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U.S. Airways bids 8 Billion to buy Delta

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8 Billion spondoolicks to merge with Delta- and we're facing record cancellations at my POSline because the equipment is garbage and the money won't get spent to fix it?

Hey! Look at this 5 gallon bucket! Watch me put 15 gallons of feces in it! Hooray!
 
Hey QUACK. Did you know that your AVATAR is really a MAN? I mean, what kind of girl has size 11 feet. I've heard that she is the "Hilton Secret!!":laugh:
 
michael707767 said:
If USAir has 3-4 Rjs in market A and Delta also has 3-4 Rjs, all the sudden it might make more sense to have 3-4 mainline aircraft.
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Mainline aircraft replacing regional aircraft on the same route? Can't you see?

This is good for all of us.
 
Beantown said:
I don't see how this gets past the Gov. They would have to shrink the combind airline by 20 or 30%. They compete on vertually every route in the east. Many in the West and Midwest. They would have to close the CLT hub, probably the Salt Lake City Hub.

This would be bad for all the employees but I won't matter because it won't happen. -Bean
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I don't see hub closings...PHX and LAS don't have the capacity to handle the SLC traffic on top of what they already have...
 
rickair7777 said:
I don't see hub closings...PHX and LAS don't have the capacity to handle the SLC traffic on top of what they already have...
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Right, that's what STL thought about DFW and ORD when American took over TWA. But, really, LAS is more of a mainline destination than a regional transfer hub like SLC. We'll see what happens.
Hopefully, as stated before, consolidation will lead to more mainline and less regional flights.
 
If you fly on the Delta side you better horde up the peanuts. US Air is peanut free.
 
On the delta side, we changed not too long ago from the honey-peanut crackers to the sour cream-chive ones...I don't like those, I am ready for a change.
 
from www.fark.com:

US Airways makes $8 billion bid for Delta, looks to create giant airline so riddled with debt and bad ideas that they will actually fly underground.
 
Fallingbrick said:
No one! Besides, I wasn't aware that there were ever any winners on the regional side. Hold on everyone! :nuts:
Click to expand...

Not good for Comair:


US Airways-Delta Deal Would Intensify Regionals' Rivalry

DOW JONES NEWSWIRES
November 15, 2006 12:58 p.m.
By Mary Ellen Lloyd
Of DOW JONES NEWSWIRES

The growth outlook for regional airlines grew cloudier Wednesday with US Airways Group Inc.'s (LCC) proposed $8 billion purchase of Delta Air Lines Inc. (DALRQ).

Airline industry experts expect the overlapping networks served by the two major airlines and their regional carriers would only mean more competition for the likes of Republic Airways Holdings Inc. (RJET), SkyWest Inc. (SKYW) and Mesa Air Group Inc. (MESA), should the deal be completed.

As a result, shares of regional carriers fell, with SkyWest down 8% recently, Republic Airways off 5% and Mesa trading 2% lower.

"For regional partners, it's just more of the same, in that their relationships with major partners are entirely up for grabs," said Michael Abbey, managing partner of consulting firm Velocity Group.

US Airways said that, if the deal takes place, it would reduce service to "marginal markets" and would discontinue "unprofitable flying," but it wouldn't have to exit any U.S. markets to achieve the $1.65 billion in annual cost savings targeted in the proposed purchase.

But the "new Delta" would cut overall route capacity by 10%, including the divestiture of US Airways' East Coast shuttle business. US Airways Chief Executive Doug Parker said it was too soon to talk about specifics, but that both US Airways' mainline and regional businesses would be cut.

Mesa and Republic work with both airlines, which have "fairly significant network overlap east of the Mississippi," Abbey said.

Atlanta, Charlotte, Boston, Washington, and New York will be key hub regions of focus for antitrust regulators and others, because those are served by both airlines, Abbey said.

Calyon Securities analyst Ray Neidl is also watching what happens with Delta's hub in Salt Lake City, given that US Airways has hubs in Phoenix and Las Vegas.

"My opinion is that some of the regional hubs, in order to save costs and reduce capacity, would go away, and that would affect operations for the regional carriers," Neidl said.

Raymond James downgraded shares of SkyWest and Republic Airways to market perform from strong buy, citing the uncertainties and recent share gains for both stocks.

"The bottom line regarding all of this, in our view, is that uncertainty for the regional airline group as a whole has been increased," analyst Buck Horne said in a note to clients.

SkyWest's existing contract with Delta has been reaffirmed in bankruptcy court, which means US Airways would have to honor the terms of the 15-year agreement, Horne said.

SkyWest's vice president of finance, Michael Kraupp, said in an interview that it's too early to comment on the deal's potential impact on business overall but he, too, noted the approved contract, which covers regional flying in the Atlanta and Salt Lake City markets.

