Moak says Merger may be close for DL

[IronCityBlue]

UAL, for the most part, is dead wood. Why would DAL want to compete more with SWA in Denver? We all know SWA is expanding there. So a mega merger like that has, as a primary considering factor, one SWA focus city? I don't believe that. Also, as GL stated, UAL and DAL have overlapping hubs - LAX, SLC/DEN, JFK/IAD. IAD/JFK are not overlapping hubs. IAD is the DC market which is a huge international market. That would make a very valueable addition to DAL or anyone. DAL/NWA have FAR more overlapping hubs. Almost complete redundancy except, drum roll please, Minny. UAL brings Chiacgo and DC, which are FAR more valueable. SLC/DEN would probably both be "right sized" in terms of flights and flight crew bases, but that's going to happen somewhere with ALL megers. DAL/UAL present probably the smallest ammount of job loss. NWA has MEM which would be toast completely, and they already don't need DTW and MSP as international powerhouses as it is, even is CVG gets downsized, which would happen anyway to ORD's benefit with a UAL deal. No way the Feds will allow a reduction of competition in those big markets. But the will allow such a reduction in a DAL/NWA merger? Consumers would lose big time with less competition and higher fares. That's the definiton of airline mergers. That's why I don't think all airlines will be allowed to do a mega merger. Two legacy airlines will be allowed to hool up with eachother, the rest will be told "so sorry, gotta keep those prices low, ya know!" Look how long it is taking the NWA-Midwest deal to happen - the hubs are too close. Again, MEM, DTW, CVG. All close to another hub.

Again, UAL is dead wood with no growth, Actually better for a merger. A/C can be ordered in a second from an airline the size of DAL/UAL. Boeing would we themselves rushing to fill a massive 787 order for them. increasing competition on all fronts, That's everyone no real strategic plan as opposed to NWA? and very low employee morale...as opposed to NWA? Why get involved with that? NWA and UAL both have strong Asian networks. DAL and NWA, on the other hand, have complementary route networks (DAL has Europe/South American/Africa and limited Asia while NWA has very strong Asia and limited Europe Ditto for UAL, which is a flea over the atlantic compared to DAL) and hubs (except CVG/MEM - one would probably have to go). MEM, CVG, DTW... Yeah, DAL + NWA makes a lot more sense from a strategic standpoint and the combination would be a powerhouse. UAL would bring a superior fleet, just as good a route compliment and an identical hub divesture scenario, and in addition would add O&D out of ORD and DC which is more valueable than Minny and DTW, especially international out of DC. That is one of UAL's crown jewels any legacy would kill to get. All they would need to figure out is the fleet mix (maybe negotiate a big deal to replace either the Airbus narrowbody or the Boeing narrowbody fleets) DAL/UAL wouldn't have to figure out nearly as much. Much better fleet right out of the box. I am sure the regionals would be upset because the combined carriers would not need 7 regional feeders (especially if a hub closed to reduce costs). That might actually cause regional consolidation in order to compete better for low-cost feed. Agreed, but NWA offers no particular advantage over UAL here, or vice versa.

All in all, a DAL/UAL powerhouse would be the most dominant airline in the country. Star/SkyTeam issues may doom it, although the combined airline would likely have no problem getting full support from either (just not both).

 

[3ds]

DAL + NWA.

DAL gets the routes, parks the -9s and buys -90s. Fences on all bases for x years and/or "some restrictions may apply" to future fleet/domicile changes

UPS gets the 747's and freight.

 

[General Lee]

Alot of assumptions here but for a guy in the bottom half of the seniority list, a DAL/NWA merger does have some advantages. In a perfect world DAL would buy 400 jets and hire 2000 pilots a year, making money hand over fist. The pilots would get 70% pay raises and add to already decent work rules. That isnt going to happen. In order to force the issue for pay raises Delta needs to keep making money. Creating a more complete route network and driving prices up a bit MAY be one way to do that. NWA also brings many more retirements in the short term to DAL pilots. With little route overlap and a healthy number of aircraft deliveries (DAL- 757/737/ and possible MD's. NWA's 787's) I dont see furloughs and in fact see the need for continued hiring depending on how many aircraft are shed (the DC9 is the wild card here). I doubt the government would approve a deal that sheds lots of jobs. If pilots who are not commuting can be base protected and still anticipate some sort of movement and good long term career expectations and a merger is going to happen this is the deal I would want.

