Delta's Still In Play

[USA320Pilot]

Delta's Still In Play

Forbes: But you heard it here first: Delta will be bought or merged with another airline once it emerges from bankruptcy, fueling the fires of industry consolidation.

Why? Delta simply can't make it on its own, despite assertions by Delta's CEO Gerald Grinstein that the carrier is better off a standalone.

See Story

Regards,

USA320Pilot

 

[LGA / 037]

How much weaker will Delta be after so much money was put into fending off the merger ?

 

[luv2fly]

How much weaker will Delta be after so much money was put into fending off the merger ?

Just how much did DL spend?

 

[PhxMama]

As I said on much earlier threads, I really thought the merger would happen. I was wrong. Having said that I still think it would have been good for each airline, in general, and good for the industry. Yes, with EVERY merger, airline industry or not, there are issues and it takes time to smooth it all out. Although, many of US preferred are fed up with the length of time it is taking for the HP/US merger completion, many have been thru mergers themselves and understand that it takes time to fully integrate. I have also said as a former HP employee with relatively low seniority, and now boarding DOH with US east employees, we would have been low man on the totem pole, so personally, I have have not gained at all. Also, word on the street was that one thing DP was willing to give up was PHX HQ, that it would move to ATL. True or not true? We'll never know or least not in the near future anyway. Even the analysts keep saying consolidation and mergers are needed for the airline industry to become profitable. So my question is what do you think needs to happen, do you think all the airlines can stand alone and make a profit or is everyone willing to keep wages stagnant so they keep the status quo as a stand alone carrier? You may not like DP but he is brilliant and although I think too much emotion kept something positive from happening, someday the "experts" may turn around and say DP was right and "if only..." The industry has been tough on employees and their families so lets just pray things get better for ALL airline employees. Regards, Mama

 

[delta777]

Delta's Still In Play

Forbes: But you heard it here first: Delta will be bought or merged with another airline once it emerges from bankruptcy, fueling the fires of industry consolidation.

Why? Delta simply can't make it on its own, despite assertions by Delta's CEO Gerald Grinstein that the carrier is better off a standalone.

See Story

Regards,

USA320Pilot

Is this not the same Forbes who originally pegged the LCC/DAL merger odds at 70/30? 'nuff said.

As for their comment that DAL "simply can't make it on their own." Really? Perhaps somebody should tell Forbes about these little gems,

DAL reduced costs and improved unit revenues, positioning the airline to emerge from Chapter 11 with the lowest unit costs of any network carrier. Delta has improved productivity and eliminated approximately $2 billion in annual costs. Ya' hear that, lowest unit cost of ANY network carrier. I guess if DAL runs into financial headwinds, so will everybody else.

DAL significantly reduced net debt from $17 billion to an anticipated $7.5 billion by the end of 2007. Sounds a whole lot better than the $24.5 billion a LCC/DAL combination would have had.

An expected consolidated equity value upon exiting Chapter 11 estimated by The Blackstone Group to be between $9.4 billion and $12 billion. Sounds good to me.

Improved liquidity position, totaling $2.6 billion in unrestricted cash, cash equivalents and short-term investments as of December 31, 2006. And what could be wrong with that?

A stronger, more balanced network as a result of rapid expansion of international routes with the highest profit potential. In the past year Delta has undertaken the largest international expansion in its history, and is a leader across the Atlantic with flights to 31 trans-Atlantic destinations. Can LCC make that statement?

Regards,

Delta777

 

[BoeingBoy]

As for their comment that DAL "simply can't make it on their own." Really?

Ya gotta remember that the author has a Masters in Journalism - making him qualified to write on any subject while knowing little about any.....

Jim

 

[NYCDelta]

Delta's Still In Play

Forbes: But you heard it here first: Delta will be bought or merged with another airline once it emerges from bankruptcy, fueling the fires of industry consolidation.

Why? Delta simply can't make it on its own, despite assertions by Delta's CEO Gerald Grinstein that the carrier is better off a standalone.

See Story

Regards,

USA320Pilot

The author also states it may be 3-5 YEARS before anything happens.

 

[longing4piedmont]

Ya gotta remember that the author has a Masters in Journalism - making him qualified to write on any subject while knowing little about any.....

Jim

B.O.B has a masters in Journalism? I didn't know that..... 😛

 

[LGA Fleet Service]

B.O.B has a masters in Journalism? I didn't know that.....

Is there anything he can't do?

 

[USA320Pilot]

LGA/037,

Delta is weaker because it spent an enormous amount of energy on the merger, spent a lot of money fighting off US Airways, and promised the creditors more money on their investment follwoing emergence. The POR and Disclosure Statement has a lot of holes in it, with one, the amount of money being paid to senior management in equity-based compensation. I wonder how the rank-and-file employees will feel when that is announced?

How much did it cost? I do not know, but in his State of the Airline webcast with US Airways employees last Tuesday Doug Parker indicated it was a "significant" number much less than nwhat US Airways spent.

In regard to an unbalanced route network, I would be careful about having too many widebody aircraft or international flying when the next industry "shock event" event occurs and peopel refuse to fly out of the continental U.S.

In the end, I believe a profitable company is the best defense against "shock" events and it provides the best job security and pay, which is whyy I believe the proposed US Airways - Delta merger should have proceeded.

Now that it is over, I believe US Airways should contact Northwest about merging while the Eagain-based company is still in it formal reorganization. If the parties can come to an amicable agreement then I think the new business enterpirse could become a powerhouse.

If the two companies merge, they would have an enormous cost benefit over AA, UA, DL, & CO, who would have no option but to merge to try to close the gap on US/NW, but they would do it without the flexibility of one company being in bankruptcy. Personally, I believe this whole thing with Delta could place US Airways in an enviable position with Delta becoming the weakest legacy carrier.

