Press Release - From Doug @ 208pm 12/19

[Fly4Free]

US Airways
USNEWS NOW


US Airways Comments on Delta Standalone Plan
December 19, 2006

US Airways Group, Inc. today commented on the release of Delta Air Lines Inc.’s standalone plan for its Chapter 11 restructuring.

Doug Parker, US Airways’ Chairman and CEO said, “We have always expected that Delta would file a standalone plan with the Bankruptcy Court. This plan will provide Delta creditors with a benchmark against which to evaluate the competing proposals and we welcome that comparison. This is an important step in a process that we believe will result in the merger of US Airways and Delta.

“Combining US Airways and Delta will create at least $1.65 billion in annual synergies beyond the value that could be created by any standalone plan. These synergies come on top of the certainty of $4.0 billion in cash and the upside potential of 78.5 million shares of US Airways stock. These shared synergies will benefit all shareholders in the ‘New’ Delta. Factoring the synergy benefits into our offer, the current value of our proposal is significantly greater than the value of Delta’s standalone plan.

“We remain a disciplined and determined bidder for Delta. We continue to work productively with the Creditors Committee and the Ad Hoc Bondholders Committee. Finally, we recognize and appreciate the creditors’ ultimate authority in this process.â€

US Airways is the fifth largest domestic airline employing nearly 35,000 aviation professionals worldwide. US Airways, US Airways Shuttle and US Airways Express operate approximately 3,800 flights per day and serve more than 230 communities in the U.S., Canada, Europe, the Caribbean and Latin America. The new US Airways -- the product of a merger between America West and US Airways in September 2005 -- is a member of the Star Alliance, which provides connections for our customers to 841 destinations in 157 countries worldwide. This press release and additional information on US Airways can be found at www.usairways.com. (LCCG)

 

[USA320Pilot]

US Airways Comments on Delta Standalone Plan

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US Airways to Continue Delta Bid, Shares Trade Sharply Higher in Afternoon Trading

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USA320Pilot comments: It is my understanding the US Airways - Delta M&A game is just beginning.

Today in a conference call Delta Chief Executive Gerald Grinstein told analysts "Every carrier is studying every other carrier all the time, and if the process of consolidation starts, you would not want to be left out. If the process happens, I would hope that we would be an acquirer rather than an acquiree."

According to the AP, the creditors reamin the key. The AP indicated, "Creditors holding at least two-thirds of the value of total impaired claims -- debt that will not be repaid in full -- must vote in the plan's favor for it to succeed. The bankruptcy court also needs to approve the plan."

"The airline's unsecured creditors generally will receive new shares for their claims. Current holders of Delta common stock will receive nothing, and those shares will be canceled."

US Airways is offering to pay creditors $4 billion in cash and 78.5 million shares of US Airways stock, and analysts have said that some creditors could find the cash tempting. Delta said it has not yet decided whether its plan would offer any cash.

See Story

How could it be that Delta's stand-alone plan had an exclusion that "the figures don't include an executive compensation package, which the airline says would be added later" and it does not offer the creditors any cash?

Now why would the executive compensation package be excluded from the plan?

In a statement, US Airways CEO Doug Parker said, "We remain a disciplined and determined bidder for Delta. We continue to work productively with the Creditors Committee and the Ad Hoc Bondholders Committee."

Again, it's my understanding this is just the beginning of the hostile takeover process.

Meanwhile, it appears Delta may not object to M&A activity, Delta management is hiding their executive compensation plan, and Delta's plan may be grossly overvaluded/does not include cash. As I indicated above, it's my understanding US Airways is going to become even more aggressive and will turn up the heat on Delta in the not-so-distant future with its updated hostile takeover bid.

Will a merger happen? I do not know because the parties continue to fight, but what I do know is that US Airways' bid is expected to be sweetened and Delta's stand-alone plan is likely to be closely evaluated because it has a wide valuation spread.

Best regards,

USA320Pilot

 

[Bear96]

Again, it's my understanding this is just the beginning of the hostile takeover process.

Ummm . . . Duh?