Bethune seems to want Consolidation...WSJ

[General Lee]

Continental Ex-Chief Bethune
Could Play a Pivotal Role
In Fate of Delta -- and Industry
By MELANIE TROTTMAN
January 11, 2007; Page B1
Retired airline Chief Executive Gordon Bethune became an
icon of the aviation industry when he turned around failing
Continental Airlines Inc. in the 1990s. Now, he is emerging
with a pivotal role in determining the fate of Delta Air
Lines Inc. and whether a wave of airline mergers could be on
the horizon.

The official committee of Delta Air Lines creditors who will
decide whether Delta emerges from bankruptcy court
protection as an independent company or as part of another
airline recently hired Mr. Bethune to help them examine
their options: Accept a hostile merger bid from US Airways
Group Inc.? Support a plan by Delta's management to emerge
from bankruptcy as a stand-alone carrier? Or, push for
additional bidders and hold a de facto auction for the
Atlanta airline?

In an interview, Mr. Bethune was adamant that he hasn't
reached a conclusion and must still thoroughly assess the
scenarios and answer creditors' questions before weighing in
with a final opinion. Still, he made clear he believes
consolidation is needed. "The industry is dysfunctional.
There's really no reason to have 15 airlines. And there
ought to be more stability for people like Boeing and
Airbus. You've got lots of competition and do you really
need that much?" Mr. Bethune said in the interview on
Friday, following his appointment that became official late
last week. "Everybody can write a plan. Can you really
implement it successfully? That's what I'm being asked to
answer."


Known best for steering the dramatic turnaround of
Continental Airlines in the 1990s after painful mergers,
bankruptcy and union-management strife, the 65-year-old Mr.
Bethune remains a respected and influential force. After six
years with aircraft maker Boeing Co., where he served as a
vice president and general manager of customer services and
oversaw the manufacturing for the 737 and 757 airplanes, Mr.
Bethune joined Continental as president and chief operating
officer in early 1994. He retired from the Houston airline
10 years later as chairman and CEO, and has since been
acting as an industry consultant while serving on several
boards including Aloha Airlines of Hawaii, where he is
chairman, and Prudential Financial Inc. and Honeywell
International Corp.

His presence already is having an impact in the Delta
matter. At a three-hour meeting with US Airways executives
in New York Monday, the notoriously blunt consultant urged
the airline to put forth its best offer for creditors to
review, according to people who were in the meeting or
briefed on it. Yesterday US Airways raised its bid to a
total of $10.3 billion in stock and cash -- up from $8.6
billion based on yesterday's closing stock price, in a
revised offer made early in the morning ahead of a regularly
scheduled Delta creditors meeting.

Mr. Bethune also met with Delta executives late last week to
review their stand-alone plan, and then with the Delta
creditors committee at yesterday's meeting. People who have
met with Mr. Bethune in recent days say he has indicated he
thinks a Delta merger with US Airways makes sense and could
win antitrust approval from U.S. regulators. Yesterday other
people familiar with the situation said Delta and Northwest
Airlines Corp. have had regular contact for months about a
possible combination, though the discussions remain
preliminary. The sweetened offer was well received by Delta
creditors, said one person familiar with the creditors'
reaction. "It's a significant increase in value that changes
the dynamic," this person said. Creditors now plan to
pressure Delta to consider opening its books to US Airways
as well as other potential bidders, this person said.

Separately, an unofficial committee of Delta creditors
representing about 19 banks and hedge funds is urging Delta
to "immediately" allow US Airways access to Delta's books
for review, according to a statement. The group is also
urging Delta to be open to transactions with other airlines
that may be superior to Delta's stand-alone plan. Both
Northwest and Delta said yesterday that they don't comment
on rumors and speculation. Northwest told its employees that
while it remains focused on completing its reorganization
and leaving bankruptcy-court protection in the second
quarter, it "is monitoring developments in the airline
industry and is committed to acting in the best interest of
all of its constituents."

