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Occam's Razor said:
Honestly!

You kids!

1. The UAL piece was a feint. Make it look bigger...then go smaller...and the DOJ approves it.

2. The rumors of breaking up parts of NWA are a gambit by the two of "2/20" hedge fund boys that hold a big chunk of NWA. They paid a premium to buy the pilot's Claim, and are now holding paper that's $8 "underwater". Poor babies!

3. Those two chuckleheads will probably get a "special dividend" in exchange for buying off on the deal. $4-5 a share in the swap might make them happy. KLM/Air France will probably provide the Euros to shut them up...and thereby raise their stake in the combined airline to 25%.

4. The open issues in consummating a deal are like a 2-acre version of the arcade game, "Whack-A-Mole". The state of Minnesota, along with Oberstar and an array of others, will be thrown a bone. It'll be "jobs" or some other promise.

5. The seniority list integration will be painful (Duh!), but only to those whose expectations were formed in the ether of their "Birthright!" cocoons. If everyone's a little pi$$ed, it's a good deal.

6. The Airlinks will be forced to play a bloodthirsty game of "musical chairs". Wish it weren't so...but it will be. Some will blame ALPA. The smart ones will blame Adam Smith. It'll make the $200-million the RJDC "patriots" mocked in 2000 look like a huge missed opportunity. It'll look like that because it was.

7. NWA will release the Golden Share of CAL to appease the DOJ. CAL is more likely to gobble-up UAL than vice versa. (The sound your jaw makes as it drops reading that is spelled "PBGC")

8. The status of hubs, bases, fleets, is "tactical" right now...not "strategic". No one will know "strategic" until the legacies finish this wave of consolidation.
Click to expand...

All excellent points. Although I'm not too sure about UAL being just a head feint. They might be a close second choice for dance partner.

I never heard much about breaking up NWA, that must be some local chatter up in MSP.
 
So, now that the dance partners have possibly been set (we will wait for official confirmation), what are the odds that the deal will actually get approved? What odds would you give?
 
Occam, FDJ, and others,

Has anyone figured out how this deal makes financial sense for anyone other than maybe AirFrance / KLM?

Delta earlier announced some sort of a partnership with AirFrance that sounded like codeshare, but was obviously a whole lot more based on AirFrance's donation of Heathrow slots.

If we knew who benefitted, we could probably put more of this puzzle together.

Also - what about scope? Occam brings up the Airlinks and Connection carriers. I'm not sure who this will be a bloodbath for, what about these factors?
- Delta wants out of 50 seat contracts that are not voidable. They renegotiated with Republic holdings to upgrade their E135/145's for E170's to get out of 50 seat obligations
- Delta's VP of Ops said he likes the CRJ700/900 as a stop gap until the new generation 100 seat dreamliner tech airplane is brought to market
- NWA is parking some DC-9's. Obviously that airplane is close in capability to a big RJ, even if the -9 is much more comfortable.
- We all know ALPA's history on outsourcing, talk tough and then "surprise"

I floated the idea of a merger involving the connection / airlink carriers too based on a fleet type merger (staple) with date of acquisition fences/bidding and DOH longevity. No one was very interested.

Anyone else want to see "one list" result from this merger? With everyone brought to the negotiating table with "one" management, seems like there is an opportunity to get some flying back to "mainline" with the eventual goal of someday all flying being performed by pilots on "the" seniority list.

As is always the case the difference between opportunity and furlough is going to be scope.
 
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There is still a gaping hole in the new DL/NWA route structure to be filled, which is LA and or SFO. Merging with United left few future growth opportunities, and added a lot of debt. I am sure UA and CAL will merge as a result, and they will become our chief competitor, and that will necessitate a build up for us in UAL's California stronghold. We have the gates in LAX available, as they are currently occupied by Expressjet ERJs. Any planes displaced from CVG or MEM could go West.

