? for delta an USair guys

[Terrain Terrain]

Are you guys/Alpa pissed that your pensions got busted, and now 9 billion shows up outa no where to play with. Really?, I wana know?, Isnt this the time where you guys tell Usair/Delta Mngt "give us everything back", or burn the place down?

Makes no sense to me?

 

[TWA Dude]

The money didn't show up out of nowhere and it isn't to play with; it comes from Citibank specifically to acquire Delta and they expect to get it back with interest.

 

[On Your Six]

Here we go again...

The Delta merger with USAirways won't happen for many reasons including: fleet complexity (no synergy with many different fleet types - only 757/767 are similar but they still have different engines) and anti-trust issues (route networks completely overlap domestically). Parker can't even handle the integration currently on his plate. The media paints an optimistic picture but that is not the case. Both Delta and USAirways are currently profitable and the union of the two will only result in reduced capacity and reduced competition in the Southeast - no way the DOJ will allow that.

A merger between Delta and UAL would make more sense strategically because UAL adds Asian routes to the equation whereas USAirways adds no new routes (just a complete domestic overlap). But, airline mergers can be difficult to integrate (just look at America West and USAirways) and a case for a stand alone Delta post-bankruptcy (after renegotiating leases and adding more lucrative international routes) can be made quite convincingly.

 

[whymeworry?]

Let's not give the DOJ too much credit here. Afterall, they are government... i.e. not exactly as competent and swift and the lawyers and IBankers they are up against. Expect the DOJ to get it's clock cleaned if it comes to that.

A lot of pilots, on all the boards all over the web, are saying this deal will never fly. Fact is, this deal is an offer to the CREDITORS. At this point, they are more in control of the outcome of DAL than DAL mgmt is. If you were a creditor, and offered 10% of what you are owed by DAL or 100% of what you're owed by Citigroup/ Am West, what option would you take? The same company that is screwing you out of your hard-earned money is about to become the victim of a hostile takeover and you'll get paid all money owed in the process. I think the choice is obvious. Expect the creditors in this process to put the weight of the world on the bancruptcy judge to approve this deal.

Any other period in DAL's history I might agree this won't fly but, because they are not in control of their own company, this deal has a huge chance of getting done. And it only puts more pressure on NW since they are in CH11 as well. I would expect to see a similar move for NW within 60 days unless their dream-team lawyers can write in some language now to prevent it.

Make no mistake about it, Grinstein and his team will get paid big bucks to pipe down and make this deal work. He was planning on retiring in 6 months anyway so what does he care? The employees of DAL already hate him as it is, might as well get paid... as if he would care if his employees respected him. Come on guys, this is Wall Street at work. This deal will happen, IMO.

Now whether it will be successful in the LONG run. That's a huge question mark. I'm absolutely certain, given poor economic conditions for airlines, that within 3-7 years Citigroup will be whinning that airline investing is a tragic waste of captial. I wouldn't be surprised if they use their losses as pressure on mgmt to go to the employees for help. Pathetic how that works. The creditors are stupid enough in the first place to invest in airlines then when they get spanked they cry that the employees need to help bail them out. Citigroup is the villan here, IMO.

 

[michael707767]

If you were a creditor and offered 10% of what you are owed by DAL or 100% of what you're owed by Citigroup/ Am West, what option would you take?

first of all, the creditors do not get 100% of what they are owed with this deal. Second, half what they will be paid is in USAir stock. Last, we dont know what they would have recieved if Delta had stood alone. If this merger makes sense and works, the stock the creditors would recieve will hold value or appreciate. If not, that stock could go down and the creditors get even less than they would had Delta stayed alone. It will all come down to whether or not Parker can convince the creditors the merged airline will be more successful than an independent Delta. That's a tough hurdle to cross.

This merger does not make sense as it stands today. It would likely get DOJ approval, but only after they have to divest some many routes that the "synergies" Parker mentions no longer exist. Further, Parker will have to convince labor that this deal is good for them. And we all know the one group who will suffer the most in this deal is labor.

 

[9rj9]

agree

I think this will happen, DOJ, DOT don't really care. Parker doesn't care if this works or not, he gets paid to put it together not to make it a reality. All Airlines are basically disfunctional, now its just a gaint disfunctional airline. Wall street loves it since they will make serious bank off the backs of all the airline employees.