If Mr. Bethune recommends the merger with US Airways, and
creditors take heed to pressure Delta's management into a
deal, a domino effect of industry consolidation will likely
follow and reshape the industry for consumers, airline
employees and creditors in years to come. Already, the
merger of US Airways and America West in late 2005 has put
pressure on airlines to consider consolidation to remain
competitive. That consideration has gained strength since US
Airways made a public bid for Delta Nov. 15. Indeed,
exploratory merger talks between the United Airlines unit of
UAL Corp. and Continental Airlines gained more urgency once
US Airways disclosed its bid.

If Mr. Bethune takes a different path and convinces
creditors to vote for a Delta standalone plan, airlines are
more likely to stay put, with the industry remaining as it
is: oversupplied and fragmented, according to many industry
officials, including Mr. Bethune himself.

Whatever happens, Mr. Bethune says big airlines should marry
partners that add complementary routes in other parts of the
world. "You don't put all your eggs in one basket," he said,
adding that when Europe is doing poorly, Latin America may
boom, and vice versa. "Airlines need to get some scale that
allows them to become more stable and not live or die on the
next snowstorm," he said.

He cautions that it is a big mistake to marry the wrong
partner and gives US Airways' CEO Doug Parker credit for
merging America West with US Airways to boost the two
airlines' chances of survival. He says Delta has "come a
long way" since it filed for bankruptcy-court protection in
2005 and is delivering on what it has said it would.

Some in the industry have suspected Mr. Bethune was hired as
cover to justify a creditors' committee bias toward a Delta
stand-alone plan. That belief is rooted in part in Mr.
Bethune's history with Delta: He used to work for Delta CEO
Gerald Grinstein at Western Airlines in the 1980s and
considers Mr. Grinstein a "good friend" and "classy guy."
"He still calls me OC for Oil Can and I call him
Grindstone," said Mr. Bethune, who was vice president of
maintenance at the time. Mr. Bethune dismisses the notion
that his ties to Mr. Grinstein will influence his
recommendation now, noting that the two had a run-in in the
late 1990s when Mr. Bethune approached Mr. Grinstein about
Continental merging with Delta and Mr. Grinstein said he
would fight against that.

Mr. Bethune says his approach to reviewing Delta's current
situation will be to assess the probability of success or
lack thereof on various components of the competing plans,
such as whether revenue and cost-savings projections can
realistically be achieved, whether antitrust obstacles are
realistic and whether plans for handling union integration
are achievable. The committee then will have to decide
whether or not to push Delta management into opening up the
company's books for US Airways or any others to study. The
committee doesn't have to follow Mr. Bethune's advice. He
makes the point that the level of risk he might personally
be willing to take may not be the same the creditors would
take.

Financial advisers and lawyers for Delta's creditors'
committee approached Mr. Bethune in recent weeks after the
committee found a "pressing need" for an airline consultant
with broad experience. His perspective "will be of critical
importance in understanding the short- and long-term effects
that any transaction proposal and/or plan of reorganization
may have," the committee said in a document filed with the
bankruptcy court. Mr. Bethune will receive $250,000 for the
first 10 days of consulting work and $250,000 more for every
10 days of future service, up to $1 million, according to a
court document. After that, the committee would need to seek
further consent from debtors or a bankruptcy court order to
exceed that amount.


Cont....

 

[General Lee]

Mr. Parker said Mr. Bethune's arrival in the process is like
a breath of fresh air. "Frankly, it was refreshing to
present [the merger plan] to someone who really understands
how this works. We had a nice dialogue," he said of US
Airways's Monday meeting with Mr. Bethune.

Mr. Bethune isn't shy about his pro-consolidation stance or
the role he believes it should play in the industry's
future. "I have been a proponent of stabilizing the industry
by consolidating," he said. He partially blames airline
executives for the industry's current problems. "The barrier
to consolidation has been as much testosterone as it is the
government," he said, referring to airline executives who
can't decide which CEO and management teams will run a
combined carrier. "Somebody's got to leave. That's always a
big impediment to consolidation."

Consolidation done well enables airlines to achieve cost-
savings and increased revenue by rationalizing their fleets
and saving on overhead by getting rid of duplicate costs.

Mr. Bethune envisions an industry that has fewer carriers
not only for profitability's sake but also to create a
stable industry in which employees can work, pensions can be
provided and creditors like Boeing and Pratt & Whitney can
avoid getting less than full payment from airlines that file
for bankruptcy-court protection. He thinks his vision is
attainable if the government permits it. "Logic needs to
prevail," he said.

