US Airways would keep DAL PWA

[lowecur]

1. Have you seen DAL's Plan of Reorganization? No, have you? However, we will all know something very soon. Don't forget, GG released a statement in Sept that DL is on a path to help the company to the tune of $3B by the end of next year. Well, Oct didn't look too good, and it's my bet that Nov won't either. I'll bet NWA will look much better than DL in those 2 months and the months to follow.

2. Parkers deal would add $8B in additional debt, which pretty much contradicts your entire point about debt. Actually, it's the ability to pay the debt that is important, don't you think?

.....

imp:​

 

[lowecur]

First of all, I disagree with you. A stand alone Delta will be financially stronger than the combined AWA/US/DL. That really is for the creditors committee consultants to determine.

Second, though you are correct that a lot of USAir pilots are retiring in the next five years, there are not a lot of DL pilots retiring. What difference does that make anyway? This is a good deal because a lot of guys are retiring? Yes.

Look, Delta may end up merging. And it may be in our best interest to merge. But a USAir/Delta merger does not make sense and is the last airline out there I would want to see us merge with.

NWA makes sense, but if you think your pilot group is tough on integration......you ain't seen noth'n. UAL makes sense and it may happen, but the employee groups there are also no picnic. CAL's route structure is very similar to DL's but a much better managed company.

The key to any merger is mgt. I don't believe there is another mgt group other than CAL that could handle this type of acquisition. DP is not only at the head of the class as far as Wall St is concerned, he is also there according to Ben Baldanza, the head of Spirit:

Parker started in a bit more sedate corner of the industry, landing a job in finance at American Airlines in 1986 after getting his MBA from Vanderbilt University.

He worked in a department that included a number of future top airline execs, including Gerald Arpey, CEO of American parent, and Jake Brace, CFO of United Airlines parent United Airlines.

"Even within that environment, Doug stood out as one of the brightest and smartest guys in the group," recalls Ben Baldanza, CEO of Spirit Airlines, who was another one of the young lions at American. "I knew he was a brilliant guy and good change leader since the first time I met him."

 

[michael707767]

.....Actually, it's the ability to pay the debt that is important, don't you think?

wow, for once we agree on something. But I believe a Delta/USAir merger does not make sense, will damage both airlines, and will ultimately end in failure. In the case of this potential merger, both airlines will be better off independent. Parker is not worried about long term. He is consumed with pulliing off the big deal. Accordingely, he will say anything he needs to say to justify this deal.

Answer one question. If US/DL ultimately fails, do you think Parker will lose one penny?

 

[FDJ2]

.....
Originally Posted by FDJ2
1. Have you seen DAL's Plan of Reorganization? No, have you?


But I didn't state:

"They are going to take on a ton of debt, and in my opinion Grinstein's plan is not enough to keep the airline viable through this perpetual inevitable economic roller coaster.

How do you know how much debt DAL will take on and how do you know Grinsteins plan is not enough, if as you have stated, you don't know his plan?


2. Parkers deal would add $8B in additional debt, which pretty much contradicts your entire point about debt. Actually, it's the ability to pay the debt that is important, don't you think?

That's true, but $8B is quite a bit of additional debt for an airline to take on when it expects to shrink by 10% and the $8B doesn't add a single aircraft, route, gate etc.

 

[lowecur]

wow, for once we agree on something. But I believe a Delta/USAir merger does not make sense, will damage both airlines, and will ultimately end in failure. In the case of this potential merger, both airlines will be better off independent. Parker is not worried about long term. He is consumed with pulliing off the big deal. Accordingely, he will say anything he needs to say to justify this deal.

Answer one question. If US/DL ultimately fails, do you think Parker will lose one penny?

No, I don't think he will. Actually on any merger that fails, the only one that loses are the employees and the public. I feel you need to be proactive rather than reactive. If we have another recession and DL is autonomous at the time, they could then be forced to deal from a position of weakness to survive. I sure wouldn't want to be you if that's the case.

Fortunately, Lee will be forced to be pragmatic when decision time comes. If it doesn't work out, it will be because the numbers didn't add up to the consultants and the committee. It will also mean that I am wrong, and GG's plan is working. We shall see.

imp: ​

 

[lowecur]

.....
Originally Posted by FDJ2
1. Have you seen DAL's Plan of Reorganization? No, have you?


But I didn't state:

"They are going to take on a ton of debt, and in my opinion Grinstein's plan is not enough to keep the airline viable through this perpetual inevitable economic roller coaster.

How do you know how much debt DAL will take on and how do you know Grinsteins plan is not enough, if as you have stated, you don't know his plan?


2. Parkers deal would add $8B in additional debt, which pretty much contradicts your entire point about debt. Actually, it's the ability to pay the debt that is important, don't you think?

That's true, but $8B is quite a bit of additional debt for an airline to take on when it expects to shrink by 10% and the $8B doesn't add a single aircraft, route, gate etc.

I think your circuits are jammed up there R2D2. I think you know my meaning and lets just say we agree to disagree.

imp:​

 

[FlyBoeingJets]

Fortunately, Lee will be forced to be pragmatic when decision time comes. If it doesn't work out, it will be because the numbers didn't add up to the consultants and the committee.
imp:

If you are referring to Lee Moak I see him focusing his members wishes, not selecting a course of action as a decision maker. He, as a union leader, will do what the membership mandates. Right now the union mandate looks like what is good for the company.

Next year or '08 we may be heading into a recession and the same union mandate may not be the best move for Delta. (Like that pilot contract that allowed ridiculously huge lump sum payouts). But Lee will ge obliged to follow the same course of action unless the membership changes their collective mind.

If he is an extraordinary leader he may make an appeal to the membership if he sees things shaping up badly for Delta as a stand alone carrier, but don't count on it. It would still be bad for a significant portion of the membership, in the short term, in a merger with USAir and there really is no selling that to the pilot union.

 

[lowecur]

If you are referring to Lee Moak I see him focusing his members wishes, not selecting a course of action as a decision maker. He, as a union leader, will do what the membership mandates. Right now the union mandate looks like what is good for the company. I assume you mean Lee is carrying out the wishes of the MEC. In either case he has to be given some latitude to negotiate at some point. I think his hard stance is indicative of any union leader in charge of getting the best deal for his membership.

Next year or '08 we may be heading into a recession and the same union mandate may not be the best move for Delta. (Like that pilot contract that allowed ridiculously huge lump sum payouts). But Lee will ge obliged to follow the same course of action unless the membership changes their collective mind. I would expect them to keep the present mandate until there is actually a face to face where everyone lays their cards on the table and decisions need to be made in a hurry.

If he is an extraordinary leader he may make an appeal to the membership if he sees things shaping up badly for Delta as a stand alone carrier, but don't count on it. Oh, I doubt he will go against the grain. The MEC's will have to decifer for themselves in a month or so whether it's worth taking the chance to soften. The window will only be open for a short period of time. What will be interesting is if everyone is on board but the pilots. Then the job of the BK judge becomes real interesting. It would still be bad for a significant portion of the membership, in the short term, in a merger with USAir and there really is no selling that to the pilot union.

Why would it be bad in the short term. Better contract, intergration postponed for 3-5 years, and no furloughs. Sounds like a win, win, ....if DP's numbers pan out.

imp:​

 

[FDJ2]

I think your circuits are jammed up there R2D2. I think you know my meaning and lets just say we agree to disagree.

imp:​

I think I see your contradictions more than anything else.