes in MEM than you'll see mainline NWA planes. It's a sad sight. When I did my PCL IOE in MEM over six years ago, mainline airplanes were everywhere. Now, barely any to be seen. Amazing how those scumbags in management have torn that airline apart.

 

[Superpilot92]

General, have you been to MEM lately? There's hardly any NWA there as it is now. The place is absolutely littered with RJs. I know, because I was one of them! Pinnacle, MSA, and Comp-ass are on all three concourses. Hell, at any given time you'll probably see more AirTran and Delta planes in MEM than you'll see mainline NWA planes. It's a sad sight. When I did my PCL IOE in MEM over six years ago, mainline airplanes were everywhere. Now, barely any to be seen. Amazing how those scumbags in management have torn that airline apart.

depends on what time of day your talking about, just like every airport.

 

[PCL_128]

depends on what time of day your talking about, just like every airport.

Not really, unless something has changed since I left Pinnacle about a year ago. No matter what time of day, the banks were all dominated by replacement jets.

 

[Superpilot92]

Not really, unless something has changed since I left Pinnacle about a year ago. No matter what time of day, the banks were all dominated by replacement jets.

During the banks almost every gate on the main concourse is full of mainline aircraft. At other times you're right its a ghost town. Late at night MEM is a ghost town in general since most of the feed in and out of memphis is just that, Feed.

 

[ACL65PILOT]

I will give you credit for pointing out on thing Jmoney. It is the credit issues for DAL. The deal will get done for that reason alone. I would bet dollars to donuts that our creditors told management that if we did not merger there would be no more loans for those big 777. With out those we can not sustain this business plan, alone or apart.
This deal will get done. It will be done quickly. Why? Because the next storm is already on the horizon. Open Skies, after that Foreign Ownership. Guys those are threats to management as well. They need this deal done to protect what is theirs. In turn it will protect what is ours.
The next three years MAY see us furlough and shrink a little as we get our ducks in a row. Fact is that after that, there will be no other airline in this country that can touch us. That is coming from people that know a lot more than you and I ever will.

 

[johnboy99]

I will give you credit for pointing out on thing Jmoney. It is the credit issues for DAL. The deal will get done for that reason alone. I would bet dollars to donuts that our creditors told management that if we did not merger there would be no more loans for those big 777. With out those we can not sustain this business plan, alone or apart.
This deal will get done. It will be done quickly. Why? Because the next storm is already on the horizon. Open Skies, after that Foreign Ownership. Guys those are threats to management as well. They need this deal done to protect what is theirs. In turn it will protect what is ours.
The next three years MAY see us furlough and shrink a little as we get our ducks in a row. Fact is that after that, there will be no other airline in this country that can touch us. That is coming from people that know a lot more than you and I ever will.

If the DOJ does not approve this merger and quickly I would bet it would be three months to furloughs and not three years.

I just rode four legs this week on Delta. One each on Delta mainline, Comair, ASA, and Chautauqua. Did not leave on time once with beautiful weather and did not leave the southeast in my commute. And to top off the last commute home (drum roll please) riding on a RJ with no APU in 90 degree weather from CVG. But hey, it was a free ride and I am not complaining even after having to take a bath because I sweated away five pounds. Could this be the airline nobody will be able to touch. As a former DCI pilot Delta still has a crappy domestic product that needs to be overhauled. News flash... Southwest will still be kicking everybodys butt in several years and I don't work for them.

 

[General Lee]

If the DOJ does not approve this merger and quickly I would bet it would be three months to furloughs and not three years.

I just rode four legs this week on Delta. One each on Delta mainline, Comair, ASA, and Chautauqua. Did not leave on time once with beautiful weather and did not leave the southeast in my commute. And to top off the last commute home (drum roll please) riding on a RJ with no APU in 90 degree weather from CVG. But hey, it was a free ride and I am not complaining even after having to take a bath because I sweated away five pounds. Could this be the airline nobody will be able to touch. As a former DCI pilot Delta still has a crappy domestic product that needs to be overhauled. News flash... Southwest will still be kicking everybodys butt in several years and I don't work for them.

