RedTailSwinger
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U.S. Airways trying to buy Delta
- Thread starter RedTailSwinger
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probablecause
This Lil' Piggy Flew Home
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NEW YORK, Nov 15 (Reuters) - US Airways Group, Inc. (LCC.N: Quote, Profile, Research) on Wednesday said it had made a merger proposal with Delta Air Lines Inc. (DALRQ.PK: Quote, Profile, Research) under which the companies would combine upon Delta's emergence from bankruptcy.
The proposal would provide about $8 billion of value in cash and stock to Delta's unsecured creditors, US Airways said. Delta creditors would receive $4 billion in cash and 78.5 million shares of US Airways stock with an aggregate value of around $4 billion based on Tuesday's closing stock price.
The proposal would provide about $8 billion of value in cash and stock to Delta's unsecured creditors, US Airways said. Delta creditors would receive $4 billion in cash and 78.5 million shares of US Airways stock with an aggregate value of around $4 billion based on Tuesday's closing stock price.
lowecur
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Yikes!!!
This one took me by surprise. Grinstein said he would not entertain a buyout or merger, so it will be interesting to see his response. The new carrier would have the Delta name. Lots of cuts and consolidation in this deal with both carriers dominant East Coast networks. Dougy and Co. obviously see the synergistic savings, but my guess is DL is being purchased for it's valuable parts and the rest will be left on the cutting room floor.
If this goes through, other Legacy Carriers will be forced to do the same to compete.
imp:
This one took me by surprise. Grinstein said he would not entertain a buyout or merger, so it will be interesting to see his response. The new carrier would have the Delta name. Lots of cuts and consolidation in this deal with both carriers dominant East Coast networks. Dougy and Co. obviously see the synergistic savings, but my guess is DL is being purchased for it's valuable parts and the rest will be left on the cutting room floor.
If this goes through, other Legacy Carriers will be forced to do the same to compete.
imp:
Last edited:
Wow,that was surprising even though Parker has been talking about yet another merger for several months. It’ll be interesting. Did they ever integrate seniority lists at AWA and USAir or is it still going on? ...http://www.usairways.com/awa/content/operations/merger/default.aspx
just got this....
letter from Doug Parker
Dear US Airways Employee,
Are you sitting down?
I have some big news this morning that will surprise some, stun others and – I hope – spark the imagination and competitive spirit in all of us.
This morning we made a proposal to merge with Delta Air Lines. We’ve approached Delta and their creditors with an offer of approximately $8 billion in cash and equity that we would raise in the financial markets. If successful, we would become one of the world’s largest airlines and serve more than 350 destinations on five continents.
Before you ask the obvious question (Gee, Doug, does it really have to be about how big we are and shouldn’t it be more about how good our service/operation is?), let me ask you to step back a bit and look at the larger, long-term picture.
Of course, we have a lot of work right now as we finish our integration. Work continues on the reservations migration, operating certificate and labor contracts.
So while we would prefer that this opportunity wait for that work to be completed, the fact is the world is not going to wait for us. The industry is evolving. Opportunities to grow, expand our network and create a more secure future for our airline don’t come along very often. If we don’t take these opportunities when they present themselves, someone else will.
A lot of people were skeptical about the America West/US Airways combination. We’ve proven them wrong: we’re recalling employees and hiring new people, we’re hitting our integration goals and quickly fixing the inevitable problems that have cropped up during integration and we’re doing all of this profitably.
As a result, we’re a much more successful airline than many thought possible a year ago.
That kind of opportunity exists again for us. A US Airways/Delta combination will give employees a more stable global enterprise, well-positioned for long-term success, able to compete effectively with any type of carrier and better able to weather economic downturns and industry volatility.
Our new airline would have a market share of approximately 18 percent, just slightly larger than the current largest carrier. We would be the largest carrier across the Atlantic to Europe and have the second strongest position in the Caribbean.
Going forward, our transaction must be approved by Delta’s creditors, the bankruptcy court, government regulators and our own shareholders. There is always the possibility that this transaction might not be accepted or approved. Even so, it will be worth the effort.
The history of our business is one of seizing opportunities. We are capable of continuing our integration process while pursing a transaction that will only make our airline better for our customers, employees and shareholders.
Like many of our big announcements, I expect that this one will generate a lot of questions from you, your families, your neighbors and co-workers. We have lots of information on awaCompass and theHub. We’ve also distributed information to your department leaders, and we invite you to listen in to two webcasts today, at 8:15 a.m. EST and 9:35 a.m. EST, both reachable through usairways.com >> About Us >> Investor Relations >> Webcasts/Presentations/Updates.
We are also scheduling an employees-only webcast with me, for Thursday at noon Eastern Time, and will be sending instructions today and tomorrow for linking to that presentation.
Please send questions or comments to [email protected] and look for some of the most frequently asked and answered questions on awaCompass and theHub. I’ll also be out in the operation and visiting in Town Halls or other employee meetings, and I hope you’ll take the time to ask questions.
Thanks for all that you do.
Sincerely,
letter from Doug Parker
Dear US Airways Employee,
Are you sitting down?