We have seen recently that RJs (even 76 seaters) are not always the answer, even according to Ed Bastian who decided to park some during this Winter lull season instead of paying for the high gas. (see SLC article) He knows that RJs aren't the answer. There might be an answer to the old DC9s if we do merge with NWA, and it would be something right under our noses. What is that? How about those MD90s? We have looked at them, they are cheap ($9 million or so including the engines), and they are more efficient and can carry more pax than the older DC9s. We have the sims, we know how to maintain them, and the NWA guys are already flying DC9s. It could fill in for some of them, and there are supposedly 100 of them out there, waiting to be replaced by new A320s at those INTL airlines. You never know......They could be a cheap replacement for 10 years.


Bye Bye--General Lee

 

[General Lee]

DAL + NWA.

DAL gets the routes, parks the -9s and buys -90s. Fences on all bases for x years and/or "some restrictions may apply" to future fleet/domicile changes

UPS gets the 747's and freight.

Wow, I just read your post and you mentioned the
-90s too. I already posted mine, but you and I think alike. Scary. Maybe we are the "same person?" (according to Jmoney)

But, UPS is currently parking their older 747-200s and -100s. I don't think NWA would give up their 744s, but maybe. I can see them flying those from NRT to all of the big hubs--like ATL, MSP, DTW, JFK, and LAX.



Bye Bye--General Lee

 

[3ds]

Wow, I just read your post and you mentioned the
-90s too. I already posted mine, but you and I think alike. Scary. Maybe we are the "same person?" (according to Jmoney)


Bye Bye--General Lee

Ha! Is that a compliment?

UPS needs lift bigtime. They might spring for a 747 deal if the price is right. The current NWA pilots might not even be disappointed to get the 'opportunity' to wear brown.

 

[General Lee]

All in all, a DAL/UAL powerhouse would be the most dominant airline in the country. Star/SkyTeam issues may doom it, although the combined airline would likely have no problem getting full support from either (just not both).

Only you, Gordon Bethune (paid by Pardus Capital) and Pardus Capital believe what you are saying. United and Delta have way too much overlap. As far as NWA and DL overlap---MEM is a very small hub, with EAS type flying via Saabs at Mesaba. CVG and DTW are close, but CVG doesn't have the same amount of mainline traffic as DTW does. AA has a STL hub between ORD and DFW though, and it can be used for pax flow problems if one of the larger hubs has WX problems. CVG would be a question mark though. I think we have less than 50 mainline flights originating at CVG a day now---and Comair would be affected a lot more (today they announced 14 more CRJs being parked).

You don't think IAD and JFK being next to each other means one or a majority of one would go? How about DEN and SLC? How about CVG and ORD? How about both DL and UA having redundant flights at LAX to HNL, KOA, OGG, LIH, BOS, JFK, MCO, LAS, SLC, DEN, SEA, PDX, YVR, BOI, PHX, SFO, GUA, etc?

Also, we don't want the extra debt that United brings along. They did NOT do a very good job in BK, while both NWA and DL transformed themselves for the better. And you mention SkyTeam. Could there be a coincidence that Air France owns KLM, the partner of NWA in AMS, while AF is our partner in CDG? Do you think those guys talk at all? I would be very surprised if it were United we were talking about with Delta.

Bye Bye--General Lee

 

[3ds]

But, UPS is currently parking their older 747-200s and -100s. I don't think NWA would give up their 744s, but maybe. I can see them flying those from NRT to all of the big hubs--like ATL, MSP, DTW, JFK, and LAX.



Bye Bye--General Lee

Maybe they'd trade some future 777 frt models for current 744's today.

 

[grinder]

NWA + DAL would be approved if NWA divests share of CAL. That would in turn present other opportunities for consolidation. Probably down to 3 legacy type "majors" by next year.

 

[Furloughed80]

The "golden share" is automatically nullified if NWA merges with anyone.

 

[taildragger48]

If any of you think a merger, any merger, is good for the employees, I have bridge I'd like to show you in NY!

These mergers are driven by Wall Street bankers, Financiers, Accountants and Attorneys. The actual "benefits" of a merger such as improved route structures, synergies, and what have you, are window dressing the aforementioned parties use to sell the merger to politicians, employees and the travelling public.

