can Delta hold off U
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Flying Titan
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Delta's in no position to buyout anyone. It's still in bankruptcy. Realistically, the only way a merger w/ NWA could happen is if a third party came in and merged the two together.
nyc6035
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Could this be the opportunity for the 'Lord of Mount Kisco' to re-emerge in the industry?
Could Ual be interested?
United Airlines parent UAL Corp. may not have made the first move in the long-anticipated consolidation in the U.S. airline industry, but it is likely to be a major player in the process.
"The industrial logic of mergers in the airline industry is so compelling," Jake Brace, UAL's chief financial officer, said at a Citigroup investor conference on Wednesday.
"We believe mergers in the airline industry have significant synergies, and we believe the industry needs to consolidate," Brace said.
The comments came after US Airways Group Inc. made an $8 billion offer for larger, bankrupt rival Delta Air Lines Inc. The offer is expected to spur counter offers or new combinations, kicking off a consolidation race.
Analysts see United Airlines as the better partner and likeliest counter bidder for Delta, but the airline was coy about its plans.
story here
United Airlines parent UAL Corp. may not have made the first move in the long-anticipated consolidation in the U.S. airline industry, but it is likely to be a major player in the process.
"The industrial logic of mergers in the airline industry is so compelling," Jake Brace, UAL's chief financial officer, said at a Citigroup investor conference on Wednesday.
"We believe mergers in the airline industry have significant synergies, and we believe the industry needs to consolidate," Brace said.
The comments came after US Airways Group Inc. made an $8 billion offer for larger, bankrupt rival Delta Air Lines Inc. The offer is expected to spur counter offers or new combinations, kicking off a consolidation race.
Analysts see United Airlines as the better partner and likeliest counter bidder for Delta, but the airline was coy about its plans.
story here
LGA Fleet Service
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And do what? "His Highness" is busy with other things, airlines aren't making money which is his sole motivation for doing anything.
Bloomberg.com
Reuters
Autoindustry-UK
Not to mention his recent purchase of a 1% stake in Hilton Hotels, his bid with Macklowe Properties for Reckson Associates Realty Corp and the ongoing festivities at ImClone.
If he was going to loot and pillage in the business like he has in the past he would have been in in '02 or '03 when they were at their weakest.
Delta is in bankruptcy and now in play.
They are going to either be merged wholly or broken up and sold in pieces.
Isn't it interesting that an airline whose sole recovery plan was based on putting another company out of business is now being undone by that other company? Ironic...
They are going to either be merged wholly or broken up and sold in pieces.
Isn't it interesting that an airline whose sole recovery plan was based on putting another company out of business is now being undone by that other company? Ironic...
WorldTraveler
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Any combination between network carriers is predicated on removing capacity from the aviation system because any two network carriers have
at least some overlap if only on a regional basis. Customers are
seeing higher prices than they've seen in years, so they don't see a need for consolidation which will result in less capacity and higher fares. Governments and municipalities are seeing less service to medium and small cities so they aren't interested in losing any more.
Employees have already taken hits with reduced fleets so they aren't interested in reduced schedules and fleets that will result in more layoffs. The airline industry is marginally profitable which is as good as it has ever been. The airline industry is not broken.
There is no need for any combinations of any airlines, especially among airlines that don't want to combine such as Delta.
Unwanted and unnecessary combinations in the airline industry will only result in reduced service and higher fares.
Let's stop the talk among those who say there is a NEED for airlines to merge right now. Airline mergers only benefit a handful of dealmakers
at the expense of the rest of the public.
at least some overlap if only on a regional basis. Customers are
seeing higher prices than they've seen in years, so they don't see a need for consolidation which will result in less capacity and higher fares. Governments and municipalities are seeing less service to medium and small cities so they aren't interested in losing any more.
Employees have already taken hits with reduced fleets so they aren't interested in reduced schedules and fleets that will result in more layoffs. The airline industry is marginally profitable which is as good as it has ever been. The airline industry is not broken.
There is no need for any combinations of any airlines, especially among airlines that don't want to combine such as Delta.
Unwanted and unnecessary combinations in the airline industry will only result in reduced service and higher fares.
Let's stop the talk among those who say there is a NEED for airlines to merge right now. Airline mergers only benefit a handful of dealmakers
at the expense of the rest of the public.
luv2fly
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You left one out partner. DL presents a viable and fair plan by mid February and the judge approves it. DL exits BK as a stand alone carrier and the DL BOD tells Parker to take a hike.
I love the part of the announcement yesterday about becoming the largest carrier across the Atlantic. I guess if you can't beat them,... buy them.
WorldTraveler
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yes, luv. all of the attributes US mentioned, DL already does. The number of cities served is smaller but not by much.
The DOT will shoot this down so fast. Washington and DL are just getting warmed up. Parker will look like the baffoon that he is. US will have to learn to run an airline for the long term - somethign they have obviously still can't do. Anyone can keep cutting capacity and create monopolies to prop up profitability. It takes real mgmt to make money and still have competitors.
The DOT will shoot this down so fast. Washington and DL are just getting warmed up. Parker will look like the baffoon that he is. US will have to learn to run an airline for the long term - somethign they have obviously still can't do. Anyone can keep cutting capacity and create monopolies to prop up profitability. It takes real mgmt to make money and still have competitors.
