U.S. Airways bids 8 Billion to buy Delta

[BoilerUP]

skywest will be hiring for ALONG time......

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.

 

[Tarzan]

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).

 

[John Pennekamp]

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.

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.

 

[On Your Six]

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.

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...

 

[Marko Ramius]

????

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.

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.

 

[Quack]

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.

 

[Jeff Helgeson]

It's the Adam's-apple....

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:

...that's what really scares me!

 

[Flybet3]

This could get interesting:

http://www.startribune.com/535/story/812431.html

Discuss amongst yourselves...

It appears that US Airways has some money. I wonder how creditors feel about this.

 

[dav8or]

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?

 

[WSurf]

dang why am I not an Airline Exec?

Cause you didn't work hard enough in school!

 

[Swaayze]

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.


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?

dang why am I not an Airline Exec?

You seem to have the right idea. In fact I saw somewhere today that Kirby said LCC will look to essentially vacate the 50 seat RJ market and go with 70+ (and mentioned 90+ all at mainline).

 

[time builder]

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?

dang why am I not an Airline Exec?

I think you're on the right track also. The reason they called regionals cheaper to fly was because of the low break even load factor. In the last five years, regionals have gone from roughly 60% break even load factor to closer to 80%, which puts it closer to the majors. Maybe someone else can explain this change better than I can.

Not only does it make sense that you would pay less for pilots given the passenger to pilot ratio (as you pointed out), but they were never cheaper on the fuel. RJs typcially use as much fuel per seat mile as a 727.

Add in a "shortage of qualified pilots" coming out of the flight schools, consolidation and mainline focus would require less pilots besides the savings on the previously mentioned overhead costs, and would be a good move.

All this being said, the primary factor is that USAir is tired of being stuck in the low fare short haul market, and wants to get in on the international action where there's less competition.

 

[CallmeJB]

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?

Just to throw this out there:

The way I see it, CVG would be a good asset. It's got another new runway and no ARTCC traffic issues. I'm thinking they finish the shutdown of PIT, make PHL a focus city, and hub out of CVG. LCC needs a midwest base as it is.

Discuss...

 

[time builder]

Why speculate, when you can read the proposal for yourself:
http://airlinepilotcentral.com/airlines/legacy/delta.html

They want CVG as a hub for the midwest, wheras PIT would focus on the Northeast.

As far as "hub closures" go, there's not mention of BOS, MCO, or LAS in the proposed hubs, but given the amount of local traffic, I would expect they would maintain a large presence.

 

[ballsdeep123]

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.

Aren't hostile takeovers usually when the creditors don't want the buyout? In this case the creditors would be the ones welcoming it.

 

[ballsdeep123]

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...

I've talked to a couple of US Airways pilots and they said they think that most of the Airways pilots would probably welcome the merger. They both have senior pilots and it would probably would help them get a better integration with the America West guys, plus it would help ALPA become a little more unified.

 

[dav8or]

Cause you didn't work hard enough in school!

I partied just as hard as they did if not more in college. I just didn't play golf at the right CC or marry the daughter of the CEO

 

[atpcliff]

Hi!

My wife filled me in on a bunch of stuff happening 2 days ago:
USAir bid to acquire Delta about 2 months ago. Delta's mgmt and board didn't want to be bought out, so they didn't tell anyone.

So, USAir finally had enough, and went public, so the creditors and stockholders would know they'd been offered a ton of money for their stock and/or obligations.

The creditors love it, and want the deal badly. Delta mgmt and board hate it. No one knows what the stockholders want because they just found out.

If the merger goes through, then NWA will merge with CO to defend themselves.

In separate activity, AirTran announced a code share with Frontier, similar to the NWA/Delta/CO codeshare. Now AirTran is looking to buy/merge with Midwest Airlines, which would be even more incentive for NWA to merge with CO.

cliff
YIP

 

[WSurf]

I partied just as hard as they did if not more in college. I just didn't play golf at the right CC or marry the daughter of the CEO

lol True! Gotta love america!

Saw something interesting on TV! In the 1970's CEOs of Company's made about 17 times what there regular employee made! And today CEOs at companies make about 300 times as much! Sounds to me like the middle class of the country is going down the pooper!! The gap between the haves and have nots is growing fast in the country! Look Out!

 

[atpcliff]

Hi!

It doesn't matter how much of a monetary division between the classes. All you have to do is look back at history and you can see how it doesn't matter.

For example, in France in the 1800s, there was a HUGE difference between the few filthy rich and the teeming masses of the poor. Throughout all of the 1800s and leading into the 20th century, France was 100% stable and had no problems resulting from their monetary inequites.

cliff
YIP

PS-Wait...maybe the above assessment was wrong?