DL Might Spark Merger Mania

[chucky]

Delta Might Spark Merger Mania

By Ted Reed
TheStreet.com Staff Reporter
11/13/2007 5:59 AM EST




CHARLOTTE, N.C. -- Airline industry consolidation has moved a step closer to reality, now that Delta (DAL - Cramer's Take - Stockpickr) has made clear that it wants to be a player.
"We do believe the right transaction, certainly for Delta, would add tremendous value," Ed Bastian, the carrier's president, declared last week, as he discussed mergers at a Wall Street investor conference. "We're looking at the question [in] real time. It's a front burner issue for us."

Bastian also said, "Delta views itself an acquirer, not a seller." In tone, he went beyond statements made last month by Delta's new CEO Richard Anderson, who said, on his first earnings call, that the carrier is open to a deal.

With Delta in, three of the six legacy carriers are now publicly committed to pursuing merger possibilities. US Airways (LCC - Cramer's Take - Stockpickr - Rating) CEO Doug Parker, one of two leading advocates for consolidation, has presided over a merger between US Airways and America West, as well as a failed bid for Delta.




Story

 

[NewHampshire Black Bears]

This is the first(I believe) article to mention "Political" as part of consolidation(s), which I Interpret to mean, that This(LONG OVERDUE) scenario WILL happen(MUCH sooner, rather than later !!

This much we(all) know.

Nobody wants anything to do with LLC...............(NO disrespect meant....LCC employees) !!

AA/CO...............99%..Not Interested !!

So that leaves DL(obviously)...and UA, and NW.

I could see NW "MANAGEMENT" willing to prostitute the company, BUT, (and it's a BIG but), the employees DEFINITELY aren't Interested in being "acquired" !!!!!!!!!!!!

So , obviously DL/UAL is left.
But (to me), I just can't comprehend the UNITED name going away.

???????????????

 

[brokenwrench]

From another BB.

As a former Northwest employee, I think this is the best thing that could have happened to Delta. Richard was held in high regard by almost all at NWA (including labor unions), and was starting to really make a difference to how NWA ran its business in the short time he was CEO (I remember a speech he gave to employees where he reminded us that the airline exists to serve the customer, and not the other way around, and how NWA had to change its culture from one where we did everything from the point of view of convenience for the operation with customers being considered irrelevant, to one that made operational decisions for the benefit of customers who paid our salaries. A lesson that many airlines still need to learn, it seems, seeing the continuing trend of airlines holding customers hostage onboard aircraft during lengthy delays). He also issued a memo urging NWA senior management to travel coach class when on company business so that they experienced what customers experienced -- Richard himself always travelled coach. This did not make him popular with some of the "old world" senior managers!

When he quit NWA (disagreement with the board on philosophical issues), it was a sad day for NWA. I was personally crushingly disappointed. The current CEO, who I have observed (before he became CEO) not budging from his seat in WBC and avoiding eye contact with employees and customers alike, does not hold a candle to Richard Anderson.

Good for Delta. A loss for NWA. Richard, here's wishing you the very best at Delta.

 

[North by Northwest]

From another BB.

Trust me, between the two, we got cheated BIG TIME!

There is NOTHING DS could ever do that would turn NW employees around....except LEAVE!

 

[North by Northwest]

dupe

 

[brokenwrench]

That is my point. I think the NW people would welcome a merger if the current NW mangement left.
JMO.

 

[North by Northwest]

With OPEN ARMS.

 

[Art at ISP]

Do you really think NW would welcome a combination with LCC if LCC management were in charge? I think not.....

Although based on other rumors I have heard, NW and LCC is defitnely on the table, and would be more likely if DL and UA combine.

 

[1 VF-1 2NV]

FALSE ALARM

 

[LukeAisleWalker]

FALSE ALARM

What else is Anderson going to do?? OF COURSE he's going to deny it.
And the 500lb Gorilla in the room, folks is $$oil! I've watched some of the talking head shows today (CNBC) and they have YET to mention that what's spurring this is the high price of oil. They're chatting on camera about airline mergers like oil is $60 barrel. And like you, they have poo-poo'd it 'cause Anderson issued a denial. My doubts have nothing to do with who said what but with the realities of regulatory approval. There is no way DOJ would approve the combo, regardless of whether it's a Repub or Dem Admin. The only way, would be with a slashing of hubs, routes, etc...which unfortunately, would necessitate job losses.

 

[donttouchthebeauty]

What else is Anderson going to do?? OF COURSE he's going to deny it.
And the 500lb Gorilla in the room, folks is $$oil! I've watched some of the talking head shows today (CNBC) and they have YET to mention that what's spurring this is the high price of oil. They're chatting on camera about airline mergers like oil is $60 barrel. And like you, they have poo-poo'd it 'cause Anderson issued a denial. My doubts have nothing to do with who said what but with the realities of regulatory approval. There is no way DOJ would approve the combo, regardless of whether it's a Repub or Dem Admin. The only way, would be with a slashing of hubs, routes, etc...which unfortunately, would necessitate job losses.

Quite frankly, there is hardly any route overlap, DAL main hubs are ATL and JFK, where UAL doesn't have a major JFK operation (only LAX and SFO as well as ORD and DEN) and the same can be said for ATL and CVG... I would say that if anything DAL is a great fit, and I don't think much would have to be cut.

 

[BABABOOY]

Quite frankly, there is hardly any route overlap, DAL main hubs are ATL and JFK, where UAL doesn't have a major JFK operation (only LAX and SFO as well as ORD and DEN) and the same can be said for ATL and CVG... I would say that if anything DAL is a great fit, and I don't think much would have to be cut.

Of the following, one would have to go no?
not hard to tell which one:
ORD/CVG
JFK/IAD
DEN/SLC

 

[BoeingBoy]

Quite frankly, there is hardly any route overlap,

The DOT cares little about route overlap for the simple reason you illustrate - network carrier's routes by and large are to and from their hubs and their hubs are not at the same airports, so the routes don't overlap.

However, the DOT is very interested in market overlap. If a combination of two carriers results in a significantly larger share in markets (regardless of the routes used to serve that market), the DOT considers that anti-competitive. They frown at anything anti-competitive.

Jim

 

[LukeAisleWalker]

The DOT cares little about route overlap for the simple reason you illustrate - network carrier's routes by and large are to and from their hubs and their hubs are not at the same airports, so the routes don't overlap.

However, the DOT is very interested in market overlap. If a combination of two carriers results in a significantly larger share in markets (regardless of the routes used to serve that market), the DOT considers that anti-competitive. They frown at anything anti-competitive.

Jim

Precisely, Jim.
Such as: ORD-ATL, DEN-SLC,-ORD-CVG, ORD-SLC, DEN-ATL, and many more.

Pardus Hedge Fund leaked this to the press....why?? and why just after Richard Anderson mentioned setting up a committee from the board to study m&a's led by Mr. Carp. Things that make you go hmmm.....

 

[Bear96]

The DOT cares little about route overlap for the simple reason you illustrate - network carrier's routes by and large are to and from their hubs and their hubs are not at the same airports, so the routes don't overlap.

However, the DOT is very interested in market overlap. If a combination of two carriers results in a significantly larger share in markets (regardless of the routes used to serve that market), the DOT considers that anti-competitive. They frown at anything anti-competitive.

Jim

True. But even by that measure, it is hard to imagine which two others of the Big 6 could hook up and have less market overlap than UA/DL. So if a potential UA/DL merge is struck down on those grounds, it is hard to see how any two of the Big 6 could combine.