ringmaruf
Veteran
From Delta's informational brief with their Chapter 11 filing:
"In late May 2005, US Airways, struggling through its second bankruptcy in the past three years, announced that it had reached an agreement to merge with an LCC, America West Airlines ("America West"). Together, the two airlines will become the fifth-largest domestic carrier, and will have a combined $10 billion in annual revenue, 361 planes and 44,100 employees. The merger was enabled in part by US Airways ability to jettison its pension plans and renegotiate its labor contracts in bankruptcy so as to bring its labor costs to LCC levels.
Once the merger is consummated, US Airways will become "the first national low-cost hub-and-spoke network carrier." It will have a route network that heavily overlaps with Delta's system. In short, for the first time, a carrier with an LCC-cost structure will have both a nationwide domestic presence and a sizable international presence. US Airways has been Delta's biggest competitor. It just got bigger and more effective.
The significance of this development as a competitive threat to Delta is profound. A combined US Airways/America West will provide alternative low-cost service to more than 80 percent of Delta's domestic O&D passengers. In addition, the overwhelming majority of Delta's international passengers traveling to Europe, Canada and Mexico, Central America, or the Caribbean fly to destinations served by either US Airways or America West."
"In late May 2005, US Airways, struggling through its second bankruptcy in the past three years, announced that it had reached an agreement to merge with an LCC, America West Airlines ("America West"). Together, the two airlines will become the fifth-largest domestic carrier, and will have a combined $10 billion in annual revenue, 361 planes and 44,100 employees. The merger was enabled in part by US Airways ability to jettison its pension plans and renegotiate its labor contracts in bankruptcy so as to bring its labor costs to LCC levels.
Once the merger is consummated, US Airways will become "the first national low-cost hub-and-spoke network carrier." It will have a route network that heavily overlaps with Delta's system. In short, for the first time, a carrier with an LCC-cost structure will have both a nationwide domestic presence and a sizable international presence. US Airways has been Delta's biggest competitor. It just got bigger and more effective.
The significance of this development as a competitive threat to Delta is profound. A combined US Airways/America West will provide alternative low-cost service to more than 80 percent of Delta's domestic O&D passengers. In addition, the overwhelming majority of Delta's international passengers traveling to Europe, Canada and Mexico, Central America, or the Caribbean fly to destinations served by either US Airways or America West."