U.S. Airways trying to buy Delta

[VeeOne]

Imagine the sounds on the radio in ATL of "Catus xxx" in a southern drawl!!!

I'm sure that's already going on/happened with the surplus Piedmont (the REAL Piedmont) guys that found themselves in yet another merger with AmWest.

 

[lowecur]

Will someone else submit a bid?

Yeah, probably. The other airlines and Wall St Bankers aren't going to let Doug waltz away with this at this price. Someone will step forward and force Doug & Citicorp to up the ante.

Any other Wall St Banker that got involved would want to see a mgt team with the savy of a Doug Parker. I doubt they would be happy to entertain a bid from UAL. UAL just doesn't have the mgt in place to run this type of a deal. That leaves AMR, CAL, and NWA. AMR would have a tough time convincing the DOJ due to the shear size of any new entity.

In the end, the creditors are calling the shots on this and they should have a few offers to look at.

imp:​

 

[BILL LUMBERG]

CNBC is interviewing two analysts from Bear Stearn and Standard and Poor's.... these two practically creamed their shorts. They essentially said it doesn't matter what Delta wants, this thing is going to happen.

These must be the same analysts who called UAL and USAir toast a few years back.......stay tuned this is just the orchestra warming up....the fat lady has yet to sing.

Anybody got the number to that truck driving school?? Truckmasters I think it is..???

 

[MJG]

Uhh, tell me again where the safe job in this industry is these days, until today I thought I had that part figured out.

 

[skiav8tor]

If I understood Parker correctly, the proposal is to merge the airlines after DAL exit bankruptcy.

It's an interesting proposal, lots of $$$, we'll see what happens.

To the contrary...it would have to happen before Delta emerges from BK. to be successful at these dollars.

 

[Mooseflyer]

In the management office.....

 

[Swaayze]

Yeah, probably. The other airlines and Wall St Bankers aren't going to let Doug waltz away with this at this price. Someone will step forward and force Doug & Citicorp to up the ante.

Any other Wall St Banker that got involved would want to see a mgt team with the savy of a Doug Parker. I doubt they would be happy to entertain a bid from UAL. UAL just doesn't have the mgt in place to run this type of a deal. That leaves AMR, CAL, and NWA. AMR would have a tough time convincing the DOJ due to the shear size of any new entity.

In the end, the creditors are calling the shots on this and they should have a few offers to look at.

imp:​

The problem with DAL getting other bids is twofold. One, LCC already has the $$ lined up, a huge advantage. Two, the timing was carefully crafted IMO to allow LCC just enough time to get DAL prior to BK exit but close enough to it that other bidders won't be able to put together a viable package to contest it. There will, of course, be some carve-outs: AA will most likely get the extra shuttle, and I'm sure there will be some others as well.

 

[MJG]

I was thinking aircraft fueler........don't think that job is going away anytime soon.

 

[Crzipilot]

Interesting, some of the speculations here. Here's what Doug put out..

http://usairways.com/awa/content/aboutus/i...ns/webcast.aspx

Check the slideshow.....says, no hubs going away.......but also said somewhere, have to do this in BK as they don't want any synergies to get signed away in capacity agreements and such (RAH and US with the 170's which Parker wasn't happy with, and he's has publicly said how he hates Mesa....)

 

[MJG]

This looks interesting:

www.findatruckingjob.com

 

[FDJ2]

To the contrary...it would have to happen before Delta emerges from BK. to be successful at these dollars.

FWIW here is the quote from the press release.

TEMPE, Ariz. Nov. 15, 2006 — US Airways Group, Inc. (NYSE: LCC) announced today that it has made a merger proposal to Delta Air Lines, Inc. (OTC: DALRQ.PK) under which both companies would combine upon Delta’s emergence from bankruptcy.

 

[deadstick]

Hereis the webcast.
Here is a .pdf of the .ppt presentation.