Regards,

USA320Pilot

 

[az_wild727]

LGA/037,

Delta is weaker because it spent an enormous amount of energy on the merger, spent a lot of money fighting off US Airways, and promised the creditors more money on their investment follwoing emergence. The POR and Disclosure Statement has a lot of holes in it, with one, the amount of money being paid to senior management in equity-based compensation. I wonder how the rank-and-file employees will feel when that is announced?

How much did it cost? I do not know, but in his State of the Airline webcast with US Airways employees last Tuesday Doug Parker indicated it was a "significant" number much less than nwhat US Airways spent.

In regard to an unbalanced route network, I would be careful about having too many widebody aircraft or international flying when the next industry "shock event" event occurs and peopel refuse to fly out of the continental U.S.

In the end, I believe a profitable company is the best defense against "shock" events and it provides the best job security and pay, which is whyy I believe the proposed US Airways - Delta merger should have proceeded.

Now that it is over, I believe US Airways should contact Northwest about merging while the Eagain-based company is still in it formal reorganization. If the parties can come to an amicable agreement then I think the new business enterpirse could become a powerhouse.

If the two companies merge, they would have an enormous cost benefit over AA, UA, DL, & CO, who would have no option but to merge to try to close the gap on US/NW, but they would do it without the flexibility of one company being in bankruptcy. Personally, I believe this whole thing with Delta could place US Airways in an enviable position with Delta becoming the weakest legacy carrier.

Regards,

USA320Pilot

That I must say was a very good post to read.

Honestly, I think that US may as well offer NW a merger, and this one, I think,would happen.

I do however wonder. If US merged w/ NW, I wonder which brand would remain. Apparently, NW has a worser reputation, and the employees wouldn't mind the merger. They have essentially said that. US/NW would create a very stable airline and the DOJ would approve it much quicker. No need to dump Shuttles or any Europe routes. The only gap w/ the US/NW merger would be South America and Africa of course, but Asia would get a Toky-Narita Hub which would work.

Now, given the US/NW merger I assume that UA would definately want us gone due to the major Asia competitions. OH, and I hope the new airline would keep the IFE unlike NWA which has no domestic IFE. I still havent figured out why yet?

 

[longing4piedmont]

LGA/037,

Personally, I believe this whole thing with Delta could place US Airways in an enviable position with Delta becoming the weakest legacy carrier.

Regards,

USA320Pilot

And given your past track record here, then DL has nothing but "clear skies ahead" and will be a force you will have to deal with on another day. This time there will be no HP to purchase you and save you. Doogie has awaken a sleeping giant and he is mad. I would be very, very afraid.....

Interesting that you have not posted about the rumor that Mesa may make a tender offer for US..... Can you spell barbie jet?

 

[UWCactus]

I think it is tough for the legacy carriers to operate within the cost mindset of the LCC and Doug Parker.

The advantage that US has is that Parker and his team are young visionaries, unafraid to take risks, while realizing the need to remain low cost in operating. Legacy senior management are still grasping with higher cost luxuries that they are unwilling to let go of to become the cost efficient machine they must be. They all have the advantage of a broader route network with the ability to really bring in the revenue, however if they only had the "mindset" of operating such as LCC they would bank.

 

[delta777]

LGA/037,

Delta is weaker because it spent an enormous amount of energy on the merger, spent a lot of money fighting off US Airways, and promised the creditors more money on their investment follwoing emergence. The POR and Disclosure Statement has a lot of holes in it, with one, the amount of money being paid to senior management in equity-based compensation. I wonder how the rank-and-file employees will feel when that is announced?

How much did it cost? I do not know, but in his State of the Airline webcast with US Airways employees last Tuesday Doug Parker indicated it was a "significant" number much less than nwhat US Airways spent.

In regard to an unbalanced route network, I would be careful about having too many widebody aircraft or international flying when the next industry "shock event" event occurs and peopel refuse to fly out of the continental U.S.

In the end, I believe a profitable company is the best defense against "shock" events and it provides the best job security and pay, which is whyy I believe the proposed US Airways - Delta merger should have proceeded.

Now that it is over, I believe US Airways should contact Northwest about merging while the Eagain-based company is still in it formal reorganization. If the parties can come to an amicable agreement then I think the new business enterpirse could become a powerhouse.

If the two companies merge, they would have an enormous cost benefit over AA, UA, DL, & CO, who would have no option but to merge to try to close the gap on US/NW, but they would do it without the flexibility of one company being in bankruptcy. Personally, I believe this whole thing with Delta could place US Airways in an enviable position with Delta becoming the weakest legacy carrier.

Regards,

USA320Pilot

Wow, you know DAL spent an enormous amount of money and energy on defeating the hostile takeover, you just don't know how much. Thanks for the detailed breakdown.

You claim the POR and Disclosure Statement has a lot of holes in it, yet fail to present even one factual bit of information on said claim. Alrighty then...

Then you talk about an event that hasn't happened yet that will affect International travel. "future shock" was the term i believe you used. Hence the reason LCC has such a miniscule widebody fleet. Wow, we have a regular Nostradamus on our hands!!!

But i love this comment best,

"Personally, I believe this whole thing with Delta could place US Airways in an enviable position with Delta becoming the weakest legacy carrier."

Again, basing your comments on events that haven't happened. Unreal.

 

[BoeingBoy]

USCactus,

Is all that "vision" and "talent" responsible for LCC still having the highest cost structure in the industry? It's a shame that the legacy "mindset" of the competition has given them lower costs than US while offering a better product, according to some.....

Jim