What others are saying...
Bear Stearns Analyst Report - 12/1/06 “In our view, one of the reasons US Airways’ offer to Delta is interesting (aside from potential synergy and less capacity) is that the deal provides investors in listed equities access to where the real money is made in airlines – the restructuring process.†- Alan Sbarra, industry consultant, Roach & Sbarra
Houston Chronicle 11/26/06 - "This has been waiting to happen for a long time, everyone has been expecting consolidation. Nobody considered US Airways a player, but this clearly is a signal that everybody is in play." - Serguei Netessine, professor of operations and information management, Wharton
Knowledge@Wharton 11/29/06 - "For US Airways, this merger looks logical to me. They want to increase access to routes and reduce coverage of local markets where they compete intensively with local carriers. Delta has a lot of international routes. They have a dominant position over the Atlantic. Those routes are much more lucrative than local routes and there is less competition. Presumably, a merged airline would rely more on international routes to make money than on local routes where they compete with low-cost carriers like Southwest Airlines." - Jim Corridore, airline equity analyst, Standard & Poors
Knowledge@Wharton 11/29/06 - "There is a ‘good logic’ behind a US Airways-Delta merger. There is some overlap of assets and some non-overlap, and both those things are positives. They can eliminate redundant costs. There are definitely synergies in the deal, particularly on the East Coast. Delta brings a strong international network that US Airways doesn’t have. So I think a combined US Airways and Delta – and America West – is a stronger carrier in terms of a domestic and international footprint." - W. Bruce Allen, professor of business and public policy and director of the Wharton Transportation Program
Knowledge@Wharton 11/29/06 - "Investors would love to see a US Airways-Delta combination. Wall Street feels that the industry needs fewer big airlines and that it would benefit from capacity reduction in an industry that has shown signs of renewed strength of late after struggling financially for years." - Salt Lake Tribune Dave Hirschman, columnist
11/26/06 - "US Airways’ bid to take over Delta Air Lines is a stunning move for a newly revived carrier that came within an eyelash of liquidation two years ago. Even in the passenger airline industry, where jarring reversals of fortune are commonplace, the US Airways transformation from deathbed to potentially the world’s largest passenger carrier is remarkable for its speed, daring and historical sweep." - Phoenix Arizona News (no author listed)
11/26/06 - “If any airline executive is capable of pulling off such a complex merger, Parker seems a good bet…people are starting to view Parker as the new Herb Kelleher…founder of US Airway's arch-competitor, Southwest.â€
"Noted as a "big picture" futurist, Parker made Tempe-based America West Airlines - then valued at just $150 million or so - vastly bigger when it acquired US Airways a little over a year ago and assumed its name. Estimated current value $5 billion. That was bold. Now Parker seeks to acquire an airline more than 50 percent larger than US Airways by offering to pull Delta out of bankruptcy court. That’s Kelleher-quality bold"
"Combining three major airlines would be the accomplishment of a lifetime for any airline executive."
"And if Parker can ensure that a merged Delta and US Airways is headquartered in Tempe, this will be the home of the largest U.S. airline in terms of passenger traffic. Now, that’s Parker-quality bold." - Patrick Murphy, Aviation consultant (formerly tracked airline competition for DOT)
Time magazine 11/27/06 - "A US Airways-Delta merger is the start of a needed consolidation. The low-cost carriers are now big enough to offer real alternatives to large network airlines. It will be good for consumers in the long run, making fewer, healthier carriers." - Jim Corridore, Airline Analyst, Standard & Poor’s
CNBC, Morning Call 11/15/06 - "As far as US Airways is concerned, I think that obviously Doug Parker and Scott Kirby have shown that they can do this with America West. They have done a great job for the shareholders of US Airways already, and I think that this deal would be greatly accretive, and would be good for not only US Airways and Delta, but for the entire industry in terms of capacity reduction." - Darryl Jenkins, Former Director, Aviation Institute of George Washington University
CNN, In the Money 11/19/06 - "This is certainly a very good offer; it’s going to be almost impossible for Delta to emerge from bankruptcy as they had originally planned." - LA Times Editorial
11/16/06 - "US Airways Group Inc.'s announced bid to acquire Delta Air Lines Inc. promises to set off a needed consolidation of the business that will make it better able to weather the next financial downturn. Let's hope federal regulators don't block such a transformation this time around." - Ray Neidl, an analyst for Calyon Securities
St. Paul Pioneer Press (MN) 11/16/06 - "We believe the industry is fragmented and primed for consolidation...Overall, these are exciting times for the industry." - Stephen Gordon, president of the ground workers union at Northwest Airlines
Minneapolis Star Tribune 11/16/07 - If mergers "remove the overcapacity of seats from the sky and make the airlines a more competitive business, it would be good for our membership." - Southwest Airlines Chief Executive Gary Kelly
Wall Street Journal 11/21/06 - "We consider this [bid for Delta] a serious offer and a very substantial one, and one that we're assuming has a decent chance of actually happening." - Washington Post Editorial
11/19/06 - "In the end, most industry experts predict that the industry will restructure itself into three or four major U.S. carriers serving not just the entire country, but the world." - Jeff Clarke, C.E.O., Travelport
CNBC, Closing Bell 11/15/06 - "I think it will actually help the industry. I believe consolidation is inevitable...So I think having a healthy airline set of industries is good for consumers and good for business." - Margaret Patel, a portfolio manager at Pioneer High Yield Fund
Dow Jones 11/15/06 - "The prospect for everybody would be better because you'd have these companies combining and forming a much stronger entity which would eliminate redundancies...The prospect for recovery for bondholders would be improved." - William Warlick, an industry expert at the Chicago firm Fitch Ratings Ltd
The Philadelphia Inquirer 11/16/06 - "This is a pretty lucrative offer for unsecured debtors." - Terry Trippler, Airline industry expert
CNBC, Squawk on the Street -11/15/2006 "Absolutely fares would fall. US Airways has done an amazing job of absolutely lowering fares in the markets that they serve. They have said they’re going to cut them, and they have done it."
CNBC, Morning Call 11/15/06 - "I spoke to Doug Parker, I told him that we would work with them for a smooth transition if, in fact, the merger took place." - Robert Roach, Jr., General Vice President, International Association of Machinists and Aerospace Workers
Regards,
USA320pilot
