poll

[cactusflyer]

I agree, 50/50. On a side note, I love your avatar. Welcome to the boards. Enjoy the BS, lol.

Thanks! Hope to contribute some of my own "BS" here and there myself.... 😀

 

[delldude]

This will go through with a few "adjustments" to the plan.

Like sionara Pittsburgh...... 😉

 

[SKY HIGH]

US Airways, Delta merger has 80% likelihood, analyst says

Cincinnati Business Courier
9:29 AM EST Thursday


JP Morgan Securities analyst Jamie Baker has predicted an "80 percent" likelihood of ultimate creditor and regulatory approval for US Airways' proposed merger with Delta Air Lines and doesn't think that bodes well for Comair.

In a report to investors, Baker said the other option is a competing bid for Atlanta-based Delta (Pink Sheets: DALRQ).

"Clearly, lots of twists and turns lie ahead," he wrote.


Executives at Delta, which operates its second-largest hub at the Cincinnati/Northern Kentucky International Airport, have said repeatedly that the airline wants to emerge from bankruptcy in early 2007 as an independent carrier.

Delta CEO Gerald Grinstein underscored that sentiment in a memo to employees Nov. 15, the day US Airways publicized its merger intentions.

"While Delta is obligated to review this proposal carefully, we remain skeptical that it would make sense to deviate from our plan. We are working hard to regain an industry position of strength and leadership," Grinstein wrote. "From that position, we can best control our own destiny and pursue the direction that best benefits all Delta constituents, including Delta people, now and in the future."

US Airways CEO Doug Parker first talked to Grinstein about a possible merger in the spring and followed up with a more detailed proposal in September. Grinstein rebuffed the offer in a letter last month, and US Airways (NYSE: LCC) went public with its intentions to turn up the heat on Delta and try to convince the bankrupt airline's creditors of the benefits of a merger.

In his memo, Grinstein wrote that he had the backing of Delta's Creditors Committee when he declined merger discussions in October.

"Obviously, others are recognizing the success we've achieved together by reducing costs, increasing revenue, and improving customer products and services," he wrote. "You have good reason to be proud of the positive response you've helped our company earn."

Grinstein stressed that the U.S. Bankruptcy Court has granted Delta management the exclusive right until Feb. 15, 2007, to create its own plan of reorganization and, during that time, others can't submit competing plans.



only stating opinions

 

[AstroLounge]

It's all a smoke screen. Just like America West (US Airways) going after ATA......bad deal, no problem, gobble up US Airways. Same sort of thing...Doug will merge with some airline.

I agree totally. There is more going on than meets the eye.....and a "hostile takeover"....why would you bother. The only similar scenario was when Pan Am gobbled up National Airlines (and that combination never proved beneficial). US is a better match for UA or NW, the overlap of US-Delta screams ANTI-TRUST!

 

[Gilding the Lily]

the overlap of US-Delta screams ANTI-TRUST!

This will not be a one-shot deal with the DOJ. The US/Delta plan is not presented to the DOJ without any further collaboration on US's part.

It is probably best compared to a negotiation. US will present its initial plan; the DOJ would say that the plan, as currently drafted, presents an antitrust issue. Then US will say "OK, what if we cut this route and sold this to United, etc." Then the DOJ would say "getting warmer." And so on and so on.

Basically, the crucial point is not whether the DOJ will accept the merge; but rather, it is whether the DOJ will accept a merge that is still favorable to US. It is possible that the DOJ will only accept the merge if US makes more concessions than it is willing to make. At that point, US will draft its last plan that has the most concessions it is willing to make and the DOJ will then decide if that plan is acceptable.

With that said, the DOJ recognizes that consolidation is necessary and inevitable if the industry is to survive. Let's see if this merger is what the DOJ had in mind; if so, US will not need to make many concessions.

The bigger issue is whether the creditors will like US’s plan more than it likes Delta’s plan. Remember, Boeing is a huge creditor of Delta. And recently, US has entered into large contracts with Airbus. I am sure that US will make it work; but one would have to think that Boeing, knowing about the Airbus contracts, is not going to be an easy ‘win-over’.

 

[l8rd8r]

It's all a smoke screen. Just like America West (US Airways) going after ATA......bad deal, no problem, gobble up US Airways. Same sort of thing...Doug will merge with some airline.

I agree...NW!

 

[ChrisUS]

I agree totally. There is more going on than meets the eye.....and a "hostile takeover"....why would you bother. The only similar scenario was when Pan Am gobbled up National Airlines (and that combination never proved beneficial). US is a better match for UA or NW, the overlap of US-Delta screams ANTI-TRUST!

Yes, NW is better and why go after someone who doesnt want you? Can you IMAGINE the employee morale? 🙁

 

[rsv4ever]

im a US east employee... i dont think that delta will happen- but i think it will happen with another airline.

 

[Breath_of_Fresh_USAirways]

It's all a smoke screen. Just like America West (US Airways) going after ATA......bad deal, no problem, gobble up US Airways. Same sort of thing...Doug will merge with some airline.

Oh, yeah, right that makes sense! An $8 Billion "smoke-screen!" What are you smoking??? I want some!

Like a friend of mine NOT associated with aviation in any way told me when the AWA/USA merger was announced, "Follow the money." It will happen. They've done their homework.

 

[bigbusdrvr]

just a thought here...dont want ruffle any feathers but. if you talk to employees or customers i seem to get the same references to service n problems regardless of the airline or hub or city pair mentioned. with some exceptions obviously. but really all the legacys are the same, in my somewhat limited scope of things. so assuming that combinations are inevitable, wouldnt you want to come out with the best possible scenerio of the remaining three? if delta stands alone how will they fare against a combined ual/u n nw/co? maybe they would be better off with someone else but then again someone else insnt offering to dance now are they. some time you just have to make the best from whats available...happy thanksgiving!!

 

[NAPAUS]

Oh, yeah, right that makes sense! An $8 Billion "smoke-screen!" What are you smoking??? I want some!

Like a friend of mine NOT associated with aviation in any way told me when the AWA/USA merger was announced, "Follow the money." It will happen. They've done their homework.

So true, it is ALL about the money. US will merge/buy someone. My bet is will end up being NW. Much better fit- but what a mess the process will be!

 

[MarkMyWords]

Did anyone stop to think that the company did float this past the DOJ to get a preliminary feel for what would have to be divested? I would think that if you were going to put together an 8 billion dollar deal, you would know what to expect around every corner and not leave it to chance.

 

[Itestwell]

Did anyone stop to think that the company did float this past the DOJ to get a preliminary feel for what would have to be divested? I would think that if you were going to put together an 8 billion dollar deal, you would know what to expect around every corner and not leave it to chance.

DP says in the webcast that all the work on this potential transaction was done with and reviewed by an antitrust lawyer. Good? Bad? Who knows, we shall see.....