Is NWA fending off AA by purchasing Mesaba?

[Barfbag]

With UAUA locking up China , the question now remains is when ( not if )will AA announce their intentions on NWA?
USAToday
NWA is already making defensive moves :
NWA - Mesaba

Will AA respond to less pie in the sky? USAir seems intent on Ichanising Delta. See next link.

NEWS ALERT!!!
from The Wall Street Journal
Jan. 10, 2007

WSJ- 01/07 United Wins Bid for First Nonstop Washington-China Route

US Airways has increased its offer to buy bankrupt rival Delta Air Lines to $10.2 billion from $8 billion by increasing both the cash and stock portions of the offer.

FOR MORE INFORMATION, see:WSJ

 

[FA Mikey]

An additional 150 million in debt doesn't mean much compared to the amount they already owe.

There is an incompatible fleet match and 3 more hubs this airline doesn't need.

Except for access to China and a working pacific rim operation NWA has little to offer for the hassle.

Unless AMR took only the pacific operation, I don't see the benefit, of the additional people hubs, and planes. Maybe someone else sees something I am not.

 

[Barfbag]

There is an incompatible fleet match and 3 more hubs this airline doesn't need.

Sounds like the AA/TWA deal on steroids.

 

[jimntx]

I also have doubts about an AMR purchase of NWA for reasons stated above. I think AMR was waiting to see if, by chance, NWA did not make it out of BK, and there was a fire sale of assets. If that had happened, AMR would have thrown as much of the $5.5 billion in cash at the Pacific routes (and the 747s needed to fly them) as would have been needed.

At this point, AMR does not need the grief another airline purchase would bring. For instance, given APFA's penchant for stapling, you would have to furlough the NWA f/as and bring back the former TW f/as for starters. There are still lots of pilots on furlough at AA as well.

And, you would have to proffer for people willing to transfer to MSP and DTW to work the flights--at the beginning at least. I don't know if all the route authorities are U.S. city specific or not. I'm sure NW's China routes are. I don't know about the others. Could we, for instance, have taken an MSP-NRT route and changed it to ORD-NRT or JFK-NRT?

 

[ILS2MINIMUMS]

At this point, AMR does not need the grief another airline purchase would bring.

A-M-E-N!!!

 

[Wretched Wrench]

The conspiracy theorist in me says it is part of the continuing assault on AMFA. NW will receive financial help from the other airlines in this endeavor.

 

[Kev3188]

How does acquiring (sp?) a fleet of roughly 34 Saabs equate to a pre-emptive strike against AA?

 

[FWAAA]

How does acquiring (sp?) a fleet of roughly 34 Saabs equate to a pre-emptive strike against AA?

It doesn't. AA will eventually buy some/all of NW. The parts AA doesn't want it will leave behind, just like the TWA asset purchase.

MEM hub? Left behind. MSP? Downsized somewhat. Might eventually resemble STL. DTW? Might eventually suffer similar fate as did STL, but plenty of business O&D in both MSP and DTW. AA just won't focus on hub connecting traffic to the same extent. North & South Dakota and all other NW bumpkinville strongholds? Leave to an American Connection-type carrier. Bunch of 737s in and out of MSP and DTW to business (and some leisure) destinations. Much less connecting traffic at those hubs.

Status match the NW elites and hope to capture most of their MSP and DTW O&D business. Rise to an equal footing with UAL on China and NRT. Keep the AMS operation if it makes sense. It's gonna happen.

 

[Barfbag]

The conspiracy theorist in me says it is part of the continuing assault on AMFA. NW will receive financial help from the other airlines in this endeavor.

NEWS ALERT
from The Wall Street Journal


Jan. 10, 2007

Northwest Airlines has been having recurring talks with Delta Air Lines about a potential link-up between the two, possibly after they both emerge from bankruptcy-court protection later this year, said people familiar with the matter. US Airways earlier today upped the ante by sweetening its hostile takeover bid for Delta to $10 billion.


FOR MORE INFORMATION, see: WSJ

It appears from the above release that NWA ( although in BK court ) is still resourceful, meaning the banks and Wall Street are fueling mergermania.

AMR, is cash rich and they will remain competitive, so AMR is still in the game, with NWA in their cross-hairs.

 

[Redbone]

NEWS ALERT
from The Wall Street Journal
Jan. 10, 2007

Northwest Airlines has been having recurring talks with Delta Air Lines about a potential link-up between the two, possibly after they both emerge from bankruptcy-court protection later this year, said people familiar with the matter. US Airways earlier today upped the ante by sweetening its hostile takeover bid for Delta to $10 billion.
FOR MORE INFORMATION, see: WSJ

It appears from the above release that NWA ( although in BK court ) is still resourceful, meaning the banks and Wall Street are fueling mergermania.

