donttouchthebeauty
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So it looks as if UAL and DAL are looking at combining - this will get interesting .. Good luck to all...
AA may no longer be the "lagest" carrier anymore
- Thread starter donttouchthebeauty
- Start date
North by Northwest
Veteran
Yeah, it will:
Dal+Ual = NW+Cal..+AA= checkmate
Hubs: Tri-parte
Tokyo
LA
MSP
DAL
DTW
ORD
JFK/EWR
MIA
HOU
----------------------------
SFO
ORD
DEN
ATL
IAD
JFK
CVG
-----------
Dal+Ual = NW+Cal..+AA= checkmate
Hubs: Tri-parte
Tokyo
LA
MSP
DAL
DTW
ORD
JFK/EWR
MIA
HOU
----------------------------
SFO
ORD
DEN
ATL
IAD
JFK
CVG
-----------
1 VF-1 2NV
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North by Northwest
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Day traders....SELL! NOW! :wub:
[NO, not a false alarm.
ATLANTA - UAL Corp.'s United Airlines and Delta Air Lines Inc. have been discussing a combination between the nation's second- and third-largest carriers that would keep the United name and the corporate headquarters in Chicago, The Associated Press has learned.
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Shares of both airlines surged on the news.
There is a sense of urgency in the talks, which have been going on for some time and continued as recently as a week or so ago, an official with knowledge of the talks said Wednesday. The official spoke on condition of anonymity because the person was not authorized to speak publicly.
"They want to get something done before a new administration gets in and so they get the clock ticking on" federal regulatory approval, the official said.
The exact financial details of the transaction being discussed are not clear. But the talks involve United being the name of the combined airlines, the headquarters staying in Chicago and Delta's Atlanta hub being an operational center for the two carriers, the official said. One possible scenario involves Delta CEO Richard Anderson being the chief of the combined airline, the official said.
Delta also has had talks with other airlines, the official said, without specifying which airline or the status of any such talks.
A spokesperson for Chicago-based United did not immediately return a call Wednesday seeking comment. Delta spokeswoman Betsy Talton declined to comment.
Shares of Delta rose $1.92, or 10.2 percent, to $20.67 in afternoon trading. UAL shares gained $4.20, or 9.7 percent, to $47.70.
Delta said in a statement Wednesday that its board has established a special committee to work with management to review and analyze strategic options for the airline. Top executives have said recently they are trying to determine whether consolidation makes sense for Delta.
When Anderson was named in August as Delta CEO to replace Gerald Grinstein, there was immediate speculation in the investment community that Delta and Northwest might eventually merge. Anderson is a former CEO of Northwest Airlines Corp.
Anderson immediately tried to dispel such speculation, telling Delta employees he wasn't coming to Delta to facilitate a deal with Eagan, Minn.-based Northwest.
Delta's statement Wednesday was responding to pressure by a hedge fund that owns 7 million Delta shares to consider combining with UAL.
Pardus Capital Management LP said in a letter to Delta's top management on Tuesday that it is "imperative" that the company undertake a merger transaction with another airline in view of soaring fuel prices and what it described as the increased risks of going it alone.
"Consolidation is needed to de-risk the industry and time is of the essence as now is the right regulatory environment," said Karim Samii, president of Pardus, and Shane Larson, a principal.
The hedge fund executives said they had determined since making a similar recommendation in a Sept. 7 letter that "the most attractive and practical combination would be a Delta and United Airlines combination."
It cited figures from a consulting firm estimating that the benefits of such a pairing would be about $585 million and said a combined Delta-United would boast a broader network than any other combination.
Pardus also owned 5.6 million shares in Chicago-based UAL as of Sept. 30.
Pardus executives said a Delta combination with Northwest would produce even bigger benefits of about $1.5 billion, primarily from combining the smallest hubs — Detroit/Cincinnati and Memphis/Atlanta.
"However, Northwest may not enable Delta to complete the breadth of network that business travelers require, resulting in the need for a potential follow-on transaction at a later date in order to achieve the same breadth of network that UAL would provide out of the box."
Pardus, citing information provided by the air transport consultancy Simat, Helliesen & Eichner Inc., said a third potential combination, with Continental Airlines, would produce no synergies and would raise other challenges.
Robert Mann, an airline consultant in Port Washington, N.Y., said United's broad Pacific network and Delta's huge Atlantic presence would complement each other. However, he said, combining fleet information systems and labor could pose challenges. The biggest problem would be that neither carrier has any recent track record of integration, he said.
