Delta Air Lines buys 49 percent of Virgin Atlantic for $360 million

[redflyer65]

Don't let the General sell you the unicorns and glitter.......The SS Delta is steaming fullspeed into an iceberg. Not only did it lose 50-60 million blamed conveniently on Sandy, they need to invest MORE to make it work (See last sentence below!)

Lumberg for President. A realist who calls it like he sees it, instead of unicorns and glitter from the Genital.

 

[EngineThunder]

General,
Serious question: Does it bother you that after the TA is signed and delivered that Delta finds $360 million to spend elsewhere instead of giving back to the pilots what was stolen in BK?

 

[General Lee]

General,
Serious question: Does it bother you that after the TA is signed and delivered that Delta finds $360 million to spend elsewhere instead of giving back to the pilots what was stolen in BK?

Does it bother me? The company made $2.5 billion in ancillary revenue last year alone. They make money. They are paying off debt too, which will help all of us. Would I have liked a contract that gave us all our money back from the BK and more additionally? Sure. But, that is just unrealistic. I think the TA was good because it was short in duration, almost a 20% raise in 3 years, and addressed scope concerns (parked a lot more RJs that came in), plus had a deal for 717s that MAY NOT HAVE come had the 50 seaters stuck around for 3 more years. Lumberg probably does disagree, but he doesn't know either. Overall, it was a good deal for a short duration contract. So, no, it doesn't really bother me. You can't go for the Moon, because that will never produce results. Shorter contracts with substantial raises (15-20%) is the wave of the future.


Bye Bye---General Lee

 

[BILL LUMBERG]

General,

You ARE correct, I disagree.

I may not know about the future, but fear drives stupid decisions, fear of management, fear of the economy, fear of saying NO.

When we had probably the BEST leverage we have ever had in my career and we settle for this zero sum turd of a contract and cheer for somebody's hand-me-down 717s and post on here about how great our management is, you are incorrect.

Management knows we will never say no EVER......and now everybody I talk to is having buyer's remorse over this stupid contract. Call me sour grapes, but we could have done WAYYYYY better under a different MEC who actually fights for it's pilots rather than try to get invited to management Birthday parties and share circle jerk articles written about how great they are together.

I was told we would get paid when Delta is profitable. Well here we are, with not much to show for it. Hey didn't somebody say we didn't leave anything on the table? Funny how EVERYBODY else at Delta gets the same raises we do? Funny? No money left?

Anyway, rant over......Continue your love affair with SWA General.

 

[General Lee]

General,

You ARE correct, I disagree.

I may not know about the future, but fear drives stupid decisions, fear of management, fear of the economy, fear of saying NO.

When we had probably the BEST leverage we have ever had in my career and we settle for this zero sum turd of a contract and cheer for somebody's hand-me-down 717s and post on here about how great our management is, you are incorrect.

Management knows we will never say no EVER......and now everybody I talk to is having buyer's remorse over this stupid contract. Call me sour grapes, but we could have done WAYYYYY better under a different MEC who actually fights for it's pilots rather than try to get invited to management Birthday parties and share circle jerk articles written about how great they are together.

I was told we would get paid when Delta is profitable. Well here we are, with not much to show for it. Hey didn't somebody say we didn't leave anything on the table? Funny how EVERYBODY else at Delta gets the same raises we do? Funny? No money left?

Anyway, rant over......Continue your love affair with SWA General.

Some people want to hit a homerun everytime, maybe that is you Bill. I am more realistic. I would rather get smaller contracts with pretty good payouts. A 3 year contract with an almost 20% raise is pretty darn good. There were things that weren't great, but if we try to get a HUGE contract each time, it just won't happen. It won't. We can try, but it will drag out. If this was a 5 year contract with about 20%, then I would have said no way. Other things like calendar day for 3 day allnighter trips, the 717s, tighter scope overall, more credit for training and vacation, along with more sick time per year, covered a lot of the basics that needed to be filled. It wasn't as bad as many on here believe, and negotiations will start again in 2 1/2 years. Not bad at all. But hey, you've got your opinion and I respect that.


Bye Bye---General Lee

 

[Hamfighter]

A good, concise explanation...

Delta And Virgin Atlantic To Merge


December 17, 2012 | Filed Under » Investing News, Stock Analysis, Stocks
Tickers in this Article » DAL


Like finding out that your daughter was engaged to the boy you thought she would never date, the December 11 announcement of a merger between Delta (NYSE:DAL) and Virgin Atlantic came as a complete surprise to most. Delta will purchase Singapore Airlines' 49% stake in Virgin Atlantic for $360 million, according to CNN. That is a $600 million loss for Singapore Airlines that purchased the stake for $960 million in 2000. Why would Delta want a stake in an airline that operates primarily outside of the United States? There is a reason for this odd couple arrangement, and it is big.


It Is a Lucrative Route
Delta is the second largest airline in the U.S. With that in mind, it would make sense that a carrier of that size would offer as many flights from New York to London as possible - especially when a look at the airline industry shows that this is one of the most lucrative routes for business travelers.

Presently, however, Delta only offers three flights from New York to London each day. The partnership between British Airways and American Airlines results in 14 daily flights from New York to Heathrow, a dominant 60% market share.

Providing the merger manages to jump through all the appropriate regulatory hoops by the beginning of 2014, Delta will have access to nine flights from New York to London daily. Some transportation analysts believe that the merger could result in a 38% market share of the route. That is up from the current 10% share they have now.

Why Not Just Schedule More Flights?
They would if it were that easy. London's Heathrow Airport is operating at capacity. With the failed attempt to gain approval to expand Heathrow, airlines do not have the luxury of adding to their routes. This is what makes the Delta - Virgin merger so attractive. Virgin would be giving Delta even more options moving forward. It's definitely something to consider for those analyzing this acquisition announcement closely.

There Are Other Benefits
In the U.S., Delta will be the carrier of choice for flights inbound to New York and other airports servicing the London market. On the United Kingdom side, Delta benefits from having more flights to Heathrow, which opens up other markets throughout Europe and Asia. In 2008, Delta purchased rival Northwest Airlines. Delta did this to gain access to Northwest's extensive Asian network. This, along with its partnership with Air France, gives it many more future options for expanding internationally.

Virgin is a much smaller airline than Delta. Rising fuel costs and the eurozone crisis have hit the airline hard, resulting in a loss of $129 million in the past fiscal year. The merger with Delta gives it access to more American travelers and will likely increase capacity for the airline.

Why Didn't Delta Buy Virgin As They Did Northwest?
First, because global airline laws generally prohibit an airline from taking more than a 50% stake in an airline operating outside of their headquartered country. Second, Virgin's 51% stakeholder, Sir Richard Branson has indicated that he has no plans to exit the airline business. He stated that he sees the merger as a way for the two airlines to add even more flights throughout the world. Analysts say that the merger will largely equate to business as usual for Virgin.


The Bottom line
Mergers resulting in consolidation in the airline industry have swept throughout the world as airlines struggle to cope with the rising costs of fuel and other associated charges. This merger will give Delta access to one of the most lucrative business travel routes and that, in turn, will allow the airline to service more customers on both sides of the Atlantic. If you're interested in investing in travel and tourism, dig deeper into this deal. At the time of writing, Tim Parker did not own any shares in any company mentioned in this article.