latest cramden bombshell: "breathtaking"

ralphcramden

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Nov 16, 2006
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brooklyn
latest ralphcramden bombshell: “breathtakingâ€





It was a most interesting week for followers of one the most interesting business stories in years. It may be fairly said that this unique happening has impacted an entire industry in ways not yet fully understood. This evenement, of course, is the emergence of the journalistic and cultural phenomenon known as “cramden nation.†This discerning cadre of intellectuals knows where to turn for their periodic feast for the mind. cramden nation, read on!


Keep Delta My Delta


For the loyal band of brothers known collectively as the “Delta family,†it was a most interesting week as well. This was the week that these genial but unflinching stalwarts, standing shoulder to shoulder and inspired by the exalted words of a United States Senator quaintly named “Johnny,†told the world that their company was not for sale. And with that, the ground under Citigroup headquarters shook, and the deal, Mr. ralphcramden can now report, was off!

Sadly, things did not actually happen that way, but even luv2fly and “Abe†deserve a momentary escapement from the daily torrent of shocking developments. May we offer them our sympathy, our comradeship, and perhaps even a helpful suggestion that Johnny Walker Black is best enjoyed on the rocks.

So let us now, steadfast members of “cramden nation," standing shoulder to shoulder and sporting red buttons, march fearlessly into that cold Wall Street netherworld known as reality.

In his last communicade, Mr. ralphcramden revealed exclusively that a rift has developed within the DALRQ board. Tonight, Mr. ralphcramden can state that several members of the board have taken a firm position with Mr. Gerald Grinstein that the LCC proposal deserves full consideration, up to and including an agreement allowing LCC to conduct due dilgence in the matter. These board members are not taking a pro-deal position per se, but have rejected the “Just Say No†position of Mr. Grinstein, CEO of the struggling, Hapeville-based carrier.

The beleaguered Georgians have been weathering virtually unanimous input (sans “Alpaâ€) from stakeholders in favor of the "full consideration" position for some time. The advocacy of outside directors for that position has now carried the day, and due diligance will be taking place. Look for the announcement in the next several weeks.


The Real Story


The growing company of “cramden enthusiasts†were, of course, among the first in on the joke as the “old media†missed yet another interesting subplot. Loyal readers will recall that the business press was caught unawares as an innocuous comment by JetBlue Airlines (JBLU) CEO David Neeleman became the “story†that JBLU would be interested only in gates at DCA and LGA in the impending Delta (DALRQ) fragmentation. How wrong they were!

Mr. ralphcramden, who alone reported that the suave executive “wants in, and in a big way,†can now reveal the following. JetBlue Airlines (JBLU) is covetous of a package of gates and facilities at a number of airports including but not necessarily limited to the following: LGA, DCA, ATL, PHL, CLT, PIT, FLL, TPA, MCO, and LAX. Happy days are here again in Forest Hills.


North By Northwest


Mr. ralphcramden can tonight reveal yet another exclusive, and one that will do nothing for the festive holiday gaiety in Peachtree City. Enthusiasts of the writings of Mr. ralphcramden are well aware of the uncanny accuracy of his stunning series of bombshells, posted on the once irrelevant US Aviation.com website. Tonight, Mr. ralphcramden’s sources will not disappoint.

Mr. ralphcramden’s contacts have revealed the breathtaking news that Eagen, MN based Northwest Airlines has begun exploring a potential cooperative role, along with LCC, LUV, AAI, JBLU, and UAUA in the acquistion and effective fragmentation of DALRQ. Recently retained boutique banking firm Evercore Partners has been involved in the very preliminary discussions. Mr. ralphcramden’s sources have floated a potential scenario that would reduce the LCC share to as little as 55% of a fragmented DALRQ. NWACQ would gain a BIG chunk of the rest, with the remains divided between the other players. Mr. ralphcramden can report with certainty that this news has Wall Street buzzing!


Regards,

ralphcramden
 
I believe Ralphcramden has a point that Delta could find itself carved up/fragmented and one strong reason why is the Delta pilot reaction to the merger.

Delta ALPA’s fragmentation protection is not that strong and the end result is companies like Goldman Sachs or Evercore could propose options to the financial community that could break up the Atlanta-based company and dispense of the assets without employees due to labor issues.

I believe this scenario is a real risk for Delta employees and one option to help avoid this result is for Delta and its employees to embrace US Airways’ offer.

