If merger fails, US acquired?
- Thread starter Non Rev
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US1YFARE
Veteran
- Mar 31, 2004
- 3,932
- 54
The way things are going WE would probably be a lowfare division of TED.
I think UA F/A's would be horrified if they saw US's product. Some of UA F/A's are disappointed with the service that UA provides.
jack mama
Senior
brokenwrench
Senior
I hear this question frequently and the answer is, it's the wrong question. DL people say US brings nothing to DL that they don't already have. The same is true in reverse to a lesser extent. DL does have more Intl routes but nothing in Asia. US already serves plenty of cities in Europe, the Caribbean, Mexico and Central America. So maybe DL brings some South America that US does not have plus some recent expansion to Africa.
But all the above is really not relative to the reason for the merger. It's not about where US flies or where DL flies, or what new cities will the merger bring. It's all about the profit potential of the new airline. The most profitable airline in the world does not have a single international route.
Here's what US brings to DL---and for that matter what DL brings to US because neither of them can achieve it on their own. And that is a profitable airline year after year....not just every now and then when fuel prices are down and demand is high but consistently. None of the legacy carriers have been able to do that on their own. Losses have greatly exceeded profits. In fact, since the dawn of aviation, the industry is in the red when you add all carriers and all years profits and losses. The old way does not work.
DL could probably emerge right now as a stand-alone carrier and do very good because all the systems are in place to be profitable. But as soon as oil is back up, or world conditions reduce travel demand....all airlines will be struggling and some back in BK again. Doug's plan will be to create an airline that will be able to survive the rough years and anybody looking to put money behind an airline wants that.
Now I know DL people aren't very fond of US people...we've been competitors for years and I think DL sees themselves as better than US. So to allow them to be taken over by US causes heartburn. If so, maybe NW will work but I do not think a stand-alone plan will be appealing to the creditors.
flyingcat
Veteran
- Oct 10, 2005
- 658
- 0
I think something that is greatly overlooked is the potential for the eastern USA. The new management does not mind asking why do we even have such high pricing points on off peak flights in small to medium cities if the average LDF is so low. The other legacies have taken the mantra that if aint broke dont fix it and seem to be afraid to lower their fares in non LCC markets. It is like they are afraid even to try and see if there is traffic there that is driving to other cities.
However there is some gold in them hills.
That is why there are reductions in fares in a lot of medium sized cities with more to come. Unforutnately the high cost of RJ/prop seats does set a price floor meaning they lower prices if they can but not to Independence Air levels which are unsustainable. With DL/US as a combined entity we can offer the best service options up and down the coast.
If the HP/US merger had happened earlier I am confident that the BWI could have been retained.
However just as in CMH, if the numbers did not work they probably would have pulled the plug on PIT.
This spring for the first time in a long while the fleet will start growing again.
However there is some gold in them hills.
That is why there are reductions in fares in a lot of medium sized cities with more to come. Unforutnately the high cost of RJ/prop seats does set a price floor meaning they lower prices if they can but not to Independence Air levels which are unsustainable. With DL/US as a combined entity we can offer the best service options up and down the coast.
If the HP/US merger had happened earlier I am confident that the BWI could have been retained.
However just as in CMH, if the numbers did not work they probably would have pulled the plug on PIT.
This spring for the first time in a long while the fleet will start growing again.
I'm guessing guacho99 is a cubicle cowboy from Phx headquartes who hears all that rah rah stuff all day long and actually believes it.
millertime46
Newbie
Flufdriver
Senior
Ya, it's DEBT...but sometimes you have to spend money to make money. Not to hard to figure out, or maybe it is to some. Delta's right up there screaming about MORE DEBT, but do they really sit a figure on how it MAY create more income when it's all put together.....NO!!! There's no confusion about $$$$$$$ versus Debt unless your confused brokenwrench!!
PITbull
Veteran
I remember when there was a "consolidation airline industry" theme back in the mid to late 80s. Colodney, at the time, was so concerned about consolidation for fear of being "gulped up" that U had acquired PSA (because of its West routes) and Piedmont Airline. I think it was called "the poison pill" strategy that colodney instituted to prevent a hostile acquisition.
In retrospect, we all now know that "bigger" is not better, and that becoming a larger airline and acquiring your competition, does not prevent or lessen the possibility of furloughs, nor does it make an airline more stable when there is a down turn in the economy or industry. Ten years after U merged with Piedmont and PSA, U furloughed 24,000 employees from 2001-2005 and had 2 BK.
I believe the idea of DL going into bankruptcy in 2005 was to clean up their balance sheet, get rid of unsecured debt, renegotiate leases, downsize, and restructure.
DL does not have an ATSB outstanding and I believe they will be in a position of MAJOR strength when they emerge.
DL is U's direct compeition on the East. I think Dougie and the boys know that unless they acquire DL, DL will be a much stronger force on the East and International.
In retrospect, we all now know that "bigger" is not better, and that becoming a larger airline and acquiring your competition, does not prevent or lessen the possibility of furloughs, nor does it make an airline more stable when there is a down turn in the economy or industry. Ten years after U merged with Piedmont and PSA, U furloughed 24,000 employees from 2001-2005 and had 2 BK.
I believe the idea of DL going into bankruptcy in 2005 was to clean up their balance sheet, get rid of unsecured debt, renegotiate leases, downsize, and restructure.
DL does not have an ATSB outstanding and I believe they will be in a position of MAJOR strength when they emerge.
DL is U's direct compeition on the East. I think Dougie and the boys know that unless they acquire DL, DL will be a much stronger force on the East and International.
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