Will the USAir/Delta Merger happen?

[spinproof]

. Jim Oberstar doesn't like mergers (a la his paper written during the USAir/UAL proposed merger) because one large merger would cause other mergers, and that will cause lack of "choice" for consumers, especially in the smaller cities. Sure, SW and AT could pick up some slots or gates in the larger cities, but they would not venture into smaller communities, like Hunington, WV. That is the key.

And, USAir WANTED to be merged with AWA, since they were going to liquidate. DL does NOT want to be merged, and they have Congressional support too that will help, besides Oberstar, the Chairman of the Committee.




Bye Bye--General Lee

General I wouldn't hang my hat on what some politician may or may not do. A constant thread in your thinking is he will stop this merger. I say he has little to no effect and will bend where a deal is to be made for his greater good!

Now the DOJ...thats a different matter!

http://forums.flightinfo.com/showthread.php?t=90199

 

[FDJ2]

General I wouldn't hang my hat on what some politician may or may not do. A constant thread in your thinking is he will stop this merger. I say he has little to no effect and will bend where a deal is to be made for his greater good!

Now the DOJ...thats a different matter!

http://forums.flightinfo.com/showthread.php?t=90199

Spin, I doubt this proposal will get much further than it already has, but if it does the input and recommendations of the Chairman of the House Transportation and Infrastructure Committee will have a great deal of influence with whether or not the DOJ will permit a merger.

Perhaps you know of an airline merger that was approved by the DOJ against the recommendation of the House Transportation and Infrastructure Committee, but I don't, so if you do please tell which one it was.

 

[spinproof]

Spin, I doubt this proposal will get much further than it already has, but if it does the input and recommendations of the Chairman of the House Transportation and Infrastructure Committee will have a great deal of influence with whether or not the DOJ will permit a merger.

Perhaps you know of an airline merger that was approved by the DOJ against the recommendation of the House Transportation and Infrastructure Committee, but I don't, so if you do please tell which one it was.

My point is Oberstar is ONE person on that committee. He is the Chairman but still one person! He is a politician. Would you bet anything on what a politician may or may not do on any given subject! Especially when so much is at stake!

Oberstar was against the USAir/AWA merger at first.....Hmmmm. I don't think this will fly either but for other reasons...

 

[FDJ2]

My point is Oberstar is ONE person on that committee. He is the Chairman but still one person! He is a politician. Would you bet anything on what a politician may or may not do on any given subject! Especially when so much is at stake!

Oberstar is a very influential man, in a very powerful committee and quite capable of making the Administration back down, even when more is at stake than just a merger.


[FONT=arial, helvetica]Transportation[/FONT]
[FONT=arial, helvetica]Airlines to Stay in American Hands
[/FONT][FONT=arial, helvetica]By Ted Reed
TheStreet.com Staff Reporter[/FONT]
[FONT=arial, helvetica]12/5/2006 3:42 PM EST[/FONT]
[FONT=arial, helvetica]URL: http://www.thestreet.com/newsanalysis/transportation/10326087.html


The Bush administration, facing strong Congressional opposition, has withdrawn a controversial proposal to reduce barriers to foreign ownership of U.S. airlines, but says it remains committed to the concept.

"It was clear from reviewing the comments that the [Transportation Department] needs to do more to inform the public, labor groups and Congress about the benefits of allowing more international investment," said Transportation Secretary Mary Peters, in a prepared statement.

Peters said the proposal, issued in 2005 and amended in May, would have provided U.S. airlines with more access to the world's capital markets.

She also reaffirmed the U.S. commitment to completing an Open Skies aviation agreement with the European Union. Talks have stalled because the U.S. has been unable to offer reciprocal access to international investment.

Meanwhile, a bipartisan group of members of the House Transportation and Infrastructure Committee welcomed the withdrawal of the proposal, saying it had threatened both national security and American jobs.

Democratic Congressman James Oberstar of Minnesota, the likely new chairman of the committee, commended Peters in a prepared statement "for choosing to do the right thing, in the face of strong pressure within the administration and from the European Union."

Added Frank LoBiondo, R-N.J., "Today's announcement is an acknowledgement that the consensus opinion of Congress was heard."

Limiting foreign ownership of domestic airlines like United, American and Continental (CAL) has long been a tenet of U.S. aviation policy, but the steady creep of globalization is calling the restrictions into question.

In November 2005, the DOT said it wanted to alter its rules, changing the interpretation of a provision of the law that governs "actual control" of a U.S. airline. While foreign investors would still have been limited to 25% of the voting stock, the change would have allowed foreigners to have "actual control" of the carrier and to make management decisions.

However, in June, the House voted by a better than 2-to-1 margin to attach language to an appropriations bill prohibiting the immediate implementation of the rule. [/FONT]

 

[NYRANGERS]

In other longer term issues, analysts predicted a good year for airline operators.

Calyon Securities Inc. analyst Ray Neidl in a client note said investors' initial excitement over U.S. Airways Inc.'s offer to pay $8.6 billion for the bankrupt Delta Air Lines Inc. is wearing off.

Investors are reconsidering what consolidation means for the industry, while weighing concerns about the economy and higher fuel costs, he wrote.

"We still believe that 2007 will be a strong year for airlines, with the U.S. industry producing about $5.6 billion in net income, compared to our estimate of $2.3 billion for 2006," wrote Neidl.

 

[General Lee]

Calyon Securities Inc. analyst Ray Neidl in a client note said investors' initial excitement over U.S. Airways Inc.'s offer to pay $8.6 billion for the bankrupt Delta Air Lines Inc. is wearing off.



That would happen eventually.


Bye Bye--General Lee