This puts tremendous pressure on Delta, now the creditors will be less than willing to accept whatever Delta gives them because they now have an option. Could have been a ploy to weaken delta as it tries to exit bankruptcy.

 

[9rj9]

Parker will sucker labor in....

Why would labor have to be onboard, they've rolled-over so many times already. He'll throw the old guys a bone and they in turn will throw the young ones and the delta pilots under the bus.

 

[FDJ2]

Fact is, this deal is an offer to the CREDITORS. At this point, they are more in control of the outcome of DAL than DAL mgmt is. If you were a creditor, and offered 10% of what you are owed by DAL or 100% of what you're owed by Citigroup/ Am West, what option would you take? The same company that is screwing you out of your hard-earned money is about to become the victim of a hostile takeover and you'll get paid all money owed in the process. I think the choice is obvious. Expect the creditors in this process to put the weight of the world on the bancruptcy judge to approve this deal.

The fact is the CREDITORS are not in the drivers seat either right now, the Judge is and hostile takeovers during BK are always a long shot. Remember Bankruptcy protection is a management tool to protect the company from creditors and renegotiate contracts more favorable to the company during its period of "exclusivity", it is not a process to give creditors a greater voice in the company. The judges main concern is NOT the creditors, it's the viability of the company and getting the company out of bankruptcy. DAL is on track to do just that.

Remember when the pilots were in an 1113c procedure, everyone and their brother in law touted the same line. "The judge could careless about the rights of the pilots, the system is heavily weighted towards management." Well guess what, the pilots are unsecured creditors, what voice do the pilots have, about the same as any other creditor in the process.


Maybe this merger will take place, but I don't give it much of a chance, for now DAL management has "exclusivity" until February 15, 2007. There is no sign of a creditors revolt and DAL is moving smoothly through the BK process and is ahead of plan in its performance numbers. I expect that a Plan of Reorganization will be filed early in the Spring and DAL will exit BK shortly thereafter. Parker himself said most of the benefit of this deal would come if it was consumated during the BK process, I really don't think he will have a chance to consumate anything with DAL in the short time remaining between now and the submission of the POR. Once the POR is submitted for all practical puposes the BK process will be over. If Parker is still interested, he can always try another hostile takeover after BK exit.

 

[FDJ2]

Could have been a ploy to weaken delta as it tries to exit bankruptcy.

That is quite possible.

 

[whymeworry?]

first of all, the creditors do not get 100% of what they are owed with this deal. Second, half what they will be paid is in USAir stock. Last, we dont know what they would have recieved if Delta had stood alone. If this merger makes sense and works, the stock the creditors would recieve will hold value or appreciate. If not, that stock could go down and the creditors get even less than they would had Delta stayed alone. It will all come down to whether or not Parker can convince the creditors the merged airline will be more successful than an independent Delta. That's a tough hurdle to cross.

This merger does not make sense as it stands today. It would likely get DOJ approval, but only after they have to divest some many routes that the "synergies" Parker mentions no longer exist. Further, Parker will have to convince labor that this deal is good for them. And we all know the one group who will suffer the most in this deal is labor.

I agree with you, Michael. I was only using the "10% vs. 100%" creditor settelments to simplify the arguement. Certainly some creditors will get more than others and some will bite on the deal while others won't. I am merely trying to illustrate the point that there will be tremendous amount of pressure on the judge to pass muster on this deal. Who knows, maybe DAL mgmt can put on a better performance with the creditors and convince them that DAL is better off going it alone. I suspect by this point, however, the creditors of DAL are pretty upset with mgmt and may be more inclined to force DAL executives into a weaker position.


Believe me when I tell you, I hope my sentiments are DEAD WRONG. I don't want to see this or any merger as it is too detrimental to labor. Somebody please post my comments in 12 months and laugh at me for being so frigging wrong.

 

[~~~^~~~]

It is just sad that we pilots get into the business with time horizons that stretch to our retirement, senior on the biggest thing the airline has. We run our careers being careful, on and off the job, maintaining our health and our proficiency.

In contrast, most of our managers run the airline focused only on the next quarter. If one airline fails, they don't too much care, as long as they got an increase in title that makes them more markable for the next opportunity with stock options and better offices.

Somewhere around 20% of major airline pilots end up with a carrier that survives as long as their careers do.

 

[whymeworry?]

