What Delta wants

[A350]

A couple of points to consider.....

USAirways has been an Airbus buyer for the past few years....and even with the A350. However, there are a few things that are a given.

The fleets don't match very well. However there are a couple of gems in the rough there. DAL has some older 767's and they have some older 757's. They have quite a few MD88's that are older as well. USAir has a lot of older 737's and some 757's that belonged to EAL. To make a merger work, there has to be synergies down the road. Fleet commonality is something to strive for but doesn't have to be a deal breaker, especially when one is still in the BK process. Fleet recapitalization can happen a lot faster and a lot more cost effectively when you can crap can the leases on airplanes at will and on the other side, when the inevitable large increases in captial that accompany an exit from BK, there invariably will be a large aircraft order. This is where USAir gets Boeing to go along with the proposal. Now perhaps DAL already has a big Boeing order ready to fly, but to get AWA/USAir to basically switch back to Boeing could push them into going along with the deal.

Route overlap is another issue. USAir couldn't make PIT/PHL work, but AWA makes PHX/LAS work. There doesn't necessarily have to be massive carve outs other than the Shuttle and perhaps a few gates at LGA, BOS, CLT,DCA, and ATL. In a merger scenario, the facility overlap sometimes makes this a moot point as consolidating facilities is part of the efficiency of a merger.

Labor is another issue. In this scenario, I would bet one of the 50 seat regionals is a goner. I couldn't tell for sure what AWAC's contract is but Comair is in BK with DAL and it would make sense that their 50 seaters go away and with a new labor agreement, perhaps some 70-90 seaters come their way. Depends on what the mainlines need to support the flying.

Congress is the last hurdle. I suspect that with DAL in BK, they will be less inclined to stop it. However, DAL is not TWA when they were bought out by AMR and even the UAL/USAir merger was a go as far as the DOJ was concerned with the carve outs.

I give it a 70-30 chance in favor of it going through.....that is unless someone else offers more.

A350

 

[Lampshade]

A couple of points to consider.....

USAirways has been an Airbus buyer for the past few years....and even with the A350. However, there are a few things that are a given.

The fleets don't match very well. However there are a couple of gems in the rough there. DAL has some older 767's and they have some older 757's. They have quite a few MD88's that are older as well. USAir has a lot of older 737's and some 757's that belonged to EAL. To make a merger work, there has to be synergies down the road. Fleet commonality is something to strive for but doesn't have to be a deal breaker, especially when one is still in the BK process. Fleet recapitalization can happen a lot faster and a lot more cost effectively when you can crap can the leases on airplanes at will and on the other side, when the inevitable large increases in captial that accompany an exit from BK, there invariably will be a large aircraft order. This is where USAir gets Boeing to go along with the proposal. Now perhaps DAL already has a big Boeing order ready to fly, but to get AWA/USAir to basically switch back to Boeing could push them into going along with the deal.

Route overlap is another issue. USAir couldn't make PIT/PHL work, but AWA makes PHX/LAS work. There doesn't necessarily have to be massive carve outs other than the Shuttle and perhaps a few gates at LGA, BOS, CLT,DCA, and ATL. In a merger scenario, the facility overlap sometimes makes this a moot point as consolidating facilities is part of the efficiency of a merger.

Labor is another issue. In this scenario, I would bet one of the 50 seat regionals is a goner. I couldn't tell for sure what AWAC's contract is but Comair is in BK with DAL and it would make sense that their 50 seaters go away and with a new labor agreement, perhaps some 70-90 seaters come their way. Depends on what the mainlines need to support the flying.

Congress is the last hurdle. I suspect that with DAL in BK, they will be less inclined to stop it. However, DAL is not TWA when they were bought out by AMR and even the UAL/USAir merger was a go as far as the DOJ was concerned with the carve outs.

I give it a 70-30 chance in favor of it going through.....that is unless someone else offers more.

A350

All great points but has nothing to do with this merger going through. The Banks make this deal happen, and the rest of that stuff you typed about is housekeeping items AFTER the bankers get there money.

 

[atpcliff]

Hi!

USAir has already said it will sell of one of the shuttles to get regulatory approval.

cliff
YIP

 

[Thebadcat1313]

With a recent $52 million (or so) net profit last quarter and considerable international expansion that will pay huge dividends down the road, Delta can argue that things are trending well and it is not in financial trouble - it plans to exit bankruptcy relatively soon. Reducing customer choice will never be viewed positively - reducing flights from hubs can't be a customer benefit.