"I would see this as a very risky move from the standpoint of the actual implementation," Mann
ATLANTA - UAL Corp.'s United Airlines and Delta Air Lines Inc. have been discussing a combination between the nation's second- and third-largest carriers that would keep the United name and the corporate headquarters in Chicago, The Associated Press has learned.
ADVERTISEMENT
Shares of both airlines surged on the news.
There is a sense of urgency in the talks, which have been going on for some time and continued as recently as a week or so ago, an official with knowledge of the talks said Wednesday. The official spoke on condition of anonymity because the person was not authorized to speak publicly.
"They want to get something done before a new administration gets in and so they get the clock ticking on" federal regulatory approval, the official said.
The exact financial details of the transaction being discussed are not clear. But the talks involve United being the name of the combined airlines, the headquarters staying in Chicago and Delta's Atlanta hub being an operational center for the two carriers, the official said. One possible scenario involves Delta CEO Richard Anderson being the chief of the combined airline, the official said.
Delta also has had talks with other airlines, the official said, without specifying which airline or the status of any such talks.
A spokesperson for Chicago-based United did not immediately return a call Wednesday seeking comment. Delta spokeswoman Betsy Talton declined to comment.
Shares of Delta rose $1.92, or 10.2 percent, to $20.67 in afternoon trading. UAL shares gained $4.20, or 9.7 percent, to $47.70.
Delta said in a statement Wednesday that its board has established a special committee to work with management to review and analyze strategic options for the airline. Top executives have said recently they are trying to determine whether consolidation makes sense for Delta.
When Anderson was named in August as Delta CEO to replace Gerald Grinstein, there was immediate speculation in the investment community that Delta and Northwest might eventually merge. Anderson is a former CEO of Northwest Airlines Corp.
Anderson immediately tried to dispel such speculation, telling Delta employees he wasn't coming to Delta to facilitate a deal with Eagan, Minn.-based Northwest.
Delta's statement Wednesday was responding to pressure by a hedge fund that owns 7 million Delta shares to consider combining with UAL.
Pardus Capital Management LP said in a letter to Delta's top management on Tuesday that it is "imperative" that the company undertake a merger transaction with another airline in view of soaring fuel prices and what it described as the increased risks of going it alone.
"Consolidation is needed to de-risk the industry and time is of the essence as now is the right regulatory environment," said Karim Samii, president of Pardus, and Shane Larson, a principal.
The hedge fund executives said they had determined since making a similar recommendation in a Sept. 7 letter that "the most attractive and practical combination would be a Delta and United Airlines combination."
It cited figures from a consulting firm estimating that the benefits of such a pairing would be about $585 million and said a combined Delta-United would boast a broader network than any other combination.
Pardus also owned 5.6 million shares in Chicago-based UAL as of Sept. 30.
Pardus executives said a Delta combination with Northwest would produce even bigger benefits of about $1.5 billion, primarily from combining the smallest hubs — Detroit/Cincinnati and Memphis/Atlanta.
"However, Northwest may not enable Delta to complete the breadth of network that business travelers require, resulting in the need for a potential follow-on transaction at a later date in order to achieve the same breadth of network that UAL would provide out of the box."
Pardus, citing information provided by the air transport consultancy Simat, Helliesen & Eichner Inc., said a third potential combination, with Continental Airlines, would produce no synergies and would raise other challenges.
Robert Mann, an airline consultant in Port Washington, N.Y., said United's broad Pacific network and Delta's huge Atlantic presence would complement each other. However, he said, combining fleet information systems and labor could pose challenges. The biggest problem would be that neither carrier has any recent track record of integration, he said.
"I would see this as a very risky move from the standpoint of the actual implementation," Mann
donttouchthebeauty
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NewHampshire Black Bears
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OK, beauty,..........I was on record with you, that it would be DL/NW because of Richard Anderson.(And It's still an outside shot, at this point)
However, It now(strongly) looks like it will be UA/DL, as you predicted, So.........take this post, as my admission (to you) that I was Wrong !!!
Having said THAT, when UAL was " #1 " a while back, I can remember Crandall saying..."so what, being #1 does'nt make them the most profitable. Crandall was right, because right around the time UA was # 1, along came your DREADED...ESOP !!(Thats assuming that you were with UAL, at that time)
I came around(the Industry) in 79', and I can Never remember UAL being a "mega concern" for AA, ...NEVER, and I don't see it happening once UA/DL goes down !