Page 18

• Reduce service to marginal markets
• Discontinue unprofitable flying (for example, point-to-point)​

Page 22

– US Airways / America West reduced fleet 15% initially
– No mainline furloughs post merger, have begun hiring in every work group​

The "Connections" and "Expresses" will take the hit because of overlap. That's what I'm putting my money on.​

The plan has this happen before DA comes out of Ch 11 (see page 17) so they can still break contracts. I'm confused why the press release is different.

 

[GogglesPisano]

Consolidation+raising the retirement age = cats and dogs, living together.

 

[lowecur]

The problem with DAL getting other bids is twofold. One, LCC already has the $$ lined up, a huge advantage. Don't count out other Wall St Bankers coming up with a bid quickly...it happens all the the time. They let Citicorp do the dd, then they just hop on board. Bankers love to make it more expensive for their rivals to make money. This deal is going to cost more than $8B. Two, the timing was carefully crafted IMO to allow LCC just enough time to get DAL prior to BK exit but close enough to it that other bidders won't be able to put together a viable package to contest it. There will, of course, be some carve-outs: AA will most likely get the extra shuttle, and I'm sure there will be some others as well.

The deal needs to be put together while in BK(to jettison various baggage ie: Comair, but consumated once they exit.)

Also, I'll bet Grinstein has known about this for quite sometime. He is a Wall St insider, and it's my guess he played possum to keep the indians from getting too restless at DL.

imp:​

 

[SWAdude]

This is the first offer for Delta. This puts the pinch on the others that are wanting to be have a part of them also.

Today is ground zero in the final consolidation of the legacy side of the industry.

Lets hope it goes well.

 

[On Your Six]

The integration of USAirways and America West has not been smooth - for example, the pilot groups hate each other from what I have heard. Now Parker wants to add Delta and its pilot union to this mess. Former hub-communities like Pittsburgh have not faired well as a result of the merger - Pittsburgh has drastically reduced its service to the detriment of Pittsburgh business people. PIT airport now resembles a ghost town.

And now Parker wants to reduce overlap and essentially take competitors out of certain markets that would normally help to keep fares low. Yeah, the average consumer requiring low fares would support that...

 

[SWAdude]

The integration of USAirways and America West has not been smooth - for example, the pilot groups hate each other from what I have heard. Now Parker wants to add Delta and its pilot union to this mess. Former hub-communities like Pittsburgh have not faired well as a result of the merger - Pittsburgh has drastically reduced its service to the detriment of Pittsburgh business people. PIT airport now resembles a ghost town.

And now Parker wants to reduce overlap and essentially take competitors out of certain markets that would normally help to keep fares low. Yeah, the average consumer requiring low fares would support that...

I hear ya.

But this would work. The employees might not be happy but the network would be appealing to many consumers.

Consolidation will make for a more profitable industry. Thats an obvious appeal to management and stockholders.

The real question is what is the industry going to resemble in a couple years.

 

[zonker]

The good news is that James Oberstar isn't buying it.

He was on CNBC this afternoon talking about the current mantra that the industry "needs consolidation". He called it "nonsense" and said that the airlines are "doing well". What is needed is more competition, not less...in his words.

 

[xanderman]

slow down there haus...

The integration of USAirways and America West has not been smooth - for example, the pilot groups hate each other from what I have heard. Now Parker wants to add Delta and its pilot union to this mess. Former hub-communities like Pittsburgh have not faired well as a result of the merger - Pittsburgh has drastically reduced its service to the detriment of Pittsburgh business people. PIT airport now resembles a ghost town.

And now Parker wants to reduce overlap and essentially take competitors out of certain markets that would normally help to keep fares low. Yeah, the average consumer requiring low fares would support that...

For the record the pilots at AAA and AWA do not hate each other. We simply want what is best for our respective pilot groups. The arbitrator will see to it that we are all good and mad in the end. PIT was pulled way down long before Parker got a hold of AAA. And as far as fares go, well we all know SWA will be there to keep us honest...
Andy

P.S. where's my fricken bottle of Tums

 

[YourPilotFriend]

I
The real question is what is the industry going to resemble in a couple years.

Three big airlines competing to get onto the global scale.