Looks like the doosh bags at Pardus Capital Management have been working the phones this week.
This one's a doozy.
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Source: CVG hub to stay
BY ALEXANDER COOLIDGE | [email protected]
Delta Air Lines is inching closer to making a deal to merge with either Northwest or United airlines, a source close to Delta said today. A deal with either would create the nation's biggest airline.
But few workers dealing with passengers would lose jobs in a merger - and no hubs, including Cincinnati/Northern Kentucky International, would close.
The source, who spoke to The Enquirer on condition that he not be named, said extensive talks have taken place with both Northwest and United and a decision is getting closer.
And the source added that pricing at CVG – rated the highest-priced airport in the nation to fly, according to government statistics – would probably stay the same if a merger is completed.
Meanwhile, local business leaders said they were encouraged by a letter they received today by the Cincinnati USA Regional Chamber and the Northern Kentucky Chamber of Commerce from Delta chief executive Richard Anderson, where he indicated a desire to keep local service.
"We intend to continue serving Cincinnati and Northern Kentucky with our hub," Anderson wrote. "You can be assured we will consider most faborably those transactions that provide growth opportunities for both Delta and the key communities we serve, including Cincinnati and Northern Kentucky."
Ellen van der Horst, president of the Cincinnati chamber, said the letter was a good sign. "We're encouraged that he recognized the hub is important to Delta and our community," she said.
Delta officials reiterated they are contemplating mergers in the industry, but declined to elaborate. “We will not be providing updates on this process or commenting on any rumors or speculation regarding mergers or acquisitions,” said Delta spokeswoman Susan Elliott today.
The source indicated pledging no mass layoffs would be a key selling point to federal antitrust regulators.
Such a plan would extend to call center operations, such as the one in downtown Cincinnati that employs about 700 workers. The source conceded that over time more reservations in the industry are migrating to the Internet and there will be less need for call center operations, but any potential closure would not be prompted by a merger.
The source challenged the conventional wisdom among industry analysts and experts that any deal would necessarily lead to dramatic cuts at Delta’s hub at CVG or any hub operations across the U.S.
The key justification for any Delta merger would be to create a global airline that would expand international service yet need to maintain an extensive U.S. network to feed overseas routes.
Pan Am and TWA were international powerhouses in their heydays but both airlines were ultimately doomed to fail because they had such inadequate domestic networks.
The source said Delta’s second-largest hub might actually add international service because they are among the most lucrative routes out of the Hebron airport. The airport could see expanded service to Europe and might see direct routes to Asia, for example.
While analysts have contended service cuts would be necessary in a merger, the source said Delta combined with one of the other airlines would likely reshuffle aircraft types and tweak frequencies on domestic routes, but that would not translate into major service or route cuts.
Indeed, any announcement of a deal will likely be accompanied with plans to purchase new aircraft, the source said.
Both Northwest and United have an extensive collection of 100-seat aircraft that could be redeployed in a combined domestic route map to maximize efficiency, putting them on the routes where they will fly the fullest.
In addition, Delta’s route map compliments either Northwest’s or United’s – as opposed to more overlap with US Airways’ network – which makes a potential combination with either the Minneapolis or Chicago airline appealing.
Both Northwest and United are strong in Asia, where Delta has been wanting to expand for years. But Delta has strong operations in Europe, as well as its biggest hub in Atlanta at the nation's busiest airport.
Last year, Delta fought off a hostile takeover attempt by US Airways. Ffighting a combination with the Tempe, Ariz.-based airline last year made sense because the merger didn’t add enough growth potential, Delta officials have said.
Finally, the source said the fate of Delta’s Erlanger-based subsidiary is a secondary consideration in the current talks. While Comair could grow as the combined airline assigns smaller aircraft to service domestic routes, decision-makers aren’t focusing on those considerations at this time.
Delta officials have acknowledged they may ultimately sell Comair, but have said they would keep it as a feeder airline in their domestic network regardless of whether they keep ownership. Delta officials have acknowledged they have delayed any decision on Comair amid merger discussions.
Delta’s board of directors is expected to meet over the next several days, another source told the Associated Press without elaborating on the topic of the meeting.
The AP's source, who was not authorized to talk as the negotiations entered a sensitive stage and asked not to be named, said one point of contention has been what Northwest Chief Executive Doug Steenland’s role would be at the combined company.
Atlanta-based Delta has said repeatedly that if it were to combine with another carrier it would want to be in control, which could mean its CEO, Richard Anderson, remaining in his post and Delta’s chairman, Daniel Carp, remaining in his.
Anderson, who was CEO of Eagan, Minn.-based Northwest Airlines Corp. when it began a drive to cut labor costs before he left in the fall of 2004, was replaced by Doug Steenland. But Steenland actually carried out the cuts, leading to a mechanic’s strike in 2005 and deep concessions forced on the other unions, which took effect last year while Northwest was in bankruptcy.