I have some big news this morning that will surprise some, stun others and – I hope – spark the imagination and competitive spirit in all of us.
This morning we made a proposal to merge with Delta Air Lines. We’ve approached Delta and their creditors with an offer of approximately $8 billion in cash and equity that we would raise in the financial markets. If successful, we would become one of the world’s largest airlines and serve more than 350 destinations on five continents.
Before you ask the obvious question (Gee, Doug, does it really have to be about how big we are and shouldn’t it be more about how good our service/operation is?), let me ask you to step back a bit and look at the larger, long-term picture.
Of course, we have a lot of work right now as we finish our integration. Work continues on the reservations migration, operating certificate and labor contracts.
So while we would prefer that this opportunity wait for that work to be completed, the fact is the world is not going to wait for us. The industry is evolving. Opportunities to grow, expand our network and create a more secure future for our airline don’t come along very often. If we don’t take these opportunities when they present themselves, someone else will.
A lot of people were skeptical about the America West/US Airways combination. We’ve proven them wrong: we’re recalling employees and hiring new people, we’re hitting our integration goals and quickly fixing the inevitable problems that have cropped up during integration and we’re doing all of this profitably.
As a result, we’re a much more successful airline than many thought possible a year ago.
That kind of opportunity exists again for us. A US Airways/Delta combination will give employees a more stable global enterprise, well-positioned for long-term success, able to compete effectively with any type of carrier and better able to weather economic downturns and industry volatility.
Our new airline would have a market share of approximately 18 percent, just slightly larger than the current largest carrier. We would be the largest carrier across the Atlantic to Europe and have the second strongest position in the Caribbean.
Going forward, our transaction must be approved by Delta’s creditors, the bankruptcy court, government regulators and our own shareholders. There is always the possibility that this transaction might not be accepted or approved. Even so, it will be worth the effort.
The history of our business is one of seizing opportunities. We are capable of continuing our integration process while pursing a transaction that will only make our airline better for our customers, employees and shareholders.
Like many of our big announcements, I expect that this one will generate a lot of questions from you, your families, your neighbors and co-workers. We have lots of information on awaCompass and theHub. We’ve also distributed information to your department leaders, and we invite you to listen in to two webcasts today, at 8:15 a.m. EST and 9:35 a.m. EST, both reachable through usairways.com >> About Us >> Investor Relations >> Webcasts/Presentations/Updates.
We are also scheduling an employees-only webcast with me, for Thursday at noon Eastern Time, and will be sending instructions today and tomorrow for linking to that presentation.
Please send questions or comments to [email protected] and look for some of the most frequently asked and answered questions on awaCompass and theHub. I’ll also be out in the operation and visiting in Town Halls or other employee meetings, and I hope you’ll take the time to ask questions.
Thanks for all that you do.
Sincerely,
I think that this scenario had been predicted during the pre-deregulation era. Ultimately, it was going to come down to just a few large carriers and a feeder apparatus like CHQ, TSA and the like. I am not business savvy, but it would seem to me that the USAirways lawyers and accountants have done their homework and know exactly how much leverage DL has to hold off either a hostile take-over or merge from bankruptcy. I think that is going to be ugly for organized labor, and may result in what happened at TWA following the AA buyout. However, I think what we are seeing is inevitable. Perhaps, it will be NWA/CAL next?
Regards,
ex-Navy Rotorhead
Regards,
ex-Navy Rotorhead
coogebeachhotel
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Groucho
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He is the $.02 from a US pilot who has been through 4 mergers.
Dougie is just testing the waters. He knows how difficult an integration of this size would be and how hard it would be to make this a lean survivor that could compete against all other LCC's. The difficulties are huge and the outcome and history of mergers clouded.
However, the fact is that there are too many seats chasing too few passengers willing to pay a fair price for the product. This will get worse with the advent of Virgin America and this Skybus operation, if that ever gets off the ground.
US Airways now has a profitable cost structure and the way to continue to prifitability is to get consolidation going in the industry. Any consolidation will help remove excess seats, it doesn't have to be US Airways. Dougie may be hoping that this hostile bid will bring out other possible bidders and get industry consolidation underway.
Again this is just my $.02
Dougie is just testing the waters. He knows how difficult an integration of this size would be and how hard it would be to make this a lean survivor that could compete against all other LCC's. The difficulties are huge and the outcome and history of mergers clouded.
However, the fact is that there are too many seats chasing too few passengers willing to pay a fair price for the product. This will get worse with the advent of Virgin America and this Skybus operation, if that ever gets off the ground.
US Airways now has a profitable cost structure and the way to continue to prifitability is to get consolidation going in the industry. Any consolidation will help remove excess seats, it doesn't have to be US Airways. Dougie may be hoping that this hostile bid will bring out other possible bidders and get industry consolidation underway.
Again this is just my $.02
Ganja60Heavy
what we talking about?
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coogebeachhotel
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- Dec 8, 2005
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Maybe in the past yes but this is the real deal. But I don't expect anyone to look like they did today after all is said and done. This venture is going to be a bloody one.
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