Plus, owning both NY shuttles will never be acceptable. It's too early to speculate - although that's all we hear from the "airline analysts" and fortune tellers on this board...

Since when has reducing customer choice had anything to do with whether or not mergers are approved? It has'nt stopped the banks or oil companies from merging, and it won't stand in the way of this, either. Remember, the airlines are still reeling from the massive losses of the last few years.

If the bankruptcy court has any sense, it will do what provides the best possible return for the creditors. Even though I'm not excited about this merger, it would be kind of cool to see management get their collective asses handed to them, ie, the bankruptcy process being twisted around and used against them for once.

They've already admitted that one of the shuttles would have to be divested. There would certainly be no shortage of interest.

 

[800Dog]

Since when has reducing customer choice had anything to do with whether or not mergers are approved? It has'nt stopped the banks or oil companies from merging, and it won't stand in the way of this, either. Remember, the airlines are still reeling from the massive losses of the last few years.

If the bankruptcy court has any sense, it will do what provides the best possible return for the creditors. Even though I'm not excited about this merger, it would be kind of cool to see management get their collective asses handed to them, ie, the bankruptcy process being twisted around and used against them for once.

They've already admitted that one of the shuttles would have to be divested. There would certainly be no shortage of interest.

Since the DOJ was formed. We are not talking about banks or oil companies. Apples to oranges.

 

[Whataboutbob]

Maybe the Delta, NWA merger is still a possibility. If Delta can buy sometime by dragging there feet and making it difficult for the creditors and others who have the say on the USAir-Delta merger. Maybe NWA can quickly emerge from bankruptcy and make the move, lol. All NWA has to do is make a deal with their F.A and come up with a plan to emerge from bankruptcy. I guess what Im saying is this might force NWA to try to get out of bankruptcy quicker than they wanted too.

 

[Tomct]

NEVER GOONA HAPPEN!!!

 

[FDJ2]

If Delta can buy sometime by dragging there feet and making it difficult for the creditors and others who have the say on the USAir-Delta merger.

I don't expect DAL to drag its feet through BK, on the contrary, the airline will most likely accelerate the process, DAL's CFO has recently stated that a Plan of Reorganization will be filed by mid-December. I also wouldn't be surprised if DAL makes some large aircraft orders as a poison pill, or makes some other committments, to discourage any possible suitors.

 

[Noserider76]

I don't expect DAL to drag its feet through BK, on the contrary, the airline will most likely accelerate the process, DAL's CFO has recently stated that a Plan of Reorganization will be filed by mid-December. I also wouldn't be surprised if DAL makes some large aircraft orders as a poison pill, or makes some other committments, to discourage any possible suitors.

I think a giant pilot pay raise might do the the trick.

 

[luckytohaveajob]

Airline system is rotten to the core

If the bankruptcy court has any sense, it will do what provides the best possible return for the creditors. Even though I'm not excited about this merger, it would be kind of cool to see management get their collective asses handed to them, ie, the bankruptcy process being twisted around and used against them for once.

Yes, it would be nice to see management lose control in the bankruptcy process and become the victims they have made labor.

Bankruptcy is not suppose to be a get out of jail free card. Europe does not even allow Chapter 11 only Chapter 7. In Europe when the kind of crap that has happen at CAL, EAL, PAN AM, Midway, UAL, DAL, NWA, US Air, and any others I have forgotten happen its game over.

The current system would be fully functional had European Union bankruptcy laws been in effect in the US. And labor would be the stronger for it, the airlines would be stronger, and the customer would be better off. The US airline system is based on Lorenzo's henchmen who are becoming more powerful, rich, and effective while making labor weaker, poorer, and SELFISH by dividing us against each other.

Greenjeans is the president of a bankrupt airline. He is no hero or good guy. He is the leader of a loser and is a loser. Steeland is another loser. And Tilton is the biggest loser. And the only redeeming aspect of CAL is that Lorenzo was prohibited from doing it again.

Where is ALPA and its members position on prohibiting all the latest CEOs from participating in the airline business? Oh, I know making partnership accords and helping coordinate the contracts. Keeping the dead living.

Bankruptcy is a disgrace. It is not a business plan nor is it right in any sense. The lawyers that practice this type of law are disgusting and immoral. The system is rotten to core.

Bankruptcy is a sign of failure nothing else. Who cares what DAL wants. DAL is should be out of business with all the others.