Will a Delta fragmentation happen? I do not know. What I do know is that it's being actively discussed as possible M&A option by "informed" ALPA people.

Regards,

USA320Pilot
 
Well, if ralphcramden is right and the US/DL/etc deal goes through, the only chance the DL people have to avoid fragmentation is for DL to emerge as a stand-alone carrier. According to ralph, LCC will be a willing participant in the fragmentation of DL.

""that Eagen, MN based Northwest Airlines has begun exploring a potential cooperative role, along with LCC, LUV, AAI, JBLU, and UAUA in the acquistion and effective fragmentation of DALRQ"

Jim
 
A deal is going to happen. It might not be the deal that was originally proposed by US, but something is going to come down. There is way too much money out there waiting to be spent. Flyastrojets believes that Delta is about to be "parted out" as we used to say back in the day when I was hanging around a certain little country airport in rural eastern NC.
 
We can only hope and pray (and not "prey" like Dog Porker) that this will not transpire. I want to see Porker eat humble pie. May Santa put coal in his stocking this Christmas and leave his family a box of dead kittens.


that's just down right rude and uncalled for.i mean what has parker done?
 
A deal is going to happen. It might not be the deal that was originally proposed by US, but something is going to come down. There is way too much money out there waiting to be spent. Flyastrojets believes that Delta is about to be "parted out" as we used to say back in the day when I was hanging around a certain little country airport in rural eastern NC.

Proof positive that people, even those with money, are dumb. Who in their right mind invests in the airline industry these days?
 
It is my understanding the Delta pilot contract states:

- Fragmentation Transaction: Sale of certain assets that produce 20% or more of the operating revenue, block hours or ASMs of the Company during the 12 months prior to the transaction.
- Disposes of the Song trade name, logo or trademark with one half or more of the aircraft then allocated to the Song operation.
- At the request of the Association, Company will require the transferee to:
o Employ a certain number of Delta pilots based on the number of crewmembers required for transferred assets
o Offer employment to eligibility criteria determined by ALPA and the Company, or an arbitrator
o Seniority integration procedures pursuant to ALPA Merger Policy or Allegheny-Mohawk Labor Protective Provisions

In my opinion, a fragmentation scenario would be not good for Delta’s employees, who are a great group of people. If the airline is carved up and part of the pilots go to America, Southwest, JetBlue, or AirTran what protections will you have?

One needs to look no further than to American and TWA to see how an ALPA - non-ALPA integration worked and how the TWA wmployees faired. With a break up of Delta, if that happens, what would happen to the Delta employees, many that do not have union protection?

However, if Delta merges with US Airways the pilots would have two ALPA carriers combining with ALPA contract protections, versus a potential fragmentation with a company that may not honor any of your fragmentation policy contained in Section 1 of the PWA.

I fully understand the fear and uncertainty in an airline bankruptcy. We at US Airways faced this situation twice and in many respects are lucky to be here. Now US Airways and America West have combined to become one of the financially strongest airlines in the world.

In fact, US Airways has a 2006 YTD Pre-Tax Income Margin of 4.9%, which more than twice the industry mean of 2.2% and is one of the most profitable airlines in the country. By comparison, United emerged from bankruptcy (about the same time as US Airways) as a stand-alone company and its 2006 YTD Pre-Tax Income Margin 0.5%, which is 1.7% worse than the industry mean after all of their “formal reorganizationâ€￾ cost cutting. Could the same thing happen to Delta and a stand-alone post bankrupt company?

I recently heard US Airways president Scott Kirby speak, a man I believe has integrity, and he said the New Delta would have the best balance sheet in the industry, the best earnings power in the industry, and he committed to offering the employee groups the highest cost contract of the three companies that would make up the New Delta (America West, Delta, and US Airways). With the company predicted that they could exceed the $1.65 billion in economic synergies, what kind of job security would that create for all of us and how much power would that give to all of the different Joint Negotiating Committee’s to improve our pay, benefits, and retirement even more?

I believe the creditors committee is going to do what is best for the creditors, not the employees. As we all know far to well, labor has not faired well in bankruptcy court and I believe Delta ALPA could be creating a real risk for their members. Will a Delta fragmentation happen? I do not know. Maybe, maybe not. However, what I dod know is that it is being discussed by key ALPA officials as a potential issue that may need to be dealt with in the future.

Best regards,

USA320Pilot
 

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