-- Susan Carey and Corey Dade contributed to this article



Some points. Bethune does say that he thinks US/DL could pass anti-trust issues (?). But, he also thinks merger partners should have complementary route structures, and it is a "bad idea to marry the wrong partner." I think DL knows this, and that is why talks have heated up between DL and NWA in the past couple weeks. In the end, I don't think Grinstein will give up DL to USAir, and will promote a NWA offer that has just as much money offered, but one that will leave USAir in the dust. The creditors are looking for as many offers as they can get, and NWA will liine one up to avoid being left out.


Bye Bye--General Lee

 

[Ex737Driver]

Some points. Bethune does say that he thinks US/DL could pass anti-trust issues (?). But, he also thinks merger partners should have complementary route structures, and it is a "bad idea to marry the wrong partner." I think DL knows this, and that is why talks have heated up between DL and NWA in the past couple weeks. In the end, I don't think Grinstein will give up DL to USAir, and will promote a NWA offer that has just as much money offered, but one that will leave USAir in the dust. The creditors are looking for as many offers as they can get, and NWA will liine one up to avoid being left out.


Bye Bye--General Lee

I agree that NWA would make for a better partner than USA but I don't think that NWA will garner the same respect from creditors that USA seems to have done. This is evident with their recent uping of the ante to $10.3B. The main reason for this is NWA is still in BK which can and will limit what NWA is able to bring to the table.

 

[Green]

Mr. Parker said Mr. Bethune's arrival in the process is like
a breath of fresh air. "Frankly, it was refreshing to
present [the merger plan] to someone who really understands
how this works. We had a nice dialogue," he said of US
Airways's Monday meeting with Mr. Bethune.

Mr. Bethune isn't shy about his pro-consolidation stance or
the role he believes it should play in the industry's
future. "I have been a proponent of stabilizing the industry
by consolidating," he said. He partially blames airline
executives for the industry's current problems. "The barrier
to consolidation has been as much testosterone as it is the
government," he said, referring to airline executives who
can't decide which CEO and management teams will run a
combined carrier. "Somebody's got to leave. That's always a
big impediment to consolidation."

Consolidation done well enables airlines to achieve cost-
savings and increased revenue by rationalizing their fleets
and saving on overhead by getting rid of duplicate costs.

Mr. Bethune envisions an industry that has fewer carriers
not only for profitability's sake but also to create a
stable industry in which employees can work, pensions can be
provided and creditors like Boeing and Pratt & Whitney can
avoid getting less than full payment from airlines that file
for bankruptcy-court protection. He thinks his vision is
attainable if the government permits it. "Logic needs to
prevail," he said.

-- Susan Carey and Corey Dade contributed to this article



Some points. Bethune does say that he thinks US/DL could pass anti-trust issues (?). But, he also thinks merger partners should have complementary route structures, and it is a "bad idea to marry the wrong partner." I think DL knows this, and that is why talks have heated up between DL and NWA in the past couple weeks. In the end, I don't think Grinstein will give up DL to USAir, and will promote a NWA offer that has just as much money offered, but one that will leave USAir in the dust. The creditors are looking for as many offers as they can get, and NWA will liine one up to avoid being left out.


Bye Bye--General Lee

Question for you General. If Parker can appease the DOJ by guaranteeing service and low airfare for X amount of time don't you think the new DAL would stand to make a killing down the road? They would have little competition on the East and especially in the South. Consequently looking forward 10+ years they should be able to really stick it to the consumer assuming Dal maintains market dominance.

 

[General Lee]

Question for you General. If Parker can appease the DOJ by guaranteeing service and low airfare for X amount of time don't you think the new DAL would stand to make a killing down the road? They would have little competition on the East and especially in the South. Consequently looking forward 10+ years they should be able to really stick it to the consumer assuming Dal maintains market dominance.