Somewhere around 20% of major airline pilots end up with a carrier that survives as long as their careers do.

Interesting. From where did you derive that figure?

 

[On Your Six]

I think this will happen, DOJ, DOT don't really care. Parker doesn't care if this works or not, he gets paid to put it together not to make it a reality. All Airlines are basically disfunctional, now its just a gaint disfunctional airline. Wall street loves it since they will make serious bank off the backs of all the airline employees.

This puts tremendous pressure on Delta, now the creditors will be less than willing to accept whatever Delta gives them because they now have an option. Could have been a ploy to weaken delta as it tries to exit bankruptcy.

So, you "think" this will happen. This merger does not make any sense strategically - UAL would be a far better fit due to its complementary Asian routes. What does USAirways have to offer besides billions of dollars lined up by some big bank? Nada. The fit could not be worse in terms of route overlap and fleet complexity. Don't believe the media hype...

 

[Noserider76]

I think the merger has very little chance of happening. Assuming it makes it through the other hurdles (doubtful), the new Democratic congress will see the loss of hubs, jobs, and competition and the increase in prices that will definitely result and pressure the DOJ to kill the deal. Way too much overlap there. US/AWA is basically just a much smaller DL with a PHX hub and a LAS operation.

It will, however, be very successful in diverting the attention of both DL and US/AWA from the job of running their respective airline. This will be a boon for their competitors.

This is just about making a few people very rich. Parker himself cashed in 9 Mil in stock in August while paying his employees some of the lowest wages in the industry.

 

[Tejas-Jet]

Here we go again...
The Delta merger with USAirways won't happen for many reasons including...

Date of Hire=Unity=Date of Hire

Tejas

 

[800Dog]

I think this will happen, DOJ, DOT don't really care. Parker doesn't care if this works or not, he gets paid to put it together not to make it a reality. All Airlines are basically disfunctional, now its just a gaint disfunctional airline. Wall street loves it since they will make serious bank off the backs of all the airline employees.

This puts tremendous pressure on Delta, now the creditors will be less than willing to accept whatever Delta gives them because they now have an option. Could have been a ploy to weaken delta as it tries to exit bankruptcy.

Not so sure about that. The head of the aviation subcommittee, Oberstar I believe, was on CNBC two days ago and was not in the least bit in favor of this merger. Only time will tell.

 

[Flys4Fun]

the new Democratic congress will see the loss of hubs, jobs, and competition and the increase in prices that will definitely result and pressure the DOJ to kill the deal.

As opposed to a restructuring plan by Delta? Which is better for the industry? I don't think the DOJ will step in on the merger. The common comparison used in this DOJ argument is the DL/US merger and the UA/US merger attempt six years ago. Conditions within the industry have changed dramatically including airlines racking up a $40 billion bill with the government. Southwest and jetBlue also "encroached" if you will on PIT, a secondary hub for US.

US/AWA is basically just a much smaller DL with a PHX hub and a LAS operation.

While I do agree that there is overlap, US/AWA does not only have hubs in PHX and LAS. Our current hubs are PHX, LAS, CLT, and PHL. Delta has ATL, CVG, SLC, and JFK. Theres nothing to say that an expansion in any of these cities is not possible.


Given the rally of support the lenders are showing, I think this merger will happen.

 

[General Lee]

As opposed to a restructuring plan by Delta? Which is better for the industry? I don't think the DOJ will step in on the merger. The common comparison used in this DOJ argument is the DL/US merger and the UA/US merger attempt six years ago. Conditions within the industry have changed dramatically including airlines racking up a $40 billion bill with the government. Southwest and jetBlue also "encroached" if you will on PIT, a secondary hub for US.



While I do agree that there is overlap, US/AWA does not only have hubs in PHX and LAS. Our current hubs are PHX, LAS, CLT, and PHL. Delta has ATL, CVG, SLC, and JFK. Theres nothing to say that an expansion in any of these cities is not possible.


Given the rally of support the lenders are showing, I think this merger will happen.