(I've always admitted to you UAL people, that Crandall(by his owen words) "blinked" on the PA/asian routes).
So yes, It's about to get Interesting.
Hey. who knows, maybe MY dream will come true,......An AA/NW "combo". (talk about raining on your parade)
One saying in this nutty Industry, that ALWAYS rings true;............."Time will tell" !!!!!
donttouchthebeauty
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
OK, beauty,..........I was on record with you, that it would be DL/NW because of Richard Anderson.(And It's still an outside shot, at this point)
However, It now(strongly) looks like it will be UA/DL, as you predicted, So.........take this post, as my admission (to you) that I was Wrong !!!
Having said THAT, when UAL was " #1 " a while back, I can remember Crandall saying..."so what, being #1 does'nt make them the most profitable. Crandall was right, because right around the time UA was # 1, along came your DREADED...ESOP !!(Thats assuming that you were with UAL, at that time)
I came around(the Industry) in 79', and I can Never remember UAL being a "mega concern" for AA, ...NEVER, and I don't see it happening once UA/DL goes down !
(I've always admitted to you UAL people, that Crandall(by his owen words) "blinked" on the PA/asian routes).
So yes, It's about to get Interesting.
Hey. who knows, maybe MY dream will come true,......An AA/NW "combo". (talk about raining on your parade)
One saying in this nutty Industry, that ALWAYS rings true;............."Time will tell" !!!!!
It is all speculation at this point NHBB, but if it does end up DAL-UAL and AA - NWA, (which I highly, highly doubt it) DAL and UAL will definitely be the strong point.. ORD, JFK, ATL, SFO, LAX, DEN, IAD, NRT, HKG, LHR, FRA - being the strong points and revenue makers - Especially ORD JFK ATL IAD SFO LAX.... AA and NWA strong points would be DTW, MSP, JFK, DFW, ORD, MIA, NRT, AMS... A UAL DAL combo has much higher revenue producing hubs than AA-NWA.. And a much more desirable route network.. But hey, you can have those Airbii, and the 747, and the 9er diners... One thing for sure, if it did happen, it sure wouldn't happen the way TWA did.. So rain away, I will never be envious of a fleet of 80s and 9s ..... could you picture it... nearly 500 of em.... LOL
AdAstraPerAspera
Veteran
What, exactly, is the "lagest" carrier, anyway?
Is this, perhaps, a reference to AA's BOS capacity? B)
Is this, perhaps, a reference to AA's BOS capacity? B)
T
The Goose
Guest
In one way, the TWA mess will be comical if another ill-advised combination happens.
Carty's background was in finance as is Arpey's. No business sense, but the numbers are OK. Crandall didn't care how big the airline was as long as it outperformed the others. That's the difference. Crandall was a SOB but he was the SOB that we needed on our side, not the waffling and gutless frat boys running the company now.
It's a shame the large institutional shareholders haven't the balls to put a stop to this idiocy. I guess they've been paid off handsomely.
donttouchthebeauty
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You got it - that one was for NHBB's - Glad you picked up on that, I was waiting for NHBB to say something.. LOL
eolesen
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No kidding....
Anecdotally, I've heard that Arpey was actually against the TW deal was brought to Exec Committee and the BOD.
Actually, the institutional shareholders probably want this type of idiocy. It's jut about the only sure way the stock price will rise and they can sell.
Goose,
Who do you think is driving this mess. Shareholders are demanding these actions. As for Carty & Arpey being Finance guys...what the heck do you think Crandal was? A BETTER FINANCE GUY! Let us not forge tthat he went and bought AirCal...how'd that investment go? Look at that huge West coast operation AA is running. I actually see AA looking at US if UA tries to go for DL. Add an East coast hub (again) with CLT. Add a Western hub (again) with PHX/LAS. I don't see UA & DL as a good fit though thus nothing will happen. CVG/SLC & possibly IAD would close which would lead to employee integration issues which tend to tear these things apart.
Who do you think is driving this mess. Shareholders are demanding these actions. As for Carty & Arpey being Finance guys...what the heck do you think Crandal was? A BETTER FINANCE GUY! Let us not forge tthat he went and bought AirCal...how'd that investment go? Look at that huge West coast operation AA is running. I actually see AA looking at US if UA tries to go for DL. Add an East coast hub (again) with CLT. Add a Western hub (again) with PHX/LAS. I don't see UA & DL as a good fit though thus nothing will happen. CVG/SLC & possibly IAD would close which would lead to employee integration issues which tend to tear these things apart.