I think we would all want a strong company, if we were to merge. The Gov't, though, probably doesn't want little competition, when it comes to smaller communities that SW or AT wouldn't go to. There are plenty of those that most LCCs couldn't care less about. And, I don't really think USAir could appease the DOJ by guaranteeing service, since he has stated there would reductions in service and synergies....... Also, I see some major problems. First off, hubs would have to close. A lot of you guys think DL would take the hit, or that USAir would sell off pieces of DL only. Sure, the DL Shuttle would go bye bye, but probably CLT too. ATL is by far the biggest and most profitable hub in the World. CLT would downsize or go away quick. Then look at PHL and JFK. JFK lacks in feed somewhat, but is the gateway to Europe. There would never be duplicate service at JFK and PHL (USAir just announced PHL to Athens. Do you think that would stay since 90 miles up the road we have 1-2 daily flights to ATH in the Summer?)

And, another huge problem Doug may not see is that he would be inviting many LCCs, like Southwest and AT, to invade areas where they were or are not strong now. CLT would be invaded by more low cost carriers, making them an even strogner nuisance. All this while the other majors would probably be allowed to merge, and we would fall to number 3 behind CAL/UAL and probably AA/NW. We would be at the mercy of those larger legacy pairs, and then also larger low cost carriers getting bigger because we let them in. Southwest already has a hub in BWI, and they would LOVE one in CLT, and they have 37 737-700s coming this year alone. And then we would have over $20 billion in debt to top it off. With a NWA/DL merger, nothing would have to be given up (all slots at LGA and DCA are currently used by NWA to fly to their own hubs. There are no duplicate routes between DL and NW at any NE airport, none). Everyone would keep their hubs, with little job loss. That is why it is appealling.

Parker is scared to be alone. He doesn't want the others to pair up, so he is bidding for everyone. He gave the FEB 1st deadline to our creditor committee because if they do NOT want it in the end, that would give him time to try to bid for NWA. NWA sees that too, and that is probably why they are talking to DL, to cut Parker off at the pass.


Bye Bye--General Lee

 

[lowecur]

The carriers need to sort out the partnerships before this can proceed with any kind of viability. I think a NWA/DL matchup would have serious problems due to who would run the company. Bethune spells this out when he says:

"I have been a proponent of stabilizing the industry
by consolidating," he said. He partially blames airline
executives for the industry's current problems. "The barrier
to consolidation has been as much testosterone as it is the
government," he said, referring to airline executives who
can't decide which CEO and management teams will run a
combined carrier. "Somebody's got to leave. That's always a
big impediment to consolidation."​

The only airline that seems willing to give up it's current mgt team is UAL. I personally think this is where DP should have focused his efforts. It's very possible he could get left with the short end of the consolidation stick. Bethune will only advise that the US/DL merger can work, be profitable and be structured so as not to bring up anti-trust issues, but he will also say there are other partners that are just as viable as US.​

In the end DL/NWA will need to come up with a concrete merger plan to placate the credit committee prior to their vote. I doubt NWA will want to commit to anything on such short notice. If it's just going to be a "maybe" we work this thing out, I doubt that will be enough. The credit committee will take their chances with US and the DOJ, and if it's turned down, they will then focus on a new suitor. ​

If US's bid fails, the next battlefront will be between US and CAL for UAL. That could turn into a real bidding war of musical chairs with a winner take all and the loser fighting an uphill battle to survive.​

imp: ​

 

[Aplus9]

This article from USA TODAY has some interesting views on possible mergers...(click on tthe airline at the top to see combinations)

http://www.usatoday.com/travel/flights/2007-01-09-air-merger-usat_x.htm

Of course, it is just another opinion...we all have them.

 

[General Lee]

The carriers need to sort out the partnerships before this can proceed with any kind of viability. I think a NWA/DL matchup would have serious problems due to who would run the company. Bethune spells this out when he says:

"I have been a proponent of stabilizing the industry
by consolidating," he said. He partially blames airline
executives for the industry's current problems. "The barrier
to consolidation has been as much testosterone as it is the
government," he said, referring to airline executives who
can't decide which CEO and management teams will run a
combined carrier. "Somebody's got to leave. That's always a
big impediment to consolidation."​

The only airline that seems willing to give up it's current mgt team is UAL. I personally think this is where DP should have focused his efforts. It's very possible he could get left with the short end of the consolidation stick. Bethune will only advise that the US/DL merger can work, be profitable and be structured so as not to bring up anti-trust issues, but he will also say there are other partners that are just as viable as US.​