The DOJ is still looking at it, but most people think it will be approved. We only have 12 overlapping routes, and they are between our respective hubs. Oberstar may not like it,(being on the Congressional Aviation Committee) but Sen Mica from FLA (being on the Senate Aviation Committee) already said he didn't see anything wrong. Both Committees can help TRY to influence the merger, but the DOJ will make the ruling, and DL seems to have a lot of friends in DC---like former Senator Trent Lott, who is lobbying his friends FOR DELTA right now. ($$$$$)

As far as our product, I think it is fine. Summertime flying can be tough with T-Storms, but that is the way it goes. Flights are full (doesn't mean profits though), and things are moving along. I think things will slow down in SEP, and that is where most airlines are going to start the big hurt. You will see fewer flights in the FALL, and more heavy MX. We are a Spring/Summer airline anyway at DL, with the bulk of our flying done during those times.

And, you sound like a sour puss. Southwest only has so many seats to fill, and if they fill them all the other passengers will have to fly the rest of us. Good for them, but they won't be the only one around in the end. Some airlines will fail, and the rest will pick up the slack. Please go commute on someone else.


Bye Bye--General Lee

 

[FBN0223]

News flash... Southwest will still be kicking everybodys butt in several years and I don't work for them.

News flash!!! Delta is a global airline which competes around the world with several airlines. The US domestic route system is just another market. Being that Southwest is a Texas based airline that doesn't even fly to Mexico, I doubt you'll see them competing for passengers out of Paris or Narita any time soon.

 

[mlifly]

.....

 

[JonnyKnoxville]

The DOJ is still looking at it, but most people think it will be approved. We only have 12 overlapping routes, and they are between our respective hubs. Oberstar may not like it,(being on the Congressional Aviation Committee) but Sen Mica from FLA (being on the Senate Aviation Committee) already said he didn't see anything wrong. Both Committees can help TRY to influence the merger, but the DOJ will make the ruling, and DL seems to have a lot of friends in DC---like former Senator Trent Lott, who is lobbying his friends FOR DELTA right now. ($$$$$)

As far as our product, I think it is fine. Summertime flying can be tough with T-Storms, but that is the way it goes. Flights are full (doesn't mean profits though), and things are moving along. I think things will slow down in SEP, and that is where most airlines are going to start the big hurt. You will see fewer flights in the FALL, and more heavy MX. We are a Spring/Summer airline anyway at DL, with the bulk of our flying done during those times.

And, you sound like a sour puss. Southwest only has so many seats to fill, and if they fill them all the other passengers will have to fly the rest of us. Good for them, but they won't be the only one around in the end. Some airlines will fail, and the rest will pick up the slack. Please go commute on someone else.


Bye Bye--General Lee

Really General!? Our domestic product sucks. Come ride in the back of my 50 seat RJ from CVG to JFK while the packs keep the passengers comfortable at 95 + degrees. After your long flight sitting right across from the smelly bathroom next to some overweight guy who takes up half of your already small seat you land at JFK wait for a parking space for an hour. You try and look out your window to see what the hold up is and quickly realize you can't because the window is down by your waist. Now that the flight has finally ended, we dump you out on a noisy and flooded ramp in the middle of a thunderstorm. You are soaked and your bags are soaked as you stand in four inches of water. Oh yeah, don't trip on the steps off the airplane and be careful walking up those steps back up into the terminal (I have seen one passenger shatter her nose in our galley when her face hit the floor after tripping on the top step).

After that wonderful plane ride you get to have a pleasant conversation with the only gate agent that will acknowledge you in the terminal to try and find your connection because it is the most effed up piece of sheet terminal on the planet.

Other than that, we have a great product.