US/DL Merger Rumors Merely Slight of Hand???

[KozzyCFI]

When one looks at the info out there on this potential merger, you see very little commonality between fleet types, tons of route overlap, and a double-covering of the northeast shuttle. Could this merely be slight of hand to run the stockprices up of US to generate more capital and buying power to then turn around and buy Northwest, who has much better fleet commonality and much less route overlap...not to mention such coveted Pacific routes???? ala Frank Lorenzo???

 

[luckytohaveajob]

Don't forget Eastern

Lorenzo proposed a merger with National. Ran up the stock price of CAL in a bidding war for National with Pan Am bidding. Let Pan Am get suckered into buying National for way to much hurting both Pan Am and National. And then used the leverage gained in the bidding war to take the larger Eastern.

With US Air's stock going up 16% today, this could very well be the bait and switch game previously done by Lorenzo.

 

[pilot141]

Considering that USAir already has the billions of dollars in financing lined up from Citibank..........no.

They didn't SLIGHT anyone with their SLEIGHT of hand.

 

[luckytohaveajob]

Lorenzo used financing to purchase all his airlines

Citibank financing could be used on Northwest just as easily as it could be used on Delta.

Lorenzo never purchased an airline with his own money, he always used the banks.

Give me another reason why Parker could not be using Delta as the bait and switch to get into a bidding war with UAL, leave UAL holding an overpriced DAL, and then US goes onto to quickly buy NWA, CAL, or even AAI?

 

[pilot141]

I don't have a dog in this bait-and-switch Lorenzo fight. The OP asked about running up the stock price of US Air and I stated that the financing is coming from Citibank, not the equity of the stock. Check the post times - I was posting to the OP, not you.

 

[jetflier]

Hey -141...

A great point, and a strategy that seems to have worked before. We're all just along for the ride aat this point.
At NWA we'd be happy just to get rid of the Investment Banker owner a$$ holes that have been ruining NWA since the 1986 merger with Republic.

The entire corperate governance at NWA is money first, customer service last, as far as employees go, their motto is .."row harder".....!

 

[b19]

The bottom line is don't buy the new car, continue to drive the old junker, pay off all the credit cards, it's bah humbug for Xmas, and get ready for another round of shakeups and pain. Will there ever be an upside to this industry ?

 

[FlyBoeingJets]

On a related note....


How did "Labor" undo the deal between CAL and DAL years ago?? Can Labor undo another deal if it gets that close again??

 

[munson]

The bottom line is don't buy the new car, continue to drive the old junker, pay off all the credit cards, it's bah humbug for Xmas, and get ready for another round of shakeups and pain. Will there ever be an upside to this industry ?

Thats good advice regardless of whats going on in the industry, if we all did this, dudes wouldnt want to work till 65. ITS NOT ROCKET SCIENCE!

 

[michael707767]

On a related note...How did "Labor" undo the deal between CAL and DAL years ago?? Can Labor undo another deal if it gets that close again??

"Labor" did not really undo the deal between CAL and DAL, not directly anyway. Mullin refused to say Delta would honor CAL labor agreements regarding job protections and integration rights, and as a result Bethune backed out of the deal.

Mullin was quoted as saying, "you mean this fell apart over labor?" Later he would prove how little he understood labor relations.