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Delta (Anderson) denies any merger talks with United

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You know how to tell if your airline's CEO is lying to you?

His lips are moving.


Looks like the General will soon be leaving Song for Ted.
 
November 14, 2007

Atlanta – Captain Lee Moak, master chairman of the Delta Air Lines pilots union, represented by the Air Line Pilots Association, Int’l (ALPA), responds to comments by Pardus Capital Management LP regarding Delta's role in consolidation by issuing the following statement:

"Today’s Wall Street Journal article discusses a letter from hedge fund Pardus Capital Management LP to Delta's senior executives encouraging a merger between Delta Air Lines and United Airlines.

"The Delta pilots' union is aware of the recent overtures made by Pardus and other hedge fund managers who see value in the 'financial transaction' aspect of a consolidating event such as a merger, often without regard for the long-term consequences to the corporations, the employees, the traveling public or the communities we serve.

"Many analysts have suggested that airline industry consolidation is inevitable. The Delta pilots are not opposed to a rational and sensible consolidation scenario. The 'right' merger opportunity could draw our support and result in a successful merger. However, we are not interested in a transaction just for transaction’s sake.

"It is crucial that all parties involved understand this very important point, that the Delta pilots will be critical participants from the beginning in any consolidation discussion and potential resultant event, not an afterthought to be considered at a later date. Any consolidating event which involves the Delta pilots will not happen without our active participation and consent."
 
As if two threads on this subject werent enough.....here is the third.
 
Or you could believe this...


AP
Delta, United Discuss Combining
Wednesday November 14, 3:49 pm ET
By Harry R. Weber, AP Business Writer Official Says United, Delta Have Discussed Combining the Nation's No. 2 and No. 3 Carriers
ATLANTA (AP) -- UAL Corp.'s United Airlines and Delta Air Lines Inc. have been discussing a combination between the nation's second- and third-largest carriers that would keep the United name and the corporate headquarters in Chicago, The Associated Press has learned.
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if(window.yzq_d==null)window.yzq_d=new Object();window.yzq_d['S8JgFELaX.c-']='&U=13b1kd26q%2fN%3dS8JgFELaX.c-%2fC%3d607306.11092922.11894151.1435155%2fD%3dLREC%2fB%3d4863499';Shares of both airlines surged on the news.
There is a sense of urgency in the talks, which have been going on for some time and continued as recently as a week or so ago, an official with knowledge of the talks said Wednesday. The official spoke on condition of anonymity because the person was not authorized to speak publicly.
"They want to get something done before a new administration gets in and so they get the clock ticking on" federal regulatory approval, the official said.
The exact financial details of the transaction being discussed are not clear. But the talks involve United being the name of the combined airlines, the headquarters staying in Chicago and Delta's Atlanta hub being an operational center for the two carriers, the official said. One possible scenario involves Delta CEO Richard Anderson being the chief of the combined airline, the official said.
Delta also has had talks with other airlines, the official said, without specifying which airline or the status of any such talks.
A spokesman for Chicago-based United did not immediately return a call Wednesday seeking comment. Delta spokeswoman Betsy Talton declined to comment.
Shares of Delta rose $1.92, or 10.2 percent, to $20.67 in afternoon trading. UAL shares gained $4.20, or 9.7 percent, to $47.70.
Delta said in a statement Wednesday that its board has established a special committee to work with management to review and analyze strategic options for the airline. Top executives have said recently they are trying to determine whether consolidation makes sense for Delta.
When Anderson was named in August as Delta CEO to replace Gerald Grinstein, there was immediate speculation in the investment community that Delta and Northwest might eventually merge. Anderson is a former CEO of Northwest Airlines Corp.
Anderson immediately tried to dispel such speculation, telling Delta employees he wasn't coming to Delta to facilitate a deal with Eagan, Minn.-based Northwest.
Delta's statement Wednesday was responding to pressure by a hedge fund that owns 7 million Delta shares to consider combining with UAL.
Pardus Capital Management LP said in a letter to Delta's top management on Tuesday that it is "imperative" that the company undertake a merger transaction with another airline in view of soaring fuel prices and what it described as the increased risks of going it alone.
"Consolidation is needed to de-risk the industry and time is of the essence as now is the right regulatory environment," said Karim Samii, president of Pardus, and Shane Larson, a principal.
The hedge fund executives said they had determined since making a similar recommendation in a Sept. 7 letter that "the most attractive and practical combination would be a Delta and United Airlines combination."
It cited figures from a consulting firm estimating that the benefits of such a pairing would be about $585 million and said a combined Delta-United would boast a broader network than any other combination.
Pardus also owned 5.6 million shares in Chicago-based UAL as of Sept. 30.
Pardus executives said a Delta combination with Northwest would produce even bigger benefits of about $1.5 billion, primarily from combining the smallest hubs -- Detroit/Cincinnati and Memphis/Atlanta.
"However, Northwest may not enable Delta to complete the breadth of network that business travelers require, resulting in the need for a potential follow-on transaction at a later date in order to achieve the same breadth of network that UAL would provide out of the box."
Pardus, citing information provided by the air transport consultancy Simat, Helliesen & Eichner Inc., said a third potential combination, with Continental Airlines, would produce no synergies and would raise other challenges.
Robert Mann, an airline consultant in Port Washington, N.Y., said United's broad Pacific network and Delta's huge Atlantic presence would complement each other. However, he said, combining fleet information systems and labor could pose challenges. The biggest problem would be that neither carrier has any recent track record of integration, he said.
"I would see this as a very risky move from the standpoint of the actual implementation," Mann said.
Associated Press Business Writer Dave Carpenter in Chicago contributed to this report



Well, if you read my post on the top, it states that Anderson was replying to THE AP story that you have above. So, he denied it. Overall, I think they are looking at a possibility of a merger, but only the right one that makes sense. I also highlighted something above that shows why a UAL and DL merge may not be very smart.

Bye Bye--General Lee
 
This is probably a pretty sad day for the General. I'm sure he was hoping to get aquired by SWA so he could at least get a pay raise. I was kinda hoping for that too. I figure if he was making SWA money then he could afford better hobbies than posting on FI and asking dudes to double team his wife.
 
Is it me or does anyone else think the General drinks the company kool-aid with every meal.


Goat

Hey, I call it like I see it. I don't see how UAL and DL would be a good fit, only the hedge funds do. I can see a NWA and DL merge being a better fit, though. I never said that we would never merge with anyone, rather I think our leaders are looking for that "right fit." You need to quit drinking all together.

Bye Bye--General Lee
 
This is probably a pretty sad day for the General. I'm sure he was hoping to get aquired by SWA so he could at least get a pay raise. I was kinda hoping for that too. I figure if he was making SWA money then he could afford better hobbies than posting on FI and asking dudes to double team his wife.


Heck no. The pay raise would be nice, but just the possibility of flying to Lubbock or Midland/Odessa makes me want to puke. No thanks. I think any day is a good day without having to fly to West Texas.

Bye Bye--General Lee
 
Hope they don't ask you guys to lower the bar again once you are together. I hear these transitions can be tough. Good luck.
 

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