Bye Bye--General Lee
 
~~~^~~~ said:
Occam, FDJ, and others,

Has anyone figured out how this deal makes financial sense for anyone other than maybe AirFrance / KLM?

Delta earlier announced some sort of a partnership with AirFrance that sounded like codeshare, but was obviously a whole lot more based on AirFrance's donation of Heathrow slots.

If we knew who benefitted, we could probably put more of this puzzle together.

Also - what about scope? Occam brings up the Airlinks and Connection carriers. I'm not sure who this will be a bloodbath for, what about these factors?
- Delta wants out of 50 seat contracts that are not voidable. They renegotiated with Republic holdings to upgrade their E135/145's for E170's to get out of 50 seat obligations
- Delta's VP of Ops said he likes the CRJ700/900 as a stop gap until the new generation 100 seat dreamliner tech airplane is brought to market
- NWA is parking some DC-9's. Obviously that airplane is close in capability to a big RJ, even if the -9 is much more comfortable.
- We all know ALPA's history on outsourcing, talk tough and then "surprise"

I floated the idea of a merger involving the connection / airlink carriers too based on a fleet type merger (staple) with date of acquisition fences/bidding and DOH longevity. No one was very interested.

Anyone else want to see "one list" result from this merger? With everyone brought to the negotiating table with "one" management, seems like there is an opportunity to get some flying back to "mainline" with the eventual goal of someday all flying being performed by pilots on "the" seniority list.

As is always the case the difference between opportunity and furlough is going to be scope.
Click to expand...

Well, I'm sure that 90%+ of the pilot lists at Compass and Mesaba would wish to be included in any Merger. It's that or update the resumes.

You'd think ALPA, in their rush to clarify what they need to agree to a merger, would consider saving the jobs of their wholly owned affiliates' pilots to be part of the deal.

Yeah, I know, dream on.
 
Not sure if anything significant will be announced or even discussed but DALPA is having a meeting/conference at an Atlanta convention center tomorrow. It will be interesting to see what they say.
 
By Del Quentin Wilber
Washington Post Staff Writer
Tuesday, January 22, 2008

Despite the thorny political landscape on Capitol Hill, airline executives believe the time is still right to put a deal together, some analysts and consultants said. One reason: They believe they will have an easier time passing regulatory muster under the Bush administration than its successor.

Transportation Secretary Mary E. Peters, who would advise the Justice Department on the affects of an airline merger, signaled that the executives are probably right.

Citing the economic challenges facing the industry, Peters said in an interview that she believes "there is going to be some consolidation. "To the greatest extent that we can let the market work unfettered, the better off we are as a country," she said, adding that her agency would weigh each proposal on a case-by-case basis.

"Generally, airline mergers are not good for airline employees or consumers," said Rep. Jerry F. Costello (D-Ill.), chairman of the House aviation subcommittee, adding that he would hold hearings into any announced deals. "When airlines merge, it means there are fewer airlines, less competition and higher prices. They cause me grave concern."
Sen. Byron L. Dorgan (D-N.D.) expressed similar misgivings, saying, "I don't think any of the airline problems are going to be solved by airlines getting bigger."

Although lawmakers play no official role in the regulatory process, their attitudes can influence the ability of air carriers and financial backers to finish deals.

http://www.washingtonpost.com/wp-dyn/content/article/2008/01/21/AR2008012102056_2.html
 
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~~~^~~~ said:
Also - what about scope? Occam brings up the Airlinks and Connection carriers. I'm not sure who this will be a bloodbath for, what about these factors?
- Delta wants out of 50 seat contracts that are not voidable. They renegotiated with Republic holdings to upgrade their E135/145's for E170's to get out of 50 seat obligations
- Delta's VP of Ops said he likes the CRJ700/900 as a stop gap until the new generation 100 seat dreamliner tech airplane is brought to market
- NWA is parking some DC-9's. Obviously that airplane is close in capability to a big RJ, even if the -9 is much more comfortable.
- We all know ALPA's history on outsourcing, talk tough and then "surprise"

I floated the idea of a merger involving the connection / airlink carriers too based on a fleet type merger (staple) with date of acquisition fences/bidding and DOH longevity. No one was very interested.

Anyone else want to see "one list" result from this merger? With everyone brought to the negotiating table with "one" management, seems like there is an opportunity to get some flying back to "mainline" with the eventual goal of someday all flying being performed by pilots on "the" seniority list.

As is always the case the difference between opportunity and furlough is going to be scope.
Click to expand...

I think this should be ALPA's top priority during the coming mergers. More good would be done for the careers of all pilots if we could get all 70+ seat flying done by mainline pilots. We all know the -9's are going to be replaced by E-175's and that DAL wants to have lots of CRJ-900's. That is alot of jobs that mainline guys now have. I know it would suck for those at the connection carriers to not have that flying, but in the long run your careers would be better if that flying was done by mainline pilots.
 
Truckdriver said:
I think this should be ALPA's top priority during the coming mergers. More good would be done for the careers of all pilots if we could get all 70+ seat flying done by mainline pilots. We all know the -9's are going to be replaced by E-175's and that DAL wants to have lots of CRJ-900's. That is alot of jobs that mainline guys now have. I know it would suck for those at the connection carriers to not have that flying, but in the long run your careers would be better if that flying was done by mainline pilots.
Click to expand...


Well, Lee Moak continues to BRAG that he can stop any merger. If he wants this to go forward, he had better restore some of the lost wages/rules, save jobs, and tighten scope. Can he do it? I don't know---but he brags that he can stop a merger. Let's see him play hardball. And, job protections are a MUST.


Bye Bye--General Lee
 
Truckdriver said:
