80% chance of US/DL merger
- Thread starter flycrazy77
- Start date
I certainly understand company pride and losing an identity, but the merger economics appear to be compelling.
US Airways' Merger Investor Presentation did a Merger Case Study comparing US Airways and United.
Both companies emerged from bankruptcy within a couple of months of one another. US Airways emerged with a merger partner (America West) and over $600 million in annual synergies, while United emerged independent.
2006 YTD Per-Tax Income:
Industry Mean: 2.2%
United: 0.5%
US Airways: 4.9%
Total Equity Return Since Emergence:
Industry Mean: 74%
United: 2%
US Airways: 164%
US Airways believes the Delta merger would provide a $1.65 billion in annual synergies and would create the "best in class" capital structure.
That's enormous, especially for every Delta and US Airways employee. What does that mean? More airline financial security than virtually every other airline.
After all issues the Delta and US Airways have been through, what would it like to become a team working for the most financiallly powerful airline in the world? Furthermore, I expect employees will obtain pay and benefits greater than the highest existing levels. Why? $1.65 billion in annual synergies.
In fact, if the merger does not proceed I doubt either company would pay their employees industry leading wages because the economics would be much, much worse for a stand-alone company. For Delta employees an argument can be made that their company's post-emergence pre-tax income could be similar to United because of not being able to obtain merger-bankruptcy savings created through a corporate combination.
Finally, I suspect the Delta "executive suite" is fighting the merger for two reasons: many will lose their job and the senior officers could lose millions of dollars in stock-based compensation.
Regards,
USA320Pilot
US Airways' Merger Investor Presentation did a Merger Case Study comparing US Airways and United.
Both companies emerged from bankruptcy within a couple of months of one another. US Airways emerged with a merger partner (America West) and over $600 million in annual synergies, while United emerged independent.
2006 YTD Per-Tax Income:
Industry Mean: 2.2%
United: 0.5%
US Airways: 4.9%
Total Equity Return Since Emergence:
Industry Mean: 74%
United: 2%
US Airways: 164%
US Airways believes the Delta merger would provide a $1.65 billion in annual synergies and would create the "best in class" capital structure.
That's enormous, especially for every Delta and US Airways employee. What does that mean? More airline financial security than virtually every other airline.
After all issues the Delta and US Airways have been through, what would it like to become a team working for the most financiallly powerful airline in the world? Furthermore, I expect employees will obtain pay and benefits greater than the highest existing levels. Why? $1.65 billion in annual synergies.
In fact, if the merger does not proceed I doubt either company would pay their employees industry leading wages because the economics would be much, much worse for a stand-alone company. For Delta employees an argument can be made that their company's post-emergence pre-tax income could be similar to United because of not being able to obtain merger-bankruptcy savings created through a corporate combination.
Finally, I suspect the Delta "executive suite" is fighting the merger for two reasons: many will lose their job and the senior officers could lose millions of dollars in stock-based compensation.
Regards,
USA320Pilot
- Thread Starter
- #18
US doesn't have to merge at all. Who was profitable all 2006? Hmmm....sure as hell not DL! As long as there's money to be made, why not take over all the former BIG carriers? Old Delta will never emerge as a stand alone.Funny. US is out there always having to merge or begging to merge. Sounds alot like a whore.
Actually, I think LCC does need to continue to transform, if you take the long view. Legacy carriers are not going to be able to make it from secondary domestic hub markets. This is why NWA is not a desirable merger partner, in my opinion, LCC is really not either, except for their sexy executives.
I see more problems than synergies. For example. Just how many different A/C types will the combined carrier have? We will probably have 80.65% of all pilots back in training each time the top guy retires.
luv2fly
Veteran
How profitable was US during their BK process? Pick one. Any one. You guys are old pros at it.
If it hadn't been for AW, US would be dead and gone. You really should be thanking them for saving your job.
Southwest - Fuel Hedges = Southwest in the same Boat
Talk about "smugness",
Some of you Southwest Suction Cups just may get a dose of reality in the years to come
AWA didn't save anyones job.
It has been posted many times before, Usairways employees [ones that took the huge Concessions], are the ones that made the take-over possible.
But it's evident you don't wanna here anything that resembles the TRUTH. Your obvious hatred for Usairways is overiding your ability to comprehend common sense.
US Scareways employees are already some of the worst in the business. Do you really want a bunch of pissed off Delta employees joining you? They will wipe the smugness off your face in a hearbeat, all the while sabotaging US Scareways into ruin. (Just to piss you off)
[/quote]
What a dweeb.
[What a classless response- picture edited by moderator]
[/quote]
What a dweeb.
[What a classless response- picture edited by moderator]
I dont care who you work for or if you even work for an airline. I dont care if you are for or against the Iraq War. All I can see is that you are a tackless human being. We ALL mourn the loss of life and especially in an airline crash. We all try to professionally do our jobs(career)in this tough industry and whenever there is a fatality we all feel it. We all join together to help where we can and offer prayers or whatever is necessary and that is why this picture is extremely OFFENSIVE. Please aplogize and we will accept it as a momentary loss of sanity.
After hearing about the merger announcement I initially thought why would Doug Parker not seek Northwest as a partner instead of Delta if for nothing else less route overlap and a more similar fleet. After at looking at Delta Closer, the fleet's are more similar than I originally thought.
