Are you Sitting Down?
- Thread starter Fly4Free
- Start date
Well we can discuss how this relates to UA.
US could be gone from Star. Or a larger airline could be a part of Star. But only if UA approves.
Part of me thinks UA was interested in DL and Parker is trying to drive up the price...
US could be gone from Star. Or a larger airline could be a part of Star. But only if UA approves.
Part of me thinks UA was interested in DL and Parker is trying to drive up the price...
Ridiculous! They will simply run up huge debt, declare BK and leave others holding empty bags while the execs pocket millions.
Better article:
http://chicagobusiness.com/cgi-bin/news.pl?id=22891
And even Mad Money's Jim Kramer says UAUA is a buy:
http://www.bloggingstocks.com/2006/11/15/c...rs-buy-ual-nmx/
story here
The coming weeks will tell more. UAL is a better match with Delta. Once again UAL world largest.
The coming weeks will tell more. UAL is a better match with Delta. Once again UAL world largest.
Why do people think UA is a better match. I can see both sides, but I'm inclined to think DL/UA is not better than DL/US. Here's my thinking. For UA, DL has a strong hub, and overall franchise, where UA is weak - the East coast. Conversely, DL's CVG & SLC hubs are both weaker than UA's hubs in those respective regions. The big synergy for UA is better Latin/Atlantic position vs. DL's improved Asia presence.
With a tie up to US, DL still strengthens their West coast presence and get a great NE hub (PHL). I guess you could say the international aspect that UA brings to the table is why it's a better fit, but that's debateable as Intl is a roller coaster with diminishing returns as the market is flooded...
With a tie up to US, DL still strengthens their West coast presence and get a great NE hub (PHL). I guess you could say the international aspect that UA brings to the table is why it's a better fit, but that's debateable as Intl is a roller coaster with diminishing returns as the market is flooded...
Barbell
Senior
- Nov 16, 2005
- 335
- 0
UA gets a lot of revenue from domestic ops, but a big chunk of the profit comes from int'l.
This announcement is not good news for United. I think that you may possibly see United counter-offer for Delta. Why? Simple. A merger with Continental cannot be easily consummated due to the "golden share" provision that Northwest has over Continental. Are there ways around that? Yes, but it's tricky. And with Continental not being a bankrupt carrier, it would be difficult to right-size the merged carrier and shed inefficient fleets, facilities, and excess employees. That makes a merger much more expensive and difficult to fully accomplish. I don't think United can afford to let US Airways merge with Delta. It would push them down in the pecking order. And the loss of US Airways from the STAR Alliance would cost United A LOT of revenue (even though it's not a foregone conclusion that a combined US/DL would leave STAR, but I consider it likely).
First let me say that I am not in favor of mergers because of the havoc they wreak on front-line employees, who are always the ones left standing when the music stops. But, I'll be honest in saying that in the long-term, consolidation is going to happen in the industry. It's only a question of who fires the first shot. And this could very well be that shot. We all know that this is an industry ruled by executives who are not known for fiscal restraint and sound economic decisions. If this US/DL merger goes forward and US is successful in convincing Delta's creditors and shareholders that this is a favorable deal to them, it will cause panic among the rest of the industry. I'm quite sure NW is already talking with SOMEONE. My guess would be either Continental or American. United knows this. If US succeeds in acquiring Delta, and then another competitor makes a move for NW, that will leave United very vulnerable.
So, based upon that, and the much-stated quest of current UA Senior Management to merge with SOMEONE, I would expect either a counter-offer for Delta as a whole, or for certain strategic assets.
First let me say that I am not in favor of mergers because of the havoc they wreak on front-line employees, who are always the ones left standing when the music stops. But, I'll be honest in saying that in the long-term, consolidation is going to happen in the industry. It's only a question of who fires the first shot. And this could very well be that shot. We all know that this is an industry ruled by executives who are not known for fiscal restraint and sound economic decisions. If this US/DL merger goes forward and US is successful in convincing Delta's creditors and shareholders that this is a favorable deal to them, it will cause panic among the rest of the industry. I'm quite sure NW is already talking with SOMEONE. My guess would be either Continental or American. United knows this. If US succeeds in acquiring Delta, and then another competitor makes a move for NW, that will leave United very vulnerable.
So, based upon that, and the much-stated quest of current UA Senior Management to merge with SOMEONE, I would expect either a counter-offer for Delta as a whole, or for certain strategic assets.
I also think US/DL would leave Star. But then SkyTeam, absent any other consolidation, will be way too big with US carriers. I see CO bailing on SkyTeam (they're left out of anti-trust immunity with AF/KL anyway) and coming to Star. Net gain for UA and Star.
I too agree that UA may counter offer, and as I said earlier, this might have been a pre-emptive offer to drive the price up. Perhaps the end-game for US isn't DL.
Longshot, I know, but what is the likelyhood that UAL makes an offer for...sit down, please 
US Airways?
Both Delta and US Airways would complement UAL well, with the smaller US Airways be of less concern for DOJ.
$100/share=$8.0B (roughly), and maybe this is/was the end-game...?!
SoftLanding
US Airways?Both Delta and US Airways would complement UAL well, with the smaller US Airways be of less concern for DOJ.
$100/share=$8.0B (roughly), and maybe this is/was the end-game...?!
SoftLanding
bigJ,
Int'l is great now, but wasn't as good when the Japanesse economy was in the tank or during SARS or just after 9/11 or recently with the scare in London. Additionally, history has shown that airlines flood the int'l mkt when domestic is back and swing back and forth because that flooding hurts the market overall. UA has had the advantage of a lack of pacific competition for quite some time, however, that is and will continue to shrink.
Barbell,
PHL has a good local traffic base, and can be modified to run smoother...
Int'l is great now, but wasn't as good when the Japanesse economy was in the tank or during SARS or just after 9/11 or recently with the scare in London. Additionally, history has shown that airlines flood the int'l mkt when domestic is back and swing back and forth because that flooding hurts the market overall. UA has had the advantage of a lack of pacific competition for quite some time, however, that is and will continue to shrink.
Barbell,
PHL has a good local traffic base, and can be modified to run smoother...
Has anyone considered that US made the move on Delta to get UA to make a counter move......be a White Knight and force Delta's hand? All said and done, if UA and Delta merged, US could in turn go after NWA (also wearing the Scarlet "B"). The end result would be the coveted Asian routes stay with the cozy bosoom buddies of the STAR ALLIANCE. There is a helluva lot yet to be told and this should get VERY INTERESTING.
That would be a large and very expensive gamble. I think they really want Delta. With such fleet and engine incompatibility.
