DAL up sharply - Merger Talks with ALPA

[Poahi]

CNBC is reporting that ALPA is in talks over the merger and the stock us up sharply toward the end of the session and after hours.

http://www.cnbc.com/id/22577605/for/cnbc/

The last trade I saw was at $14.20 and it's been around $11.xx on the last dip.

 

[contrail67]

United stock also went up just about as much....

 

[Jmoney]

Bingo!

The stock price is what all the hype is about. Wall Street loves merger talk, but I think in the long run, any mergers will solve very few problems. The bottom line is that the industry is still selling its product at less than cost.......

Airlines might have a profitable quarter every once in a while, but if you look at an average or 2,5,or 10 or more years, the entire industry is simply giving away its product at below cost. Competetion is good-giving away what you produce is charity, and no one ever got rich from that.

 

[instructordude]

The stock price is what all the hype is about. Wall Street loves merger talk, but I think in the long run, any mergers will solve very few problems. The bottom line is that the industry is still selling its product at less than cost.......

Airlines might have a profitable quarter every once in a while, but if you look at an average or 2,5,or 10 or more years, the entire industry is simply giving away its product at below cost. Competetion is good-giving away what you produce is charity, and no one ever got rich from that.

Jmoney,

Even I could have figured this one out.

 

[aircowboy]

let's not forget NWA could block any continental merger.

 

[michael707767]

let's not forget NWA could block any continental merger.

NWAs right to block a CAL merger goes away if NWA enters into it's own merger.

 

[Schwanker]

NWAs right to block a CAL merger goes away if NWA enters into it's own merger.

I've seen that written in an article before, but been told by reliable NWA folks that this is false. They say NWA does not lose its right to block a CAL merger unless NWA gives up or sells these rights. I'm not sure where the truth lies, but can you back up this statement?

Schwanker

 

[Bluto]

I thought NWA basically had first right of refusal on a CAL merger. Is there more to it than that?

 

[atpcliff]

Hi!

Today, analysts are saying DAL/NWA and UAL/CAL soon.

cliff
GRB

 

[PositiveRate]

I'm not saying a merger won't happen, BUT I would be very surprised to see both NWA/DAL and CAL/UAL.

This chatter is more about stock price manipulation than reality - reference the heavy involvment of Pardus capital (a hedge fund) in pushing a DAL/UAL combo. Conveniently, they hold large stakes in both companies and everytime the "chatter" hits the airwaves, the stocks move up/down multiple % points at a time.

You are seeing investor speculation - that may make for a good stock trade as airline stocks are extremely oversold. Assuming further mergers by large players, though, is mental masturbation at best. I would think you'd see a SWA/Airtran, NWA/Frontier, JB/Spirit type deal before you'd see a legacy/legacy deal.

AWA/US Airways was a very unique situation where US Airways was down and out to the point where any deal was better than liquidation. The route structures and fleet types were complimentary. It had great potential, but the culture differences were largely dismissed and/or mismanaged, which has proven to be a huge mistake and may possibly hamstring any future success for years to come.

Any other combo of legacies will have major overlap at some point in the route maps as well as serious fleet commonality issues. Wall street pressure is not enough to make this happen - unless we see a major player back in BK or close to it, it's not going to happen. If we do enter a prolonged economic downturn, this scenario might develop, but that's not anytime soon with the reactive speed airlines operate at.

A large reason people are even considering these deals is the strength of international travel, but as a weak economy scenario that begs the need for large mergers develops, the unwinding of intl growth that's pushing all this will surely follow....the way I see it, the more the respecitve airlines need/want a merger (weak global and domestic economy), the less the actual benefit of such transactions become.

You may see legacy/LCC or LCC/LCC combos in the meantime.

Just my 2 cents.

 

[IXLR8]

NWA stock is WAY down....must not be about NWA huh?

 

[YourPilotFriend]

I would expect to see a merger of legacy/legacy and real soon. Top execs are worried about their compensation packages as their stock bonuses are down some 50%, and the industry is headed into a recession. They could pack a pretty nice golden parachute if they merge within the next few months vs down the road.

 

[SEVEN]

NWA stock is WAY down....must not be about NWA huh?

Not true. NWA stock was up over 25% today and is currently up 23% for the day. Delta airlines is currently only up 10%. I just made a 25% return on my $ in 2 days. The writing is on the wall for a NWA/Delta merger with NWA being the initiator.

 

[SEVEN]

I would expect to see a merger of legacy/legacy and real soon. Top execs are worried about their compensation packages as their stock bonuses are down some 50%, and the industry is headed into a recession. They could pack a pretty nice golden parachute if they merge within the next few months vs down the road.

You are right. Doug S. has seen his stock plummet almost 50%. With all the "merger talk", the stocks are beginning a climb again.

 

[General Lee]

Not true. NWA stock was up over 25% today and is currently up 23% for the day. Delta airlines is currently only up 10%. I just made a 25% return on my $ in 2 days. The writing is on the wall for a NWA/Delta merger with NWA being the initiator.

Where do you get NWA will be the initiator? The articles I have read lately say otherwise. Please show something that states anything close to what you think will happen.

Bye Bye--General Lee