In the end DL/NWA will need to come up with a concrete merger plan to placate the credit committee prior to their vote. I doubt NWA will want to commit to anything on such short notice. If it's just going to be a "maybe" we work this thing out, I doubt that will be enough. The credit committee will take their chances with US and the DOJ, and if it's turned down, they will then focus on a new suitor. ​

If US's bid fails, the next battlefront will be between US and CAL for UAL. That could turn into a real bidding war of musical chairs with a winner take all and the loser fighting an uphill battle to survive.​

imp: ​

Who would run the combined DL/NW? Grinstein and Steenland both want to get out. They could appoint before they leave who they think should run it. Most NWA employees would probably love to have someone other than NWA management run the show.

Then you say they need to come up with a plan to placate the DL unsecured creditor committee. (the one, you know, with Dalpa, Boeing, GE, Coke, and the PBGC leading the way.....) Dalpa is willing to use $15 million to fight off the USAir takeover, so I would bet they would vote for NWA. Boeing would love to take an order to replace the DC9s, and GE would love to supply the engines. Coke is ATL based, and will incur the wrath of the City of ATL if they allow DL to get hurt, and the PBGC doesn't want USAir to take over because they will target the non pilot pensions still viable at DL currently. NW hasn't dumped their pensions either, so the PBGC probably likes them a lot.

And as Bethune and Neeleman say, if the US/DL merger never happens, consolidation probably won't happen this year. The only way consolidation will happen is if US forces DL to ask NWA to be it's partner. If that ball starts rolling, others will. US and UAL will NOT come together due to the fact that the DOJ already shot them down once, and UAL is not in BK and still has $18 billion in debt. Lowecur---NAH.


Bye Bye--General Lee

 

[General Lee]

I agree that NWA would make for a better partner than USA but I don't think that NWA will garner the same respect from creditors that USA seems to have done. This is evident with their recent uping of the ante to $10.3B. The main reason for this is NWA is still in BK which can and will limit what NWA is able to bring to the table.

NWA has the ability to get just as much cash, as long as the investment firm recieved a buch of stock in the resulting merged airline. They would easily make it back, depending on how strong a tie up. DL and NWA, both already gone thru BK and cleaned house, would be a strong combined company.
Here is the news on the investment bank they intend to hire. Hey, if USAir has the credit to get a couple huge banks to lend them money, I am sure NWA could work something out....


Northwest, which had been virtually mum about the merger
speculation sweeping the industry, last month broke its
silence by hiring investment-banking and restructuring
advisers Evercore Partners Inc. to help it evaluate and
possibly implement a merger, acquisition or other business
combination. But as early as last May, the Northwest board
of directors created a special committee to evaluate
consolidation possibilities.


Bye Bye--General Lee

 

[tomgoodman]

Job opening?

Who would run the combined DL/NW? Grinstein and Steenland both want to get out.

That's easy. The creditors assign Bethune the additional task of heading up a CEO search committee, which hunts diligently and finds.....BETHUNE!

 

[lowecur]

Who would run the combined DL/NW? Grinstein and Steenland both want to get out. Do you have anything in print that says Steenland wants out? They could appoint before they leave who they think should run it. Most NWA employees would probably love to have someone other than NWA management run the show. You mean they would agree on Bastian or Whitehurst.

Then you say they need to come up with a plan to placate the DL unsecured creditor committee. (the one, you know, with Dalpa, Boeing, GE, Coke, and the PBGC leading the way.....) Dalpa is willing to use $15 million to fight off the USAir takeover, so I would bet they would vote for NWA. Ya think so? Boeing would love to take an order to replace the DC9s, and GE would love to supply the engines. I guess the same couldn't be said for US and the 737 fleet? Coke is ATL based, and will incur the wrath of the City of ATL if they allow DL to get hurt, and the PBGC doesn't want USAir to take over because they will target the non pilot pensions still viable at DL currently. NW hasn't dumped their pensions either, so the PBGC probably likes them a lot. Sorry, but unless NWA comes up with a plan on short notice, I don't see the creditors waiting around till they do. The only way it works is if Steenland is willing to let Frick & Frack from DL run the show, or maybe Fred Reid.:laugh:

And as Bethune and Neeleman say, if the US/DL merger never happens, consolidation probably won't happen this year. It may not happen this year, but I'll bet US takes a shot at UAL before the year is out. The only way consolidation will happen is if US forces DL to ask NWA to be it's partner. Shotgun marriage...who knocked up who? If that ball starts rolling, others will. US and UAL will NOT come together due to the fact that the DOJ already shot them down once, Yeah, that makes alot of sense. You had me listening until you wrote that little sentence. and UAL is not in BK and still has $18 billion in debt. Lowecur---YEAH!

Bye Bye--General Lee

.....I still bet it makes it to the DOJ.

imp:​

 

[General Lee]

Read the last sentence Lowecur

By contrast, analysts believe that a Delta-Northwest combination would be far stronger: By matching Delta's strong European network with Northwest's powerful Asian routes, the combined carriers would potentially be more profitable than a combined Delta-US Airways. Vaughn Cordle, CEO and chief analyst of AirlineForecasts, a Washington (D.C.)-based consulting firm, estimates that a Delta-Northwest combination would have a fair market value approaching $12 billion—or $500 million higher than that of a combined Delta-US Airways. "A merger between Delta and Northwest makes the most sense," says Cordle. "It would produce more value than any other partnership out there, more than United-Delta, US Airways-Delta, or even United-Continental."

While Northwest officials declined to comment on the reports of a merger with Delta, Wall Street analysts say the Minnesota-based carrier signaled its willingness to partner up when it hired Evercore Partners (EVR) last December to explore "broad strategic alternatives" on its behalf. "Northwest would sell under the right terms," says Ray Neidl, an airline analyst for Calyon Securities in New York. "And strategically, Delta and Northwest are a good fit."

For one, analysts note that Northwest has an aging workforce that is poised to retire in coming years, making the task of cutting labor costs that much easier. "A lot of those Northwest workers are going to drop off the rolls," says Roger King, airline analyst for CreditSights, a New York-based institutional research firm. Delta management would also have a selfish reason for partnering with Northwest: It's likely that Delta executives would run the combined airline, and preserve its headquarters in Atlanta.




Bye Bye--General Lee

 

[General Lee]

And Lowecur, about the DOJ.....read this part

No Avoiding the Altar?

What's more, a potential merger between Delta and Northwest would have a great chance at receiving the necessary regulatory approval than would a Delta-US Airways deal. While Delta and US Airways compete head-to-head in many Eastern and Southeastern markets, there's far less overlap between Delta, whose strength is its Southeastern network, and Northwest, which has major hubs in Detroit, Minneapolis, and Memphis. That would mean fewer layoffs, and fewer of the cutbacks in service that would likely rile lawmakers in Washington.
By contrast, some industry insiders fear that a combination of Delta and US Airways would have a hard time passing muster with regulators. While US Airways officials remain confident that they would be able to divest enough assets to appease antitrust regulators—such as selling off one of the Washington-to-New York shuttle operations the two carriers run—some airline experts fret that a US Airways-Delta merger would give the combined carrier too much control over many second-tier markets like Charleston, S.C. "The Department of Justice will have a hard time approving this deal," says Michael Boyd, an aviation consultant based in Evergreen, Colo.

Already, some of the new Democratic leaders in Congress are voicing their opposition and threatening to derail the US Airways bid for Delta. "This proposal is ill-conceived and designed primarily for the benefit of US Airways," says Rep. James L. Oberstar (D-Minn.), the new chairman of the House Transportation Committee. "I think we can slow it down and eventually stop it." While that must be music to the ears of Delta executives, they still need a Plan B of their own. Which means that as much as Delta might loathe coupling with US Airways, it's still likely there's a merger in its future anyway.



So, there could be a merger, but probably not with whom you think.....

What was that you said about the DOJ? Sounds like we have already talked with some influential people, like Oberstar and Dorgan....