I guess I beg to differ with you a little. The airline industry has become marginally profitable but at what expense? or should I say whose? You may also not care for Doug Parker but he is far from a baffoon. And I hope you are not speaking of Deltas management when you say "it takes real mgmt to make money", or does "bankrupcy" have a new meaning? Only time will tell how this shakes out but if I know anything about DP he's dotted his eyes and crossed his t's and Delta employees should be prepared for the "New" Delta. If this merger does not happen at least its been one he** of a ride. My best to all the employees of Delta and US Airways. Hold on tight! Regards, Mama
World,
Why was a merger/acquisition a good idea when it involved DL buying someone or pieces of someone and is now suddenly the worst idea ever?
As for Parker being a bafoon? Based on what? No merger is smooth as silk, but US/HP has been pretty good overall and made tremendous sense.
As for DL presenting a plan that is standalone that the court approves...there's a couple problems with that statement. First, the decision isn't solely up to the judge. Here's what a friend who works on bankruptcy law explained to me...I'm sure we can all find an attorney who can offer a different spin, so let's not argue that please. I'm assuming that this opinion is largely correct. If there is something completely off base, let's discuss that. Otherwise, it seems that the creditors could keep voting DL's plan down until it matches what US is willing to pay them or allows US (or someone else) to take over.
"Even if the plan is viable it must be voted on by the creditors not just approved by the court. That being said, even if Delta proposes a plan, if they cannot get the majority of creditors in each creditor class to approve the plan- which could likely happen if USAirways comes in with a 'better deal' for the creditors. Although you
can "cram down" various non-consenting classes of creditors, the
standard is very difficult in a case as large as Delta b/c each class
that is being crammed down must receive as much as the other classes,
which as you know usually doesn't happen."
Why was a merger/acquisition a good idea when it involved DL buying someone or pieces of someone and is now suddenly the worst idea ever?
As for Parker being a bafoon? Based on what? No merger is smooth as silk, but US/HP has been pretty good overall and made tremendous sense.
As for DL presenting a plan that is standalone that the court approves...there's a couple problems with that statement. First, the decision isn't solely up to the judge. Here's what a friend who works on bankruptcy law explained to me...I'm sure we can all find an attorney who can offer a different spin, so let's not argue that please. I'm assuming that this opinion is largely correct. If there is something completely off base, let's discuss that. Otherwise, it seems that the creditors could keep voting DL's plan down until it matches what US is willing to pay them or allows US (or someone else) to take over.
"Even if the plan is viable it must be voted on by the creditors not just approved by the court. That being said, even if Delta proposes a plan, if they cannot get the majority of creditors in each creditor class to approve the plan- which could likely happen if USAirways comes in with a 'better deal' for the creditors. Although you
can "cram down" various non-consenting classes of creditors, the
standard is very difficult in a case as large as Delta b/c each class
that is being crammed down must receive as much as the other classes,
which as you know usually doesn't happen."
luv2fly
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Gilding the Lily
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Generally speaking, you are mostly correct with that analysis. However, the part about "each class
that is being crammed down must receive as much as the other classes" is not entirely accurate.
First, we need to be clear that every secured creditor is usually placed into their own class, while unsecured creditors are usually lumped together into one large class. Each class of creditors and equityholders whose rights are modified or "impaired" has a right to vote for or against the plan. If a class votes against the plan, then cram down on the class is necessary if the plan is to be confirmed.
In order to cram down a secured class, the plan must not "discriminate unfairly" and must be "fair and equitable." This should be distinguished from what you call "receiving as much as the other class," as that is not required under the bankruptcy code. Perhaps I am being nit-picky, but I think it is a very important distinction.
Basically, "fair and equitable" means that the creditors should receive deferred payments that come from the sale of the collateral or the equivalent of a sale of the collateral.
As for the unsecured creditors, in order for a plan to be crammed down their throat, they must be paid atleast the same amount as they would receive under liquidation.
Perhaps that was what you were attempting to say; but I just want us to be on the same page.
It could be that the creditors and U have already come to some sort of agreement. These things just don't happen over night. It seems that Citycorp has jumped in awfully quick. I don't believe they would have announced this if they didn't already have their ducks in a row. These finace companies have taken a real beating in this industry and this deal would at least regain some of the loss of the DL BK. The End
Luv,
They may view it as questionable, but that is less likely since, as has been mentioned, Citi has already agreed to provide financing. Given that, it would seem they've already done their due dillegence. In addition, come Feb 15, the creditors will have a secondary plan in place to request the judge not extend DL's exclusivity should they request it. If they don't request it, they'd have to be coming in with something that brings some additional value over what is typical for creditors in exit situations. Announcing this offer now leaves DL little time to amend the plan they've been putting in place thus the likely need to request an extension.
This is certainly making the situation/process far more interesting.
Gilding, I understand your point. Could be semantics...I'm not sure. As I mentioned, that reply was provided as a response through a simple e-mail exchange. Who knows, we may all learn something out of this potential transaction!
They may view it as questionable, but that is less likely since, as has been mentioned, Citi has already agreed to provide financing. Given that, it would seem they've already done their due dillegence. In addition, come Feb 15, the creditors will have a secondary plan in place to request the judge not extend DL's exclusivity should they request it. If they don't request it, they'd have to be coming in with something that brings some additional value over what is typical for creditors in exit situations. Announcing this offer now leaves DL little time to amend the plan they've been putting in place thus the likely need to request an extension.
This is certainly making the situation/process far more interesting.
Gilding, I understand your point. Could be semantics...I'm not sure. As I mentioned, that reply was provided as a response through a simple e-mail exchange. Who knows, we may all learn something out of this potential transaction!
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