US Airways – Delta Merger Update: December 15, 2006
Who’s saying what about the US Airways - Delta merger
“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.†-- Bear Stearns Analyst Report, Dec. 1
We like the news because Delta is in some ways the weakest of the carriers right now, and US Air has considerably strengthened.†- Ronald Fiedling, SVP, Rochester Investment Team at OppenheimerFunds, Reuters, Nov. 15
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." - Stephen Gordon, president of the ground workers union at Northwest Airlines, Minneapolis Star Tribune, Nov. 16
“This is a pretty lucrative offer for unsecured debtors.†- William Warlick, industry expert, Fitch Ratings, Ltd., The Philadelphia Inquirer, Nov. 16
“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.†- Jim Corridore, airline analyst, Standard & Poor’s, CNBC’s Morning Call, Nov. 15
“When the industry gets into trouble, capacity never comes out, so losses become worse and worse. The thing I like about this deal is [that] Doug Parker says, 'this industry has a lot of capacity [and] a lot of us are fighting a bit too hard.'†- Kwame Webb, an airlines analyst at T. Rowe Price, Knowledge@Wharton, Nov. 29
“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.†- Patrick Murphy, aviation consultant, Time
“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.†- Washington Post editorial, Nov. 19
“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.†- Margaret Patel, portfolio manager, Pioneer High Yield Fund, Dow Jones, Nov. 15
“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.†- Terry Trippler, airline industry expert, CNBC’s Squawk on the Street, Nov. 15
"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." - Gary Kelly, Southwest Airlines Chief Executive, Wall Street Journal, Nov. 21
What’s in a Name?
TEMPE (About US – US Airways’ Weekly Newsletter – December 14, 2006) – Since last month’s announcement of a possible deal with Delta, many (US Airways) employees have spoken up regarding the name of a combined airline.
- “Why Delta? We’ve worked hard to maintain the US Airways name.â€
- “Doesn’t ‘US Airways’ seen like a better name for a U.S.-based carrier?â€
- “It won’t take long before US Airways has the notoriety of Delta.â€
And, while those are all great points, the fact remains that Delta Air Lines would be the name of the combined carrier.
Why Delta Air Lines?
The choice was made with the same logic that was used to determine US Airways over America West. Back when the US/AWA merger was in the works, the company enlisted the help of a well-known poling firm to conduct a survey with travelers from around the nation.
Several strong themes emerged from this study, including the fact that Southwest Airlines has the strongest airline name brand, followed by American, Delta, United, and that everyone else lags behind. The US Airways brand was chosen over America West largely because many more consumers recognized it.
Coming in among the top three, the Delta Air Lines brand is clearly a very powerful one on a global basis. That translates to brand equity, meaning Delta is a well-known brand – more so than US Airways. To ignore that would be irresponsible to our employees and other stakeholders.
If the merger fails to materialize, US Airways will continue to operate proudly under its name, re-energizing it and earning back customers because – yes – it’s a fitting and well-known name for an airline that spans the nation and far beyond.
Standard & Poor's Sees 'Window of Opportunity' for Airline Industry Consolidation
See Story
Regional Airlines May Suffer in Mergers
See Story
High Hurdles Await Airlines
See Story
If More U.S. Airlines Merge, Who would Benefit?
See Story
Regards,
USA320Pilot
Who’s saying what about the US Airways - Delta merger
“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.†-- Bear Stearns Analyst Report, Dec. 1
We like the news because Delta is in some ways the weakest of the carriers right now, and US Air has considerably strengthened.†- Ronald Fiedling, SVP, Rochester Investment Team at OppenheimerFunds, Reuters, Nov. 15
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." - Stephen Gordon, president of the ground workers union at Northwest Airlines, Minneapolis Star Tribune, Nov. 16
“This is a pretty lucrative offer for unsecured debtors.†- William Warlick, industry expert, Fitch Ratings, Ltd., The Philadelphia Inquirer, Nov. 16
“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.†- Jim Corridore, airline analyst, Standard & Poor’s, CNBC’s Morning Call, Nov. 15
“When the industry gets into trouble, capacity never comes out, so losses become worse and worse. The thing I like about this deal is [that] Doug Parker says, 'this industry has a lot of capacity [and] a lot of us are fighting a bit too hard.'†- Kwame Webb, an airlines analyst at T. Rowe Price, Knowledge@Wharton, Nov. 29
“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.†- Patrick Murphy, aviation consultant, Time
“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.†- Washington Post editorial, Nov. 19
“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.†- Margaret Patel, portfolio manager, Pioneer High Yield Fund, Dow Jones, Nov. 15
“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.†- Terry Trippler, airline industry expert, CNBC’s Squawk on the Street, Nov. 15
"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." - Gary Kelly, Southwest Airlines Chief Executive, Wall Street Journal, Nov. 21
What’s in a Name?
TEMPE (About US – US Airways’ Weekly Newsletter – December 14, 2006) – Since last month’s announcement of a possible deal with Delta, many (US Airways) employees have spoken up regarding the name of a combined airline.
- “Why Delta? We’ve worked hard to maintain the US Airways name.â€
- “Doesn’t ‘US Airways’ seen like a better name for a U.S.-based carrier?â€
- “It won’t take long before US Airways has the notoriety of Delta.â€
And, while those are all great points, the fact remains that Delta Air Lines would be the name of the combined carrier.
Why Delta Air Lines?
The choice was made with the same logic that was used to determine US Airways over America West. Back when the US/AWA merger was in the works, the company enlisted the help of a well-known poling firm to conduct a survey with travelers from around the nation.
Several strong themes emerged from this study, including the fact that Southwest Airlines has the strongest airline name brand, followed by American, Delta, United, and that everyone else lags behind. The US Airways brand was chosen over America West largely because many more consumers recognized it.
Coming in among the top three, the Delta Air Lines brand is clearly a very powerful one on a global basis. That translates to brand equity, meaning Delta is a well-known brand – more so than US Airways. To ignore that would be irresponsible to our employees and other stakeholders.
If the merger fails to materialize, US Airways will continue to operate proudly under its name, re-energizing it and earning back customers because – yes – it’s a fitting and well-known name for an airline that spans the nation and far beyond.
Standard & Poor's Sees 'Window of Opportunity' for Airline Industry Consolidation
See Story
Regional Airlines May Suffer in Mergers
See Story
High Hurdles Await Airlines
See Story
If More U.S. Airlines Merge, Who would Benefit?
See Story
Regards,
USA320Pilot