I think this should be ALPA's top priority during the coming mergers. More good would be done for the careers of all pilots if we could get all 70+ seat flying done by mainline pilots. We all know the -9's are going to be replaced by E-175's and that DAL wants to have lots of CRJ-900's. That is alot of jobs that mainline guys now have. I know it would suck for those at the connection carriers to not have that flying, but in the long run your careers would be better if that flying was done by mainline pilots.
Click to expand...


I 100% agree!!!
 
General Lee said:
Well, Lee Moak continues to BRAG that he can stop any merger. If he wants this to go forward, he had better restore some of the lost wages/rules, save jobs, and tighten scope. Can he do it? I don't know---but he brags that he can stop a merger. Let's see him play hardball. And, job protections are a MUST.
Bye Bye--General Lee
Click to expand...

Agreed. Any pay raises, equity, etc. mean nothing if it is for a company that needs to "synergize" to the tune of 1000's of jobs lost. Of course they will claim that their will be none, blah, blah, but look at the strength of any no furlough clauses re: Force Majeure.

The hammer will drop slowly after the fact once the party is over.

Watch their feet, not their lips
 
Old Crow said:
Maybe the Northwest hangar in ATL will have the lights back on soon...
Click to expand...

Doubtful. It's a Superfund site due to massive amounts of organic solvents and heavy metals from electroplating on site. We use their parking lot, and they had to do a huge cleanup and sealant operation before they could even let us in there.
 
I don't see massive flight crew job losses due to the lack of significant route overlap in a DAL-NWA merge.

I do however see massive cuts in management and operations since each airline has duplicate HQs (or GOs in ATL speak).

The true blood bath will be in the cubicles, not the cockpits.
 
John Pennekamp said:
I don't see massive flight crew job losses due to the lack of significant route overlap in a DAL-NWA merge.

I do however see massive cuts in management and operations since each airline has duplicate HQs (or GOs in ATL speak).

The true blood bath will be in the cubicles, not the cockpits.
Click to expand...

What if 100+ DC9's are parked?
 
General Lee said:
Well, Lee Moak continues to BRAG that he can stop any merger. If he wants this to go forward, he had better restore some of the lost wages/rules, save jobs, and tighten scope. Can he do it? I don't know---but he brags that he can stop a merger. Let's see him play hardball. And, job protections are a MUST.


Bye Bye--General Lee
Click to expand...
You can't "tighten" scope like a leaky radiator clamp on the General Lee, with good results. ...need to yank the 318, 2 Barrell, out of the General Lee and find us a 440 Six Pack. Just like there is no substitute for cubic inches, there is no substitute for unity when it comes to making power.

Anything other than one list is going to continue to offer management outsourcing choices.

With 100 DC-9's getting parked and the company's balance sheet viewed as pillage and plunder, we need to ensure our employers remain in the flying business.

(Is it just me, or did the airlines chase the travel agents out of the business and now they want to be booking agents for subcontracting airlines?)
 
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~~~^~~~ said:
You can't "tighten" scope like a radiator clamp on the General Lee. To fix scope you are going to have to design it so that it takes pilots in, brings them together and puts them on one list with no easy ways for management to obtain substitutes.

Need to yank the 318, 2 Barrell out of the General Lee and find us a 440 Six Pack. Just like there is nu substitute for cubic inches, there is no substitute for unity when it comes to power.
Click to expand...

Well said. I do believe that DALPA arrogance is going to cause us all to miss another golden opportunity to achieve inclusive scope.
 
GogglesPisano said:
What if 100+ DC9's are parked?
Click to expand...

They will be parked and they will be replaced by E-175's and CRJ-900's. That is why we need DALPA and NWALPA to secure all 70+ seat flying back to the mainline pilots. That is the only way to secure no furloughs here. What we don't want to see is some jet-for-jobs deal that lets furloughed guys go fly those jets at the regional carriers.
 
Truckdriver said:
They will be parked and they will be replaced by E-175's and CRJ-900's. That is why we need DALPA and NWALPA to secure all 70+ seat flying back to the mainline pilots. That is the only way to secure no furloughs here. What we don't want to see is some jet-for-jobs deal that lets furloughed guys go fly those jets at the regional carriers.
Click to expand...

If anything RJ's are going to be parked. And yes, hopefully lots of them.

You need to get over the fact the DC9's are "old". They are completely paid for, and fill the 100-120 seat market for which there in no other aircraft at the moment. They have the highest load factor of any of the NB aircraft. The DC9's make a lot of $$, as opposed to the RJ's that bleed it at $100/bl even with guaranteed revenue from the mainline. While some markets can be served by the E175, many cannot. There are not 100 E195's out there, and even if they were they would be flown at the mainline with existing Scope.

The reports of the imminent death of the DC9 are way premature.
 
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Truckdriver said:
They will be parked and they will be replaced by E-175's and CRJ-900's. That is why we need DALPA and NWALPA to secure all 70+ seat flying back to the mainline pilots. That is the only way to secure no furloughs here. What we don't want to see is some jet-for-jobs deal that lets furloughed guys go fly those jets at the regional carriers.
Click to expand...


Cant happen per NWA contract. If the compass operation and pilots get absorbed into nwa and the 175s go to nwa then maybe but doubtful. The reduction in DC9s were already announced. They are going down to 68 dc9s. I do agree with you though that the 175s need to be on the mainline ticket and fleet but with dc9 payrates;)
 
Fly4hire said:
If anything RJ's are going to be parked. And yes, hopefully lots of them.

You need to get over the fact the DC9's are "old". They are completely paid for, ....

The reports of the imminent death of the DC9 are way premature.
Click to expand...
Well not according to Delta.

This morning's conference call says the RJ's have already been brought down to the minimum utilization called for in the contracts. The next adjustment to capacity would be lowering mainline utilization on days of the week with traditionally soft demand. The next step after that would be parking airplanes which cost little money (small, or no payments) to park - which are the 88's and DC-9's.
 