I am glad you think this will happen. Most of the creditors on the all important Creditor Committee currently don't feel that way, and neither does the Chairman of the Transportation sub-committee (oberstar). ATL is by far the busiest airport in the World, with DL flying 80% of the flights. CLT, USAir's largest hub, is 220nm away. Hmmmm. We both have NYC Shuttles. HMMMM. We both have hubs in the West that are within 300 nm of each other. (SLC--LAS--PHX) Hmmmm. None of our fleets are even close. Hmmm. You can't even get your own employee integration right, and it has been 14 months. Hmmmmm. UAL/US was disapproved by the DOJ because of one hub overlap, and we would have 3 areas of contention. And conditions now have changed? Oberstar said most airlines are profitable again, and even Boyd said most airlines are running 80% full. Sounds like the late 90s. If a weak carrier wanted to get bought out (like USAir did with AWA) then it may be more acceptable. But, you now have a hostile takeover with an airline that is becoming profitable, and wants to be a stand alone. Big difference. And the BK judge can protect us, Congress will support us, and the DOJ will give you the thumbs DOWN. Your lenders may be giving you support, but so are ours. Thanks to the bid by USair, our worth has shot up in the eyes of Wall St. Our own exit financiers now have more confidence we are worth something, since Wall St bumped USAir's stock up 16% on Nov 15th. That showed that they thought $8 billion was a STEAL. That means we are worth a lot more. Thanks guys.

And I love your thoughts about "what is better for the industry." Oberstar thinks you are wrong. He again stated everyone is starting to become profitable again. Is he wrong? Are you?


Bye Bye--General Lee

 

[Noserider76]

As opposed to a restructuring plan by Delta? Which is better for the industry?

Given the rally of support the lenders are showing, I think this merger will happen.

Why is a hostile takeover better for the industry than DL's restructuring plan? And who is it better for? I'm curious why you seem to this is a great idea. I'm sure there will be mergers in the industry, this one is just bad on so many levels.

What rally of support by the lenders? I only saw some bondholders trying to get in on the action. The creditors should be paying attention to the massive employee unrest this will create.

 

[JetMonkey]

Well, after a whole week watching all of this I figure it's time I jump and join the bandwagon. Here is one west guy who really does not want this to happen. Consolidate sure, but not with Delta. Sure it's a great airline but I have the same reservations just as most of you on here (overlap, complexcity, and enventually cut backs, etc.) which got me thinking as the day wore on after the initial shock, "why would Parker do this?" as much as a pain in the a$$ he is with our pilot group right now during our current negotiations, there is one thing I'll say about him, he's VERY intelligent, that's why this whole thing had a "what's wrong with this picture" feel to it. It's totally different than the USAir/AWA proposal, east complements west and so forth. And General, I'm not a Parker fan as I just mentioned, but to his defense, one of the reasons the intergration is not done yet is because the arbitrator wasen't availiable all year until now, which was completely out of his control.

So, with all that said are you guys ready for WHAT I think? Now I'm not an MBA, just a west guy who has listen to Parker talk many times and like I said, he's good, he can sell an ice cube to an Eskimo. I think he's bluffing, I believe this whole thing is a trap to lure someone like UAL to come in and take the bait. He has made no secret all along that he believes the industry needs to consolidate, that's a fact. He also has stated and has shown that the best time to do this is when one carrier is in bankrupt. So, he has to act now and instead of waiting for it to happen he throws this proposal out there to get the whole game started. This way he gets another two carriers involved to become one, once UAL or someother gets involved and locked into a bidding war, I think he'll pull out, and go for what he really wants.....

Northwest, which for obvious reasons that everyone can see would be a more complementary merge. Of course, I've known to been wrong before...

 

[Hpilot]

I sure hope you're right. A lot of money however can be made by combining US and Delta then slashing the excess.

 

[General Lee]

I sure hope you're right. A lot of money however can be made by combining US and Delta then slashing the excess.

The routes all overlap. That is nuts. The reason YOUR merger went through was because there was NO overlap. Also, USAir was a willing participant, while DL is not. Local politicians will rally around DL along with Oberstar, who is in charge of the Transportation Sub Committee. But hey, you think there is a lot of money to be made through everyone elses misery, so who cares. Ridiculous.

Bye Bye--General Lee

 

[General Lee]

Well, after a whole week watching all of this I figure it's time I jump and join the bandwagon. Here is one west guy who really does not want this to happen. Consolidate sure, but not with Delta. Sure it's a great airline but I have the same reservations just as most of you on here (overlap, complexcity, and enventually cut backs, etc.) which got me thinking as the day wore on after the initial shock, "why would Parker do this?" as much as a pain in the a$$ he is with our pilot group right now during our current negotiations, there is one thing I'll say about him, he's VERY intelligent, that's why this whole thing had a "what's wrong with this picture" feel to it. It's totally different than the USAir/AWA proposal, east complements west and so forth. And General, I'm not a Parker fan as I just mentioned, but to his defense, one of the reasons the intergration is not done yet is because the arbitrator wasen't availiable all year until now, which was completely out of his control.