AMR, is cash rich and they will remain competitive, so AMR is still in the game, with NWA in their cross-hairs.

I think AA had better stay focused on paying down it's $31 Billion in debt before it is bought and sliced up. Cash rich means little if you need it to pay interest on $Billions of borrowed dollars.

You talk as if AA has a balance sheet like SW. AA is STILL in trouble and is hardly in a position to acquire another large airline...no matter how much it licks it's lips at those fabulous NW Asian routes.

 

[donttouchthebeauty]

I think AA had better stay focused on paying down it's $22 Billion in debt before it is bought and sliced up. Cash rich means little if you need it to pay interest on $Billions of borrowed dollars.

You talk as if AA has a balance sheet like SW. AA is STILL in trouble and is hardly in a position to acquire another large airline...no matter how much it licks it's lips at those fabulous NW Asian routes.

Very much correct Redbone -- AA has a huge debtload; and a few billion in cash - however; it is nowhere even remotely close to the amount needed to pay down the debt and the profits aren't that great. On top of that AA employees still have those dangling pesky pensions everyone likes to get rid of these days - To be competitive the debtload needs to come down - if you are going to keep some things around... like pensions and high employee wages.. If not AA will have a rough time ahead; especially wiht over 300 super 80 gas guzzlers.

 

[Redbone]

It doesn't. AA will eventually buy some/all of NW. The parts AA doesn't want it will leave behind, just like the TWA asset purchase.

MEM hub? Left behind. MSP? Downsized somewhat. Might eventually resemble STL. DTW? Might eventually suffer similar fate as did STL, but plenty of business O&D in both MSP and DTW. AA just won't focus on hub connecting traffic to the same extent. North & South Dakota and all other NW bumpkinville strongholds? Leave to an American Connection-type carrier. Bunch of 737s in and out of MSP and DTW to business (and some leisure) destinations. Much less connecting traffic at those hubs.

Status match the NW elites and hope to capture most of their MSP and DTW O&D business. Rise to an equal footing with UAL on China and NRT. Keep the AMS operation if it makes sense. It's gonna happen.

Wake up from that dream state. Be careful what you forcast. AA could end up on the wrong end of your fantasy.

A NWADAL merger would create a monster airline with supreame profitablility potential (esp.having unloaded billions in debt while in BK). That could spell very bad news for AA.

No other airline combo would have a comparable balance sheet. That is what stands out the most. That is why I was suspicious when they filed BK at the same time.

 

[Bob Owens]

It doesn't. AA will eventually buy some/all of NW. The parts AA doesn't want it will leave behind, just like the TWA asset purchase.

So in other words AA will buy NWA and then pretty much shrink back to the same size they were before the purchase? Just like when they purchased Air Cal, then got rid of everything, then bought the same stuff with Reno?

Todays AA has fewer employees than they had prior to the purchase of TWA.

 

[NewHampshire Black Bears]

Wake up from that dream state. Be careful what you forcast. AA could end up on the wrong end of your fantasy.

A NWADAL merger would create a monster airline with supreame profitablility potential (esp.having unloaded billions in debt while in BK). That could spell very bad news for AA.

No other airline combo would have a comparable balance sheet. That is what stands out the most. That is why I was suspicious when they filed BK at the same time.

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Redbone,

You make a HUGE point there.

Plus, (minus the A/C incompatability, and a lil' weakness in the Caribbean), NW grabbing DL, would "fill in" every "void"(worldwide)in the route system.

NH/BB's

 

[Barfbag]

I think AA had better stay focused on paying down it's $31 Billion in debt before it is bought and sliced up. Cash rich means little if you need it to pay interest on $Billions of borrowed dollars.

You talk as if AA has a balance sheet like SW. AA is STILL in trouble and is hardly in a position to acquire another large airline...no matter how much it licks it's lips at those fabulous NW Asian routes.

Paying down debt would be a more sensible way, yes. But these are not sensible times, is anyone afraid of Bankruptcy court? NWA just bought another airline while in BK court, now NWA and DAL are looking to merge again in BK court. These guys are shedding debt, and forecasting future debt while in BK court. Maybe the average Joe who recently refinanced their homes and who job is dubious is afraid of BK court. But, big Banks and merger brokers don't think that way. They see mergers as a way to make big money today, damn the debt, the employees (unions), and pensions that's all collateral damage. Banks and Brokers want extended interest payments and huge fees tied to the mergers. With fuel prices falling by the hour there is only more future money for the merger wars ahead.

BTW, the way NWA is operating in BK court, maybe they'll make a offer for AMR next. Everyone and everything is on the table.

Nothing but a game of craps.