Anyone else think this does not add up?

[ultrarunner]

Airlines are hoping something can come together before oil hits 150 bucks a barrel.

 

[Old School]

Neither NWA or UAL looks like a good fit for DAL. I think DAL would be better staying My Delta than take on a myriad of DC-9's, A-320's,and 747's. Just MHO.

 

[Draginass]

I've been told that the Delta people looked at NW, but it made no sense economically to buy it as a whole.

 

[ultrarunner]

I've been told that the Delta people looked at NW, but it made no sense economically to buy it as a whole.

Most companies aren't meant to be bought whole. Ruins the whole "synergies" thing.

 

[michael707767]

I've been told that the Delta people looked at NW, but it made no sense economically to buy it as a whole.

Funny, I've been told the same thing about UAL.

 

[radarlove]

I just don't see it. There is nothing about DAL, NWA, UAUA, or LUV that is materially different than it was 24 hours ago.

Sure there is. With no change, the markets see the carriers bleeding out. With a combination, the market sees synergies (I'm not going to argue those, it looks like it worked with AWA/USAir, but the roosters haven't roosted yet) and more profit than otherwise.

You have a myopic view as an hourly worker. Imagine how much money can be saved by eliminated an entire reservation system? HR department? An entire accounting department.

 

[pipe]

If bigger is better then why is AA shrinking to profitability. Bigger in no way means better or more efficient. Especially when every state senator is going to start screaming that they will not support the merger if it means a loss of jobs in their state. It will end up a bloated mess like.....AAA/AWA.

No airline has ever "shrunk to profitability" as a successful long-term business plan. Look at SWA. Decades of strong profits fueled in no small part by continuous growth.

As a matter of fact, what if national economic growth figures went negative? Would you buy it when W came on in the news and tried to convince you that shrinking was the key to future economic success?

PIPE

 

[IronCityBlue]

Imagine how much money can be saved by eliminated an entire reservation system? HR department? An entire accounting department.

Not to mention shedding redundant hubs full of high CASM "gas guzzeling" RJ's that have no competitive advantage anymore and are only used to compete with someone else's RJ's. Some mainline capacity will be shed as well for additional savings. There are huge economic advantages to a merger. Some of those reasons are also obstacles as well. No merger, even the darling DAL/NWA, is a sure thing from the DOJ. More mergers will probably be attempted than will be aprooved as well. No one, especially the DOJ, cares if everyone goes home with a "dance partner."

 

[737 Pylt]

No airline has ever "shrunk to profitability" as a successful long-term business plan. Look at SWA. Decades of strong profits fueled in no small part by continuous growth.

Finally.....I was waiting for someone to post this!
There you have it! Look at what happened after 9/11! Its a proven fact that you can't shrink to profitibility![/QUOTE]