WorldTraveler
Corn Field
- Joined
- Dec 5, 2003
- Messages
- 21,709
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Creditors can't overrule the DOJ which will undoubtedly tie DL/US up for years.... and if the creditors force DL to go with US, the rest of the industry will consolidate. If the creditors calculate wrong, then they have left DL as the smallest of the network airlines - other than US which will probably end up in BK again anyway (notice that US' load factor is the lowest in the industry these days despite pulling down capacity - the US plan is just not working the way Dougie thought it would).
NW is one of the weaker carriers from a network perspective as well. Given that UA and CO seem to prefer each other, NW faces the prospect of being acquired by AA who will probably tear them up into pieces and then spit them out (if they can get a deal past DOJ given that AA/NW have FOUR midwest hubs). DL and NW will manage to work things out since both have mgmt teams that have managed to dramatically turn their respective carriers around.
The DL creditors may be enthralled at the idea of all that cash - but it will come at the expense of the viability of US/DL in the future. Some creditors may care less about the future of US/DL or the industry but other creditors very much do..... and of course the government sure cares.
DL mgmt hasn't raised their offer because they know it would be far better for the industry, the government, and the creditors for DL to emerge independently and then merge shortly thereafter (both carriers could finalize their lease negotiations based on a pending merger).
US faces the daunting hurdle trying to push a hostile takeover in an industry where there has NEVER been a successful hostile takeover. US also faces the most intense government review an airline merger has ever faced and all the indications are that the government would strip so much from the combined airline that US/DL would be left with little more than the socks they are wearing.
US is pursuing DL purely because its own merger strategy w/ HP is failing and it desperately needs to eliminate a competitor and gain access to the top east coast markets in order to make it. It is undoubtedly true that Parker could have set off industry consolidation but US could be left alone after the rest of the industry consolidates. US will be left with small hubs compared with other carriers that are not only not geographically positioned to capture the bulk of east-west connecting traffic but also are infested by competition.
DL's creditors will make the right decision - if for no other reason because the government will "help" them decide.
NW is one of the weaker carriers from a network perspective as well. Given that UA and CO seem to prefer each other, NW faces the prospect of being acquired by AA who will probably tear them up into pieces and then spit them out (if they can get a deal past DOJ given that AA/NW have FOUR midwest hubs). DL and NW will manage to work things out since both have mgmt teams that have managed to dramatically turn their respective carriers around.
The DL creditors may be enthralled at the idea of all that cash - but it will come at the expense of the viability of US/DL in the future. Some creditors may care less about the future of US/DL or the industry but other creditors very much do..... and of course the government sure cares.
DL mgmt hasn't raised their offer because they know it would be far better for the industry, the government, and the creditors for DL to emerge independently and then merge shortly thereafter (both carriers could finalize their lease negotiations based on a pending merger).
US faces the daunting hurdle trying to push a hostile takeover in an industry where there has NEVER been a successful hostile takeover. US also faces the most intense government review an airline merger has ever faced and all the indications are that the government would strip so much from the combined airline that US/DL would be left with little more than the socks they are wearing.
US is pursuing DL purely because its own merger strategy w/ HP is failing and it desperately needs to eliminate a competitor and gain access to the top east coast markets in order to make it. It is undoubtedly true that Parker could have set off industry consolidation but US could be left alone after the rest of the industry consolidates. US will be left with small hubs compared with other carriers that are not only not geographically positioned to capture the bulk of east-west connecting traffic but also are infested by competition.
DL's creditors will make the right decision - if for no other reason because the government will "help" them decide.