The reality is that many employees can lose their jobs due to the synergies, many communities can end up losing air service and the public can look forward to more expensive travel.

Debate which combination is better all you like. In the end it doesn't mean a rats *ss. The only thing that will matter is how much money it will make for the deal makers and their hangers-on. And that money will likely come from 'savings' from employees gone and airplanes parked!

Just look at how well the AWA/USAirways merger has gone from the employee perspective!

 

[johnsonrod]

All in all, a DAL/UAL powerhouse would be the most dominant airline in the country. Star/SkyTeam issues may doom it, although the combined airline would likely have no problem getting full support from either (just not both).

We can agree to disagree. I realize SWA was not focusing on just Denver - I mentioned SWA because it is starting to further erode UAL's market share in one of its key hubs and it will continue to do so (over the long run). That can't be good news. UAL and DAL have completely overlapping JFK and LAX hubs and both would likely need to be pared down (for cost reduction/efficiency sake) in a merger. Plus, we all know the new DAL CEO is former NWA and that familiarity with the operation (and respect from the NWA side) could be viewed as an asset in a merger.

UAL is just a tired dog at this point and why would DAL want to inherit those problems (eroding market share, zero growth, complete lack of a strategic plan, very low employee morale, etc.) when NWA offers the same Asian access? If no merger, the only other potentially viable option beyond a merger involving UAL would be an asset sale - UAL sells DAL its Asian routes (potentially in a liquidation). UAL's CEO seems determined to run the airline into the ground to force a liquidation and potential merger situation (like AWA/USAirways)...

 

[zonker]

If any of you think a merger, any merger, is good for the employees, I have bridge I'd like to show you in NY!

These mergers are driven by Wall Street bankers, Financiers, Accountants and Attorneys. The actual "benefits" of a merger such as improved route structures, synergies, and what have you, are window dressing the aforementioned parties use to sell the merger to politicians, employees and the travelling public.

The reality is that many employees can lose their jobs due to the synergies, many communities can end up losing air service and the public can look forward to more expensive travel.

Debate which combination is better all you like. In the end it doesn't mean a rats *ss. The only thing that will matter is how much money it will make for the deal makers and their hangers-on. And that money will likely come from 'savings' from employees gone and airplanes parked!

Just look at how well the AWA/USAirways merger has gone from the employee perspective!

Exactly right.

 

[lowecur]

If any of you think a merger, any merger, is good for the employees, I have bridge I'd like to show you in NY! Where, and how much?

These mergers are driven by Wall Street bankers, Financiers, Accountants and Attorneys. True, but they are also driven by pilot groups that see the possibilities of a return to previous pay scales and ownership in a company that has unlimited potential of being the most profitable airline this side of the Atlantic/Pacific. I doubt all these things will ever be possible going it solo. The actual "benefits" of a merger such as improved route structures, synergies, and what have you, are window dressing the aforementioned parties use to sell the merger to politicians, employees and the travelling public.

The reality is that many employees can lose their jobs due to the synergies, many communities can end up losing air service and the public can look forward to more expensive travel. It still boils down to it's parts being less important than the whole.

Debate which combination is better all you like. In the end it doesn't mean a rats *ss. The only thing that will matter is how much money it will make for the deal makers and their hangers-on. And that money will likely come from 'savings' from employees gone and airplanes parked!

Just look at how well the AWA/USAirways merger has gone from the employee perspective!

I think the AWA/USAirways merger went very well for US Airways employees.....they have jobs. The problems with integration amongst the pilots were many:

• Big difference in average age
• US had a huge number of furloughs
• AWA had no widebody pilots

Lack of these problems between NWA/DAL, should make integration a no brainer.

imp:​

 

[michael707767]

Only you, Gordon Bethune (paid by Pardus Capital) and Pardus Capital believe what you are saying. United and Delta have way too much overlap.

Gen Lee is right here. The only people who have said a Delta UAL merger makes sense are those who stand to make money off the transaction, like Pardus.

 

[On Your Six]

UAL is like the ugly prom date. Nobody wants to dance with her...

I agree that Delta and Northwest combo makes a lot more sense. Why settle for United with all of its "baggage" when you could still get Asia access through Northwest? It's all moot until the DOJ gives the final OK (and that ain't a sure thing at all)...