General Lee
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Here's another article for you....
LCC:US
US Airways Group Inc/NEW
US Airways' Chief Says Air Mergers Hinge on Delta Bid (Update5)
By Mary Schlangenstein
Jan. 23 (Bloomberg) -- US Airways Group Inc. Chief Executive Officer Doug Parker said consolidation among U.S. carriers won't happen soon if his $9.77 billion hostile takeover bid for Delta Air Lines Inc. falls through.
Parker is waiting to hear whether Delta's bankruptcy creditors will meet a Feb. 1 deadline to urge the airline to open its books to US Airways and trigger an antitrust review. Without those steps, US Airways will pull its bid, he said.
``It has implications for the whole industry,'' Parker, 45, said today in an interview. ``If they decide not to let us move forward with our proposal, industry consolidation is not going to happen until the next down cycle.''
Parker's plan would create the world's largest airline by passenger traffic, boosting pressure on rivals to add to their U.S. market share. Five of the seven largest U.S. airlines have been involved in recent merger talks.
An end to the Delta takeover battle ``very likely'' would stall further merger considerations for now, said Jon Ash, president of InterVistas-GA2, a Washington-based aviation consulting firm.
``There's a conventional wisdom that size is important and, consequently, people don't like to get left behind in terms of the size and scope of their network,'' Ash said in an interview. ``There is nothing magic about mergers and size, and consolidation isn't always necessarily a huge advantage to the shareholder or the consumer.''
Shares Decline
Shares of US Airways fell $3.76, or 6.6 percent, to $53.27 at 4:05 p.m. in New York Stock Exchange composite trading. It was the stock's largest decline since Aug. 11. Delta shares fell 20 cents, or 16 percent, to $1.06 in over-the-counter trading.
Parker said Tempe, Arizona-based US Airways' offer for Delta is ``absolutely, positively gone'' on Feb. 1 if Delta's nine-member creditors committee doesn't act by then. US Airways won't pursue its bid in bankruptcy court after expiration of Delta's exclusive right to file a reorganization plan, he said.
US Airways went public with its offer on Nov. 15, and Atlanta-based Delta's board rejected that bid on Dec. 19 in favor of its own plan to remain independent. Delta hasn't responded to Parker's sweetened proposal, made on Jan. 10.
Grinstein's View
Delta remains open to a possible merger after it leaves bankruptcy protection, CEO Gerald Grinstein said today in an employee newsletter.
``We are not opposed to all mergers, just the bad ones,'' said Grinstein, 74. Delta would consider a combination that is ``not anti-competitive, one that does not shrink or weaken Delta, reverse our progress or penalize our people, and one that provides long-term value for our many stakeholders.''
Delta isn't in merger talks with Northwest Airlines Corp., he said. The carrier recently hired an investment banker to obtain information from Northwest at the request of its creditors committee, he said. Northwest also expects to emerge from bankruptcy this year.
Lisa Beckerman, an attorney for the Delta's creditors committee, declined to comment.
Parker and Grinstein will testify tomorrow at a U.S. Senate committee hearing on airline mergers. Parker was meeting with some members of Congress today to answer questions on his plan and its implications for the industry.
Creditors
Delta and US Airways both are seeking the support of the creditors panel, which will help dictate terms of any plan for Delta to leave court supervision. Delta's plan to remain independent values the carrier at as much as $12 billion.
US Airways hasn't had negotiations or in-depth discussions with the committee since increasing its bid for Delta to $5 billion in cash and 89.5 million US Airways shares, Parker said. The original offer was $4 billion cash and 78.5 million shares.
The panel hasn't asked US Airways to raise its bid, Parker said. ``We haven't gotten any feedback from the committee, one way or the other,'' he said.
Parker said US Airways planned to contact the creditors today after a Wall Street Journal report that the merger offer was ``losing traction'' among committee members. The Journal cited unnamed people familiar with the matter.
Glenn Tilton, chief executive at UAL Corp. and its United Airlines, said today the need for mergers ``would be no less'' if US Airways' bid doesn't succeed. Tilton, 58, has advocated industry consolidation since February 2005, urging the U.S. government to lift limits on foreign investment and make it easier for carriers to combine.
United, the world's second-largest carrier behind AMR Corp.'s American Airlines, hired Goldman Sachs Group Inc. last year to explore possible transactions. United and Continental Airlines Inc. held merger talks following US Airways' initial bid for Delta.
AirTran Holdings Inc., a low-fare carrier based in Orlando, Florida, is pursuing a hostile takeover of Oak Creek, Wisconsin- based Midwest Air Group Inc.
To contact the reporter on this story: Mary Schlangenstein in Dallas at [email protected]
Have a good one.
