TheStreet.com

[Hpilot]

#2 dumbest thing this week

Yes, the only thing dumber than buying a worthless hulk(just joking, Parkers no dummy) is turning down $8 billion for it.

"2. Delta's Flight PlanDelta (DALRQ - commentary - Cramer's Take) took its latest flight of fancy this week.
US Airways (LCC - commentary - Cramer's Take - Rating) bid $8 billion in cash and stock for the Atlanta-based carrier, which has been operating under Chapter 11 bankruptcy protection since September 2005.
Tempe, Ariz.-based US Airways has been pursuing Delta privately since this summer. Having been rebuffed, it took its proposal public this week.
US Airways offers up a bold vision of competing both with the so-called legacy carriers, such as United and American, and with cut-rate operators like Southwest (LUV - commentary - Cramer's Take - Rating). It says its offer gives Delta's unsecured creditors a premium price and its workers much-needed job security.
"The combined company will be a more effective and profitable competitor in the current fragmented marketplace," said CEO Doug Parker, "with the ability to better meet the continuing evolution of the airline industry."
Making a more effective competitor out of these two shouldn't be hard, considering that they've combined to file for bankruptcy three times in four years. But Delta CEO Gerald Grinstein is having none of it.
Grinstein has slashed more than $2 billion from Delta's costs in recent years. He has overseen thousands of firings, put through steep pay cuts and ended the pilots' pension plans. He has warned that a rise in oil prices could lead to even more pain.
Still, despite all the turbulence, he promises the airline will emerge next spring under its own power.
"Our plan is working," he said, "and we are proud of the progress Delta people are making to achieve this objective."
The few people who are left, anyway.


Dumb-o-Meter score: 90. Grinstein surely blanches at US Airways' claim that its "current model does not assume furloughs of employees in the mainline operating groups."

 

[On Your Six]

#2 dumbest thing this week

Yes, the only thing dumber than buying a worthless hulk(just joking, Parkers no dummy) is turning down $8 billion for it.

"2. Delta's Flight PlanDelta (DALRQ - commentary - Cramer's Take) took its latest flight of fancy this week.
US Airways (LCC - commentary - Cramer's Take - Rating) bid $8 billion in cash and stock for the Atlanta-based carrier, which has been operating under Chapter 11 bankruptcy protection since September 2005.
Tempe, Ariz.-based US Airways has been pursuing Delta privately since this summer. Having been rebuffed, it took its proposal public this week.
US Airways offers up a bold vision of competing both with the so-called legacy carriers, such as United and American, and with cut-rate operators like Southwest (LUV - commentary - Cramer's Take - Rating). It says its offer gives Delta's unsecured creditors a premium price and its workers much-needed job security.
"The combined company will be a more effective and profitable competitor in the current fragmented marketplace," said CEO Doug Parker, "with the ability to better meet the continuing evolution of the airline industry."
Making a more effective competitor out of these two shouldn't be hard, considering that they've combined to file for bankruptcy three times in four years. But Delta CEO Gerald Grinstein is having none of it.
Grinstein has slashed more than $2 billion from Delta's costs in recent years. He has overseen thousands of firings, put through steep pay cuts and ended the pilots' pension plans. He has warned that a rise in oil prices could lead to even more pain.
Still, despite all the turbulence, he promises the airline will emerge next spring under its own power.
"Our plan is working," he said, "and we are proud of the progress Delta people are making to achieve this objective."
The few people who are left, anyway.


Dumb-o-Meter score: 90. Grinstein surely blanches at US Airways' claim that its "current model does not assume furloughs of employees in the mainline operating groups."

These guys know nothing about the airline industry and it shows. They are all dumba$$es. They only look at it from the short-term money perspective - not the long-term potential or suitability of other strategic partners. Does this dumba$$ know anything about the complete route overlap that will never, ever be approved by the DOJ? Does this dumba$$ know anything about the complete lack of fleet synergy between Delta and USAirways? Is this dumba$$ aware of hostile labor relations between the USAirways and America West camps right now? Does he know about the dismal success rate of hostile takeovers in service businesses?

If you look at this exclusively in money terms it sounds great. Then, when you look at the reality of the situation and note that a UAL merger would make much more strategic sense if a merger were to happen (add Asian routes - route networks are far more complementary), it really starts to lose its luster...

These "generalist" analysts are serious tools who like to hear themselves talk...

 

[Ty Webb]

Well, the guy that wrote that piece is probably making more than all the 11 people currently reading this string combined . . . . and home every night, weekends, holidays, and no one is stealing his pension or rationing his water bottles. . . . . . .

You may think you'd look better with a big ol' silver-colored UNITED bugsplat on the front of your hat, but it's "tools" like the guy that wrote this piece who decide that, not us.


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