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..