Now I get it! It's a NWA/DAL Merger!

[jetfo]

I know everyone has been speculating that a NWA/DAL merger might happen, but now it makes a lot more sense.

With NWA passing their TA and with DAL about to pass theirs, and with both contracts being very similar after the TA's, the pieces all fit together.

The combined NWA/DAL will close CVG in favor of DTW, NWA will close MEM. DAL will sell off Comair and NWA will ditch Mesaba or use it strictly for turboprop lift, as US uses Piedmont.

Both TA's permit 76 seat aircraft to be flown by subsidiaries or affiliates and with the combined NWA/DAL they can double that fleet and bring the lift online quickly.

I guess we will know shortly after the TA at DAL has passed. They will likely announce the merger then, if it is going to happen.

 

[Captjiggles]

Talk about "the blind leading the blind".

 

[81Horse]

I predict this merger will fall apart over the double-breasted uniform issue.

And the white socks.

 

[NuGuy]

Actually, the fiancial funny papers say a CAL-NWA merger is more likely due to financial dealings having to do with the 1998 and 2000 stock transactions. NWA still owns a considerable position in CAL, including the golden veto share.

Besides, it's a better fit. CAL with NY and HOU, Europe, some SoAM and some Pacific. NWA with the Midwest, anti-trust with KLM and a BIG chunk of the Pacfic. You'd pretty much have the whole world covered, and BIG domestic coverage with DTW,MSP,IAH and EWR. If you could throw Alaska into the mix, it would be something really worthwide.

All DAL brings to the table is Europe and LCC infested ATL. Oh, and uniforms left over from Mississippi river steamers.

But this is all ranting suitable to an Airliners.net strokefest. In reality, either nothing will happen, or the most unlikely combination that no one ever saw comming will be the one that actually takes place.

Nu

 

[81Horse]

That would solve the uniform problem -- except for the socks.

 

[Occam's Razor]

Actually, the fiancial funny papers say a CAL-NWA merger is more likely due to financial dealings having to do with the 1998 and 2000 stock transactions. NWA still owns a considerable position in CAL, including the golden veto share.

NWA owns no Common shares of CAL. They don't own the Preferred shares, either. Those were sold back to CAL in September, 1998. As a condition of the transaction, CAL signed a 25 year agreement that gives NWA veto rights over 6 specific actions by the CAL BOD. Among them is the the right to merge with another airline.

The DAL MEC is interested in a merger, and they have assessed their pilots to retain merger counsel. They believe a merger is probable. They also believe NWA is the best fit. If DAL was interested in CAL, they'd have to pay NWA a bunch of $$ to buy approval for the deal.

But this is all ranting suitable to an Airliners.net strokefest. In reality, either nothing will happen, or the most unlikely combination that no one ever saw comming will be the one that actually takes place.

You might be right! The most intriguing aspect of DAL/NWA merger talk is the relative ease of doing a "two-for-one" deal to fund the reorganization of both. It would take about $6.5-billion to do both together (due to common creditors who could be appeased with shares in the new, larger airline), against about $9-billion to reorganize both individually. Since UAL's exit was oversubscribed by about $3.8-billion, I would think the money is out there.

There doesn't seem to be a shortage of capital out there for this sort of thing right now. If the government is cool with it...it could happen.

 

[B727FA]

The CO/DL merger makes more sense...fleet far more common, HOU stays strong for SoAm, SLC covers the west, CLE closes and CVG bumps back up. EWR stays strong, and JFK hums along. ATL stays the "mother ship." Or not...

 

[Tomct]

I have to agree with 727. The fleet commonality between DL and NW is not even close. They only share one type 757. NW has devoted themselves the scarebus and Big Delta is ALL BOEING!! Continental makes a lot more sense. Who knows, only time will tell!!

 

[Jonny Sacko]

I think CAL/UAL is the latest merger news at both. Don't overlap, and fleets match somewhat. Selling off the Airbus' would put both Boeing's into action (except engines). Who knows.

 

[GogglesPisano]

So anyone who merges with CAL would have to pay off NWA? NWA could theoretically nix any potential suitors?

 

[Occam's Razor]

So anyone who merges with CAL would have to pay off NWA? NWA could theoretically nix any potential suitors?