"We are one of the only regional partners of Delta that has a contract affirmed in bankruptcy, and in the event of a merger, we would anticipate that our contract would have to be honored," he said, adding that "US Airways and America West are not huge in either of those markets, particularly when it comes to regional flying."

Contracts for Republic and Mesa with Delta haven't yet been affirmed in bankruptcy court, and creditors may not approve any efforts to enter new long-term deals until the US Airways offer is resolved, Horne said. Both Mesa and Republic are currently rebidding contracts for existing flights with Delta.

Representatives for the other regional carriers couldn't be reached immediately for comment.

In addition, US Airways would likely cut the number of 50-seat regional jets in the combined fleet. Delta has sent out a request for proposals for 50 76-seat planes, but that may not be pursued by US Airways management, putting the added near-term growth potential for SkyWest, Republic and Mesa in question, Horne said.

On the other hand, the deal could open up growth opportunities for the regionals if it paves the way for US Airways to attack costs at Delta's regional carrier, ComAir, more aggressively than Delta has, Horne said.

"ComAir's business with Delta (representing $1 billion in annual revenue) could be substantially curtailed and possibly shut down, which would create substantial growth opportunities for other regional airlines," he wrote.

Still, investors weren't taking any chances Wednesday.

Shares of Republic Airways were recently trading down $1.03 at $17.21. SkyWest was down $2.27 at $25.78, and Mesa was down 18 cents at $9.02.

-By Mary Ellen Lloyd, Dow Jones Newswires, 704-371-4033; [email protected]
 
Bluestreak said:
SkyWest's existing contract with Delta has been reaffirmed in bankruptcy court, which means US Airways would have to honor the terms of the 15-year agreement, Horne said.

SkyWest's vice president of finance, Michael Kraupp, said in an interview that it's too early to comment on the deal's potential impact on business overall but he, too, noted the approved contract, which covers regional flying in the Atlanta and Salt Lake City markets.

"We are one of the only regional partners of Delta that has a contract affirmed in bankruptcy, and in the event of a merger, we would anticipate that our contract would have to be honored," he said, adding that "US Airways and America West are not huge in either of those markets, particularly when it comes to regional flying."

Contracts for Republic and Mesa with Delta haven't yet been affirmed in bankruptcy court
Click to expand...

skywest will be hiring for ALONG time......
 
On the other hand, the deal could open up growth opportunities for the regionals if it paves the way for US Airways to attack costs at Delta's regional carrier, ComAir, more aggressively than Delta has, Horne said.
Click to expand...

What are they gonna do, start killing people now? It doesn't get much more aggressive than throwing out your contract in BK and imposing whatever you like.
 
Terrain Terrain said:
skywest will be hiring for ALONG time......
Click to expand...

Interesting how all the media articles relate to Delta's regional carriers and no attention is paid to Airways' carriers. Even though the combined company would retain the Delta name, this would be basically a hostile takeover of Delta by US Airways.

I believe Air Wisconsin's contract with US Airways was also "affirmed in bankruptcy court"...not to say anything about RAH's Airways contract (which I also believe was part of the restructuring agreement) or Airway's WOs Piedmont & PSA.

If this does actually happen, It'll be a knifefight at mainline, but a total bloodbath at the regionals.
 
Seats still need to be filled at mainline with feed from regionals. All the seats are full now, doubtful they can cut back much more than they have.

SkyWest will hire until ASA's contract is completed. SkyWest will stop hiring and start at ASA while slashing pay and benefits at SkyWest to match ASA's. All the while stating that if piplots vote in a union, ASA will take all your flying.

Mark my words. The Lord of The Ramp has spoken (or typed).
 
BoilerUP said:
Interesting how all the media articles relate to Delta's regional carriers and no attention is paid to Airways' carriers. Even though the combined company would retain the Delta name, this would be basically a hostile takeover of Delta by US Airways.

I believe Air Wisconsin's contract with US Airways was also "affirmed in bankruptcy court"...not to say anything about RAH's Airways contract (which I also believe was part of the restructuring agreement) or Airway's WOs Piedmont & PSA.

If this does actually happen, It'll be a knifefight at mainline, but a total bloodbath at the regionals.
Click to expand...

And AWAC owns a large stake in Us Air, does it not? That will be interesting.

It would indeed be a bloodbath. Why fly two RJs from ATL and CLT when you could consolidate those pax into one 737? I see the RJs bring cut in half. Not that I believe this merger will actually happen.
 
John Pennekamp said:
And AWAC owns a large stake in Us Air, does it not? That will be interesting.

It would indeed be a bloodbath. Why fly two RJs from ATL and CLT when you could consolidate those pax into one 737? I see the RJs bring cut in half. Not that I believe this merger will actually happen.
Click to expand...