US Airways and Delta both operate B767s, B757s, and B737s. The two main differences are the MD-80 and B-777s and the A320's and A-330s. Delta operates 8 B-777s and US Airways 9 A-330s, thus, according to Parker, one widebody fleet type would be replaced.
In my opinion, with Delta's recent B-777LR order, with deliveries scheduled in 2008 and Airbus' continued widebody problems and US Airways' A-350s not scheduled to arrive until 2014, the A-330s could fairly easily be replaced by B-777s, which would eliminate one fleet type.
In addition, due to Delta being in bankruptcy, all of the MD-80s could have thier leases rejected on an incremental basis and returned to the lessor during or after bankruptcy, similar in scope to what US Airways did with its B737s.
These aircraft could then be replaced by either A-320 family aircraft and/or B737's, with US Airways close to announcing a narrowbody deal with either or both Airbus and Boeing in the not-so-distant future.
This could leave the combined carrier a fleet of:
B-777s
B-767s
B-757s
B-737s
A-320s (family)
EMB-190s
Two other points on why Parker may have selected Delta or Northwest are only two union's at Delta, one for the pilots and one for the dispatchers and the Shuttle.
US Airways has indicated the Delta Shuttle would be sold because of the MAT and no BOS-DCA mainline Shuttle service. If the Delta Shuttle is sold two AMR, there are some intangible benefits. AMR would likely replace the EMB-135/145 Shuttle service with MD-80s and this would eliminate one competitor in the market, boosting profitability for both the new Delta and AMR.
However, the new Delta would combine FFP's and keep most of the premium Shuttle business traveler, who is already enrolled in the Delta or US Airways program.
Finally, 2/3 of transatlantic traffic departs the U.S. for Europe from east of the Mississippi River, where Delta and US Airways have the majority of their service. This is obviously not the case with Northwest with two secondary and one major hub. Therefore, the new Delta would have enormous transatlantic feed and have the bulk of its domestic operation where the majority of the U.S. population resides.
What's important for employees to realize is that with $1.65 billion per year in economic benefits, there is every right to believe that each employee would be working for a financially stronger airline that would be able to provide more job security and higher pay and benefits than if the merger did not proceed.
Regards,
USA320Pilot
US Airways and Delta both operate B767s, B757s, and B737s. The two main differences are the MD-80 and B-777s and the A320's and A-330s. Delta operates 8 B-777s and US Airways 9 A-330s, thus, according to Parker, one widebody fleet type would be replaced.
In my opinion, with Delta's recent B-777LR order, with deliveries scheduled in 2008 and Airbus' continued widebody problems and US Airways' A-350s not scheduled to arrive until 2014, the A-330s could fairly easily be replaced by B-777s, which would eliminate one fleet type.
In addition, due to Delta being in bankruptcy, all of the MD-80s could have thier leases rejected on an incremental basis and returned to the lessor during or after bankruptcy, similar in scope to what US Airways did with its B737s.
These aircraft could then be replaced by either A-320 family aircraft and/or B737's, with US Airways close to announcing a narrowbody deal with either or both Airbus and Boeing in the not-so-distant future.
This could leave the combined carrier a fleet of:
B-777s
B-767s
B-757s
B-737s
A-320s (family)
EMB-190s
Two other points on why Parker may have selected Delta or Northwest are only two union's at Delta, one for the pilots and one for the dispatchers and the Shuttle.
US Airways has indicated the Delta Shuttle would be sold because of the MAT and no BOS-DCA mainline Shuttle service. If the Delta Shuttle is sold two AMR, there are some intangible benefits. AMR would likely replace the EMB-135/145 Shuttle service with MD-80s and this would eliminate one competitor in the market, boosting profitability for both the new Delta and AMR.
However, the new Delta would combine FFP's and keep most of the premium Shuttle business traveler, who is already enrolled in the Delta or US Airways program.
Finally, 2/3 of transatlantic traffic departs the U.S. for Europe from east of the Mississippi River, where Delta and US Airways have the majority of their service. This is obviously not the case with Northwest with two secondary and one major hub. Therefore, the new Delta would have enormous transatlantic feed and have the bulk of its domestic operation where the majority of the U.S. population resides.
What's important for employees to realize is that with $1.65 billion per year in economic benefits, there is every right to believe that each employee would be working for a financially stronger airline that would be able to provide more job security and higher pay and benefits than if the merger did not proceed.
Regards,
USA320Pilot
Thank you for the info and for always being so articulate. Im an emotional poster(like you couldnt tell!). Mama
wnbubbleboy
Veteran
Southwest - Fuel Hedges = Southwest in the same Boat
Talk about "smugness",
Some of you Southwest Suction Cups just may get a dose of reality in the years to come
Been there done that. Now I have enough seniority over here they would have to dig real deep to get to me. That's something I remembered from my first job; Dig in like a tick.
With that being said, not of of us are smug. Just the one's who have never seen the back end of the unemployment line.
Sorry if some posters here are making and a** of themselves please let that reflect on them individually not the group as a whole.
wnbubbleboy, Thank You for your response.
I know several people that now work for Southwest that share your sentiments.
It's just Pathetic, when one "MORON" gets on here and runs his mouth about things that don't even pertain to him.
longing4piedmont
Veteran
And he has always been sooooo accurate in his analysis and predictions....
Good to see you back B.O.B......
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