So, with all that said are you guys ready for WHAT I think? Now I'm not an MBA, just a west guy who has listen to Parker talk many times and like I said, he's good, he can sell an ice cube to an Eskimo. I think he's bluffing, I believe this whole thing is a trap to lure someone like UAL to come in and take the bait. He has made no secret all along that he believes the industry needs to consolidate, that's a fact. He also has stated and has shown that the best time to do this is when one carrier is in bankrupt. So, he has to act now and instead of waiting for it to happen he throws this proposal out there to get the whole game started. This way he gets another two carriers involved to become one, once UAL or someother gets involved and locked into a bidding war, I think he'll pull out, and go for what he really wants.....

Northwest, which for obvious reasons that everyone can see would be a more complementary merge. Of course, I've known to been wrong before...

Parker may be smart, but there are a lot of smart people on our side too believe it or not. We knew there would be offers, and a plan was generated to be a better stand alone carrier. We also know we have friends on the Creditor Committee. Even Dalpa is a major unsecured creditor on the committee. How will Parker convince Dalpa? He won't. Boeing, Pratt, Coke, Fidelity, and the PBGC? Unlikely.


Bye Bye--General Lee

 

[BILL LUMBERG]

Ya gotta love how the 2 largest receivers of Government aid after Sept. 11 are now using that same taxpayer money so "desperately needed", to buy up other airlines.......

Great industry..........

 

[PHXFLYR]

Ya gotta love how the 2 largest receivers of Government aid after Sept. 11 are now using that same taxpayer money so "desperately needed", to buy up other airlines.......

Great industry..........

I believe the ATSB loans were paid off shortly after the USAirways purchase.
The 8 billion dollars Parker is offering ? 4 billion in financing from Citicorp and 4 billion in USAir stock. Sorry to confuse you with the facts!

PHXFLYR

 

[General Lee]

I believe the ATSB loans were paid off shortly after the USAirways purchase.
The 8 billion dollars Parker is offering ? 4 billion in financing from Citicorp and 4 billion in USAir stock. Sorry to confuse you with the facts!

PHXFLYR

More debt, that will help! We would bring along an extra $9 billion too, with some new plane orders adding more. Sounds like a great idea!


Bye Bye--General Lee

 

[BILL LUMBERG]

I believe the ATSB loans were paid off shortly after the USAirways purchase.
The 8 billion dollars Parker is offering ? 4 billion in financing from Citicorp and 4 billion in USAir stock. Sorry to confuse you with the facts!

PHXFLYR

Without those "facts" Flyer, you could have been a gone relic of deregulation....plain and simple...........sorry to confuse you with the TRUTH!!!

"Ya feel that Sting big boy????............that's Pride F-ing with ya"
Name that film....

 

[Hpilot]

The routes all overlap. That is nuts. The reason YOUR merger went through was because there was NO overlap. Also, USAir was a willing participant, while DL is not. Local politicians will rally around DL along with Oberstar, who is in charge of the Transportation Sub Committee. But hey, you think there is a lot of money to be made through everyone elses misery, so who cares. Ridiculous.

Bye Bye--General Lee

The routes all overlap is exactly the point. Yes, this is different from the America West/US Airways merger. No, I don't want this to go through. Some how I picture you wrapped up in a ball somewhere muttering, "make the bad people go away mommy."

 

[TWA Dude]

Some how I picture you wrapped up in a ball somewhere muttering, "make the bad people go away mommy."

Funny, but that was exactly how I reacted to the AWA/USAir merger announcement. I'm not too fond of mergers...

 

[800Dog]

I believe the ATSB loans were paid off shortly after the USAirways purchase.
The 8 billion dollars Parker is offering ? 4 billion in financing from Citicorp and 4 billion in USAir stock. Sorry to confuse you with the facts!

PHXFLYR

According to USAirways March 2006 10k filing, the loans from the ATSB will be paid off in 2010. Small fact you missed!