Bye Bye--General Lee


PS---Come on Lowecur, how about a response??? Come on, tell me again what you think

 

[lowecur]

"A lot of those Northwest workers are going to drop off the rolls," says Roger King, airline analyst for CreditSights, a New York-based institutional research firm. Delta management would also have a selfish reason for partnering with Northwest: It's likely that Delta executives would run the combined airline, and preserve its headquarters in Atlanta.




Bye Bye--General Lee

There are those analcyst opinions again. Where does Steeland say he wants out? We also don't know what Steeland's thoughts are regarding DL's mgt team. He may think they are two people who don't have a track record of managing a deal this large. All these things will come into play if an when Wall St. decides to back a NWA/DL deal.

imp:​

 

[lowecur]

No Avoiding the Altar?

What's more, a potential merger between Delta and Northwest would have a great chance at receiving the necessary regulatory approval than would a Delta-US Airways deal. Never said they wouldn't. They just have to get by that big hurdle of who will run the combined. While Delta and US Airways compete head-to-head in many Eastern and Southeastern markets, there's far less overlap between Delta, whose strength is its Southeastern network, and Northwest, which has major hubs in Detroit, Minneapolis, and Memphis. That would mean fewer layoffs, and fewer of the cutbacks in service that would likely rile lawmakers in Washington.
By contrast, some industry insiders fear that a combination of Delta and US Airways would have a hard time passing muster with regulators. While US Airways officials remain confident that they would be able to divest enough assets to appease antitrust regulators—such as selling off one of the Washington-to-New York shuttle operations the two carriers run—some airline experts fret that a US Airways-Delta merger would give the combined carrier too much control over many second-tier markets like Charleston, S.C. "The Department of Justice will have a hard time approving this deal," says Michael Boyd, an aviation consultant based in Evergreen, Colo.

Already, some of the new Democratic leaders in Congress are voicing their opposition and threatening to derail the US Airways bid for Delta. "This proposal is ill-conceived and designed primarily for the benefit of US Airways," says Rep. James L. Oberstar (D-Minn.), the new chairman of the House Transportation Committee. "I think we can slow it down and eventually stop it." While that must be music to the ears of Delta executives, they still need a Plan B of their own. Which means that as much as Delta might loathe coupling with US Airways, it's still likely there's a merger in its future anyway. I hope so.



So, there could be a merger, but probably not with whom you think.....I'm for a merger anyway you look at it. Once the ball gets rolling, it can only help the other low cost carriers obtain some of those prized gates around the country....just not as many as they would have with a US/DL merger, but there will some freed up if 6 carriers go to 4 or 3.

What was that you said about the DOJ? Sounds like we have already talked with some influential people, like Oberstar WHO?? and Dorgan....oh, On*Star & Dorkin.


Bye Bye--General Lee


PS---Come on Lowecur, how about a response??? Come on, tell me again what you think

OK...but it's sounds like you've screwed yourself into the floor with the 8000 posts. Congrats. I should make it to 8000 when I'm settled into the nursing home.imp:

 

[General Lee]

There are those analcyst opinions again. Where does Steeland say he wants out? We also don't know what Steeland's thoughts are regarding DL's mgt team. He may think they are two people who don't have a track record of managing a deal this large. All these things will come into play if an when Wall St. decides to back a NWA/DL deal.

imp:​

Well, I am glad you read those posts. As far as Steenland goes, I have heard from NW pilots that he has made his money and wants to retire on some lake in MN. I have no clue if that is true, but I do know Grinstein wants to retire soon, probably after we exit BK. I don't think he has named a successor, and those articles talking about NWA and DL talking at various levels probably means people there are talking about who would get what if a merger were to occur. The last sentence in that above post, about DL management staying and the HDQ in ATL is fairly bold to say, but maybe he has talked to people. (he probably knows more than you and I, well atleast you. )


Bye Bye--General Lee

 

[stb]

I dont think Delta is the true target for USAirways. After Delta merges with NW or CO I'd give it a month til USAirways makes a move for United.

 

[Lampshade]

I dont think Delta is the true target for USAirways. After Delta merges with NW or CO I'd give it a month til USAirways makes a move for United.

Doug's m.o. is all about bankrupt airlines, it's just the easiest and cheapest way to right size aquistions. It's NW or DL, and NW still has pensions so its gotta be DL.