Delta Breakup Possible

[ralphcramden]

From Crain's Chicago Business:

http://www.chicagobusiness.com/cgi-bin/news.pl?id=22891

The most interesting paragraph reads as follows:

<<<William Swelbar, research engineer in the Global Airline Industry Program at the Massachusetts Institute of Technology, adds that United might be a potential buyer for one of the East Coast shuttle services that both US Airways and Delta operate, which US Airways says it would divest. United may even be in the position of making a counteroffer for some of Delta’s assets if creditors see the bid as less valuable than a breakup of the airline.>>>

This is the scenario that is known to all the players but never mentioned. Southwest, United, Airtran and other entities all get on board the train, making offers for various parts. Parker will welcome them with open arms.

Goodbye anti-trust problems, goodbye creditor resistance, hello "Real New Delta." Delta would lose control of the process faster than you could say, "World Traveler is a genius!!"

The train she is a comin', she's rollin' down the track...

 

[aislehopper]

They say that breaking up is hard to do.

 

[luv2fly]

The train she is a comin', she's rollin' down the track...

... and ralphcramden is a smokinnnn' crack....

 

[Singleflyer]

Ralph might be right.

Think about it, this eliminates on competitor, Parker will cherry pick what he wants from the operation, and other gain valuable assets.

US picks up more international routes and wide bodies. They could get a much needed mid western hub, and a stronger east coast network.

Also, if a break up happens it is possible the Delta name could go away.

This could be like the break up of Pan Am.

 

[BottomFeeder]

Ralph might be right.

Think about it, this eliminates on competitor, Parker will cherry pick what he wants from the operation, and other gain valuable assets.

US picks up more international routes and wide bodies. They could get a much needed mid western hub, and a stronger east coast network.

Also, if a break up happens it is possible the Delta name could go away.

This could be like the break up of Pan Am.

A little twist of irony here. Delta picked up the Atlantic routes from PanAm. Then Delta backed away from PanAm and watched her go down.

 

[flyhigh]

I'd believe it if the guy who wrote the article in Crain's sounded like he knew any history of the Delta/US asset base. United isn't very strong in the NE, to the point of selling their LGW route authority to DL at JFK. If I remember correctly, they also moved their NRT flt to IAD. Their LGA-ORD flights are strong because of the Chicago side, not NYC. AA has that portion of the business over UA. Additionally, AA has money and has bid on that assett before. I think UA might prefer to go after the CLT hub, but so would CO and AA making a bid to see where ti gets them.

 

[NewHampshire Black Bears]

For those of you, who like to bet on a sure thing(should one of the shuttles become available), BET HEAVILY, that AA will prevail in a potential bidding war, for said shuttle !!!!!!!!!


NH/BB's

 

[BottomFeeder]

For those of you, who like to bet on a sure thing(should one of the shuttles become available), BET HEAVILY, that AA will prevail in a potential bidding war, for said shuttle !!!!!!!!!
NH/BB's

AA already runs a shuttle with Eagle. Why would they need to go after somthing they already have?

 

[jimntx]

AA already runs a shuttle with Eagle. Why would they need to go after somthing they already have?

I don't think you can compare the revenue generated by AE with the revenue generated by the shuttles operated by US and DL.

 

[hp_fa]

I wonder about the speculation regarding WN and the Shuttle. If WN were interested and were to prevail in any auction I wonder if there would be any resistence by passengers to fly WN's version of a Shuttle. The argument would be that WN is in place and providing that service, but would the typical Shuttle passenger embrace WN or go looking for the train?

My bet, if I had to make one, is that AA would prevail after paying a high price for the Shuttle and make the question moot.

There is also another possibility that leads to the Shuttle being divested. Suppose DL sweetens it's offers to creditors and gets their plan accepted and then sells the Shuttle as a means of raising cash that can be used to pay down the debt incurred in sweetening it's offers to creditors and making itself stronger then it would have been had it prevailed as staying a stand-alone carrier, but weaker then it had expected because of the higher price it had to pay because of the US Airways offer.

 

[RowUnderDCA]

The Shuttles are just gates, slots and planes... probably not even employees... maybe not planes... maybe not gates.

 

[flyhigh]

...it's a little more than just physical assets. As a matter of fact, the buyer might likely not want the US or DL planes on the routes. The Shuttle is more of an operational capability. By that, I'm referring to rolling call signs. Ask a pilot about the specifics, but that is what allows the shuttle to run as smoothe (relatively) as it does. It's something only US & DL can use there and is justified by the FAA because those are the only two airlines who have invested in a product specific to those markets that is branded as such. That's pretty much what you buy. The key issue with the Shuttle is that while it is important to some carriers, the majority of passengers are not loyalists. A lot of them only use the shuttle. There will always be a portion that use the whole system.

I think US would be smart to put an option out there for one or the other. If you want the US shuttle the price is X. For the Delta Shuttle, which includes the marine air terminal, it's 2X.