~~~^~~~ said:
Well not according to Delta.

This morning's conference call says the RJ's have already been brought down to the minimum utilization called for in the contracts. The next adjustment to capacity would be lowering mainline utilization on days of the week with traditionally soft demand. The next step after that would be parking airplanes which cost little money (small, or no payments) to park - which are the 88's and DC-9's.
Click to expand...

They said that could be a step, not that it will be the next step, right? If oil hits $150 a barrel, then lot's of things will stop--including most cars. The MD88s will replace RJs in markets that are not profitable, and take away frequency, which will funnel pax onto those MD88s.

Bye Bye--General Lee
 
They suggested the first step had already been taken, which is what I assumed weeks ago when Comair's flying got disproportionately whacked. Delta is at the low limit of the RJ flying it has to pay for.

Sure seems like there are already quite a few long layovers because they are not moving the airplane on days with low load factors.

I was impressed that they have several plans for 2008 with a lot of flexibility in there to be proactive.

You put all the pieces together and if the NWA deal happens, those 9's are parked unless there is really a need for them. Delta's already fat on similar aircraft and wants the domestic market down by 6 points.

The 76 seat RJ is unfortunately perfect for those routes and can squeeze 52-60% more revenue than a 50 seater on around 15% higher costs. Not to mention when you pull a Douglas jet out and stick an RJ in the Company hopes to get more revenue by restricting the supply of seat miles.

... and I'm still beating the drum for one list, jeesh, I'd love to just let it go, but it keeps chasing me around.... :rolleyes:
 
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