Like others have said on these posts (like Johnsonrod, FDJ2 and others), I believe this merger won't happen for a few reasons:

1. Fleet complexity - DL and US only share the 757/767 and yet they use different engines. Way too many fleet types for any synergies

2. Anti-trust - I agree that the route networks completely overlap in the US. Taking capacity and customer choice out of the market will not help the customer. USAirways brings nothing to the table in terms of new international routes - UAL or NWA would at least provide Asia.

3. Big creditors have an active interest in keeping Delta around - Boeing is a big creditor and it does not want to lose another customer in a merger and then have it order Airbus airplanes - US is Airbus heavy...

4. USAirways and AWA have not integrated well and both pilot groups HATE each other - adding Delta to the mix would be a disaster.

Who knows what will happen in the end - anything can happen. But Delta is getting stronger and I think they will convince the judge and creditors that consumers and creditors will benefit long-term from being independent and growing...
 
????

TNPILOT said:
Ding ding. Also a republican admin. will be more unlikely to interfere. While the UAL/USAir merger was blocked by the justice department in July '01 when Bush was in office, the decision was largely made by Clinton's people. At least that is the way I understand. Please correct me if I'm wrong.
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Not picking on you specifically TNPILOT just using your post to ask a generic question. Why are so many people hanging their hats on the DOJ rejecting this deal based on UA/UsAirways? That merger was announced before the election of 2000, and there was no way justice was going to tackle it before the new admin was decided. You had powerful people supporting the merger, and others against it and spewing out bills left right on everything from arbitration for negotiations to crazy schemes to limit the number of gates/flights a carrier could have at a hub-Hollings(sp?)from SC I think had that last one. Basically the DOJ did the 90 day stonewall thing until Bush officially took office in '01, then they started to look at it earnest. They did one more 90 day stonewall in May I believe, basically I think to wrangle the final concessions needed out of UA: DcAir operated by AA, gate/slot concessions for city pairings identified as overlapping, etc. They were likely to approve the deal in Aug '01 which is when the deal terms were up. During that time, UA got cold feet about overpaying at $60 a share for what they were getting from Airways' in a detiorating industry climate. Fares were falling, Airways wasn't as strong in their markets as UA thought, they were taking too many Airways planes and employees with the deal, agreed to a big pay protection package to keep the UA pilots quiet, and so forth. Goodwin pulled the plug on the deal in July ahead of the DOJ's approval, and tried to blame it on DOJ. He did that because UA would owe Airways alot less if DOJ rejected the deal vs. UA pulling out. It blew up in Fatwin's face after DOJ took the unusual step of publicly denying that they had stopped the merger, and a whole bunch of senators and constituencies started woofing that they were going to somehow force UA back into the deal. Of course that failed, but the damage was done, and I bet Goodwin/UA would have loved to have had that political horsepower back two months later when 9/11 hit.

Long story, but the point is I wouldn't hang my hat on DOJ tossing this bad boy.
 
This takeover is a double edged sword for many people (management, employees, DOJ,), but for most of all mr. john and jane doe taxpayer. No one can argue that this won't lead to reduced capacity, most likely higher fares on numerous routes, and a slashed work force. However, industry analysts have been saying all along that something like this needs to happen in order for this so called industry to stay alive. Although the airlines may be making a small profit margin, what happens when another attack happens or fuel prices spike to absurd levels again. Will the government be there to bail out these airlines with citizen's tax dollars? After all the commotion over the past 5 years, you'd think that the gov't would be in favor of this deal just to "stablize" an absolutely brutal business of cut throat marketing and ticket sales. The fact of the matter is that if this deal makes it to the DOJ, don't look to them to put the brakes on anything.
 
It's the Adam's-apple....

Tomct said:
Hey QUACK. Did you know that your AVATAR is really a MAN? I mean, what kind of girl has size 11 feet. I've heard that she is the "Hilton Secret!!":laugh:
Click to expand...

...that's what really scares me!
 
I think this merger is brilliant. The overlap is what sells the deal. Think about how many cities have both Delta Connection and US Air Express operations. Cut your ground ops by 50% and add a 70 to 90 seat airplane instead of two 50 seat RJ’s and wha la your lining your pockets with cash.

Look at our pay rates, I took my year pay scale and divided pay by the number of seats on the airplane.
135 = 1.69
140 = 1.41
145 = 1.40
170 = 1.05 with 70 seats
170 = 0.96 with 76 seats
175 = 0.94

If we flew the 175 at the same rate as 145 per seat captain cost, seven year captain pay would be $120.06 per hour.

This is before the fact that they will give us the big “If we don’t lower our cost then we’ll lose flying” speech.

You put bigger planes on the shuttle routes, fire half the ground people at dual out stations, combine ops in BOS, make CLT, SLC and CVG focus cities, Fifty seat RJ use is cut by 40%, All the MD-80’s and 73 200-500’s go to the desert, Boing gets a big order for the 787 and the only question then is how many parachute do you have for the Delta Execs?

Damn why am I not an Airline Exec?
 

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