Bye Bye--General Lee
LCC:US
US Airways Group Inc/NEW
US Airways' Chief Says Air Mergers Hinge on Delta Bid (Update5)
By Mary Schlangenstein
Jan. 23 (Bloomberg) -- US Airways Group Inc. Chief Executive Officer Doug Parker said consolidation among U.S. carriers won't happen soon if his $9.77 billion hostile takeover bid for Delta Air Lines Inc. falls through.
Parker is waiting to hear whether Delta's bankruptcy creditors will meet a Feb. 1 deadline to urge the airline to open its books to US Airways and trigger an antitrust review. Without those steps, US Airways will pull its bid, he said.
``It has implications for the whole industry,'' Parker, 45, said today in an interview. ``If they decide not to let us move forward with our proposal, industry consolidation is not going to happen until the next down cycle.''
Parker's plan would create the world's largest airline by passenger traffic, boosting pressure on rivals to add to their U.S. market share. Five of the seven largest U.S. airlines have been involved in recent merger talks.
An end to the Delta takeover battle ``very likely'' would stall further merger considerations for now, said Jon Ash, president of InterVistas-GA2, a Washington-based aviation consulting firm.
``There's a conventional wisdom that size is important and, consequently, people don't like to get left behind in terms of the size and scope of their network,'' Ash said in an interview. ``There is nothing magic about mergers and size, and consolidation isn't always necessarily a huge advantage to the shareholder or the consumer.''
Shares Decline
Shares of US Airways fell $3.76, or 6.6 percent, to $53.27 at 4:05 p.m. in New York Stock Exchange composite trading. It was the stock's largest decline since Aug. 11. Delta shares fell 20 cents, or 16 percent, to $1.06 in over-the-counter trading.
Parker said Tempe, Arizona-based US Airways' offer for Delta is ``absolutely, positively gone'' on Feb. 1 if Delta's nine-member creditors committee doesn't act by then. US Airways won't pursue its bid in bankruptcy court after expiration of Delta's exclusive right to file a reorganization plan, he said.
US Airways went public with its offer on Nov. 15, and Atlanta-based Delta's board rejected that bid on Dec. 19 in favor of its own plan to remain independent. Delta hasn't responded to Parker's sweetened proposal, made on Jan. 10.
Grinstein's View
Delta remains open to a possible merger after it leaves bankruptcy protection, CEO Gerald Grinstein said today in an employee newsletter.
``We are not opposed to all mergers, just the bad ones,'' said Grinstein, 74. Delta would consider a combination that is ``not anti-competitive, one that does not shrink or weaken Delta, reverse our progress or penalize our people, and one that provides long-term value for our many stakeholders.''
Delta isn't in merger talks with Northwest Airlines Corp., he said. The carrier recently hired an investment banker to obtain information from Northwest at the request of its creditors committee, he said. Northwest also expects to emerge from bankruptcy this year.
Lisa Beckerman, an attorney for the Delta's creditors committee, declined to comment.
Parker and Grinstein will testify tomorrow at a U.S. Senate committee hearing on airline mergers. Parker was meeting with some members of Congress today to answer questions on his plan and its implications for the industry.
Creditors
Delta and US Airways both are seeking the support of the creditors panel, which will help dictate terms of any plan for Delta to leave court supervision. Delta's plan to remain independent values the carrier at as much as $12 billion.
US Airways hasn't had negotiations or in-depth discussions with the committee since increasing its bid for Delta to $5 billion in cash and 89.5 million US Airways shares, Parker said. The original offer was $4 billion cash and 78.5 million shares.
The panel hasn't asked US Airways to raise its bid, Parker said. ``We haven't gotten any feedback from the committee, one way or the other,'' he said.
Parker said US Airways planned to contact the creditors today after a Wall Street Journal report that the merger offer was ``losing traction'' among committee members. The Journal cited unnamed people familiar with the matter.
Glenn Tilton, chief executive at UAL Corp. and its United Airlines, said today the need for mergers ``would be no less'' if US Airways' bid doesn't succeed. Tilton, 58, has advocated industry consolidation since February 2005, urging the U.S. government to lift limits on foreign investment and make it easier for carriers to combine.
United, the world's second-largest carrier behind AMR Corp.'s American Airlines, hired Goldman Sachs Group Inc. last year to explore possible transactions. United and Continental Airlines Inc. held merger talks following US Airways' initial bid for Delta.
AirTran Holdings Inc., a low-fare carrier based in Orlando, Florida, is pursuing a hostile takeover of Oak Creek, Wisconsin- based Midwest Air Group Inc.
To contact the reporter on this story: Mary Schlangenstein in Dallas at [email protected]
Have a good one.
Bye Bye--General Lee