This one's a doozy.
====================================
Source: CVG hub to stay
BY ALEXANDER COOLIDGE | [email protected]
Delta Air Lines is inching closer to making a deal to merge with either Northwest or United airlines, a source close to Delta said today. A deal with either would create the nation's biggest airline.
But few workers dealing with passengers would lose jobs in a merger - and no hubs, including Cincinnati/Northern Kentucky International, would close.
The source, who spoke to The Enquirer on condition that he not be named, said extensive talks have taken place with both Northwest and United and a decision is getting closer.
And the source added that pricing at CVG – rated the highest-priced airport in the nation to fly, according to government statistics – would probably stay the same if a merger is completed.
Meanwhile, local business leaders said they were encouraged by a letter they received today by the Cincinnati USA Regional Chamber and the Northern Kentucky Chamber of Commerce from Delta chief executive Richard Anderson, where he indicated a desire to keep local service.
"We intend to continue serving Cincinnati and Northern Kentucky with our hub," Anderson wrote. "You can be assured we will consider most faborably those transactions that provide growth opportunities for both Delta and the key communities we serve, including Cincinnati and Northern Kentucky."
Ellen van der Horst, president of the Cincinnati chamber, said the letter was a good sign. "We're encouraged that he recognized the hub is important to Delta and our community," she said.
Delta officials reiterated they are contemplating mergers in the industry, but declined to elaborate. “We will not be providing updates on this process or commenting on any rumors or speculation regarding mergers or acquisitions,” said Delta spokeswoman Susan Elliott today.
The source indicated pledging no mass layoffs would be a key selling point to federal antitrust regulators.
Such a plan would extend to call center operations, such as the one in downtown Cincinnati that employs about 700 workers. The source conceded that over time more reservations in the industry are migrating to the Internet and there will be less need for call center operations, but any potential closure would not be prompted by a merger.
The source challenged the conventional wisdom among industry analysts and experts that any deal would necessarily lead to dramatic cuts at Delta’s hub at CVG or any hub operations across the U.S.
The key justification for any Delta merger would be to create a global airline that would expand international service yet need to maintain an extensive U.S. network to feed overseas routes.
Pan Am and TWA were international powerhouses in their heydays but both airlines were ultimately doomed to fail because they had such inadequate domestic networks.
The source said Delta’s second-largest hub might actually add international service because they are among the most lucrative routes out of the Hebron airport. The airport could see expanded service to Europe and might see direct routes to Asia, for example.
While analysts have contended service cuts would be necessary in a merger, the source said Delta combined with one of the other airlines would likely reshuffle aircraft types and tweak frequencies on domestic routes, but that would not translate into major service or route cuts.
Indeed, any announcement of a deal will likely be accompanied with plans to purchase new aircraft, the source said.
Both Northwest and United have an extensive collection of 100-seat aircraft that could be redeployed in a combined domestic route map to maximize efficiency, putting them on the routes where they will fly the fullest.
In addition, Delta’s route map compliments either Northwest’s or United’s – as opposed to more overlap with US Airways’ network – which makes a potential combination with either the Minneapolis or Chicago airline appealing.
Both Northwest and United are strong in Asia, where Delta has been wanting to expand for years. But Delta has strong operations in Europe, as well as its biggest hub in Atlanta at the nation's busiest airport.
Last year, Delta fought off a hostile takeover attempt by US Airways. Ffighting a combination with the Tempe, Ariz.-based airline last year made sense because the merger didn’t add enough growth potential, Delta officials have said.
Finally, the source said the fate of Delta’s Erlanger-based subsidiary is a secondary consideration in the current talks. While Comair could grow as the combined airline assigns smaller aircraft to service domestic routes, decision-makers aren’t focusing on those considerations at this time.
Delta officials have acknowledged they may ultimately sell Comair, but have said they would keep it as a feeder airline in their domestic network regardless of whether they keep ownership. Delta officials have acknowledged they have delayed any decision on Comair amid merger discussions.
Delta’s board of directors is expected to meet over the next several days, another source told the Associated Press without elaborating on the topic of the meeting.
The AP's source, who was not authorized to talk as the negotiations entered a sensitive stage and asked not to be named, said one point of contention has been what Northwest Chief Executive Doug Steenland’s role would be at the combined company.
Atlanta-based Delta has said repeatedly that if it were to combine with another carrier it would want to be in control, which could mean its CEO, Richard Anderson, remaining in his post and Delta’s chairman, Daniel Carp, remaining in his.
Anderson, who was CEO of Eagan, Minn.-based Northwest Airlines Corp. when it began a drive to cut labor costs before he left in the fall of 2004, was replaced by Doug Steenland. But Steenland actually carried out the cuts, leading to a mechanic’s strike in 2005 and deep concessions forced on the other unions, which took effect last year while Northwest was in bankruptcy.