Affirmative. Until September, 2023.

 

[acbarney]

As I understand it, the Veto only applies to somone buying/acquiring CAL, not CAL buying/acquiring someone.

 

[Tomct]

CAL is certainly sitting better than any other Major out there, they have cash and new aircraft coming along with growing routes. Only time will tell!

 

[800Dog]

CAL is certainly sitting better than any other Major out there, they have cash and new aircraft coming along with growing routes. Only time will tell!

How much cash do they have?

 

[DTW320]

How much cash do they have?

2.01 Billion at the end of the 1st quarter. Roughly half of what AMR has.

 

[General Lee]

I don't see a CAL/DAL merger. Ever heard of overlapping hubs? CAL has EWR, and we have JFK and the Delta Shuttle at LGA. The Gov't would never go for it, unless one of us gave up something, and I doubt that would happen. The last merger was USAir and AWA, and there were no overlapping hubs. That was another reason UAL and USAir didn't merge, and had to come up with "DC Air"--since USAir had a large DCA presence, and UAL a large presence and IAD. NW, on the other hand, has no overlap with DL. That is the one I see coming down the pike, and probably after an emergence from BK for both of us, or maybe at the end so they could come out of BK together. (holding hands...ah....)


Bye Bye--General Lee

 

[Noserider76]

I don't see a CAL/DAL merger. Ever heard of overlapping hubs? CAL has EWR, and we have JFK and the Delta Shuttle at LGA. The Gov't would never go for it, unless one of us gave up something, and I doubt that would happen. The last merger was USAir and AWA, and there were no overlapping hubs. That was another reason UAL and USAir didn't merge, and had to come up with "DC Air"--since USAir had a large DCA presence, and UAL a large presence and IAD. NW, on the other hand, has no overlap with DL. That is the one I see coming down the pike, and probably after an emergence from BK for both of us, or maybe at the end so they could come out of BK together. (holding hands...ah....)


Bye Bye--General Lee

I really hope there is no merger. It would take years for the mess be sorted out and it would be terrible for the employees. Especially the junior ones. Delta has almost nobody left over 53 years old and Northwest is an older crowd. Shouldn't make any difference integration wise but could cause problems.

I think both companies are much better off trying to sort through their problems alone. The only winners in a merger would be the financiers and senior management. Bigger is not necessarily better.

 

[accinelli]

If the merger has to happen it will -- just like the TAs and the ratification.

 

[Occam's Razor]

As I understand it, the Veto only applies to somone buying/acquiring CAL, not CAL buying/acquiring someone.

Wrong. The Agreement includes "...any other combination with a certificated air carrier..." as one of the required consent conditions.

No loophole.

 

[xjhawk]

one giant merger with all the companies....ha.....

 

[Tomct]

Nose...you said everything that would make them merge DAL/NWA. Only good for the execs.humph! Wonder why? Would possibly be a bigger mess than when DAL merged with WAL. I sure miss Western! "The Only Way To Fly"

 

[81Horse]

Here you go, Tomct: http://www.airtimes.com/cgat/usc/western/detail/wallybird.jpg

 

[accinelli]

yeah. lets merge all the majors. That way we'll have one big outfit with p$ss poor service, ugly flight attendants, militant mechanics and ramp monkeys.

 

[General Lee]

I really hope there is no merger. It would take years for the mess be sorted out and it would be terrible for the employees. Especially the junior ones. Delta has almost nobody left over 53 years old and Northwest is an older crowd. Shouldn't make any difference integration wise but could cause problems.

I think both companies are much better off trying to sort through their problems alone. The only winners in a merger would be the financiers and senior management. Bigger is not necessarily better.

There is NO way there would be a DOH merger with DL/NW, since 2300 senior captains at DL left all at once, when hardly any left at NW. It most likely would be a percentage merger--if you are in the top 40% of the company, you would fit in at the 40% spot in the newly merged company. That way, there would be no overwhelming winner. An aquisition (like AWA/USAir) would be different, but NW and DL both went to BK, and nobody could afford to buy the other. That would mean a merger, and merger rules are different than aquisition rules. Just ask the SkyWest and ASA guys that---even though SkyWest doesn't have ALPA and can do whatever they want.


Bye Bye--General Lee