US airways puts in a bid for Delta!

[eolesen]

It amazes me how once bankrupt USAir now can offer 4 Billion in cash to buy another carrier but was unable to fund its pension plan obligations to their employees.

The USAir that dumped its pensions no longer exists. The current US Airways is America West, and has no more obligation to take care of old US Airways' obligations than AA had an obligation to deal with the mess created by Carl Icahn at TWA.

 

[MCI transplant]

What crack are you talking about. The other boards are already talking about the way AA handled TWA with the Merger and or acquisition talk. None from the other airlines have favored in anyway the job AA and it's unions dealt with it MCI. That reputation will be around for years so deal with it.

<_< --- If you read the man's statement, you'd see it was a "crack" directed at me, and my fellow TWA employees. The fact of the matter is that it was us that kept the Airline flying for as long as it did! There is no sham in that! It was a failure of our former "management" that finally took us down!----- Yes! The accusation of TWA, and how it was handled will be malled over, and compared to, during this time! I expect that! But what I don't like is some scum bag trying to defame me or my fellow former TWA employees! We did what we thought we had to! That was our decision! And if you or any other of your scum bags don't like it, you can go straight to hell!!!

 

[eolesen]

Gary Chase from Lehman is giving this a 60/40 chance of succeeding. I'm inclined to say it's about 70/30, and don't expect any major airline to object to it. DL's been horribly irrational with the capacity they've added in Ch.11, and any reductions that result will benefit the rest of the carriers.

 

[SPG Trvlr]

<_< --- If you read the man's statement, you'd see it was a "crack" directed at me, and my fellow TWA employees. The fact of the matter is that it was us that kept the Airline flying for as long as it did! There is no sham in that! It was a failure of our former "management" that finally took us down!----- Yes! The accusation of TWA, and how it was handled will be malled over, and compared to, during this time! I expect that! But what I don't like is some scum bag trying to defame me or my fellow former TWA employees! We did what we thought we had to! That was our decision! And if you or any other of your scum bags don't like it, you can go straight to hell!!!

So sorry for my mis-understanding. I support all the good people working and on the street from TWA. Three of which are imediate family members Again my apologies.

 

[MCI transplant]

So sorry for my mis-understanding. I support all the good people working and on the street from TWA. Three of which are imediate family members Again my apologies.

<_< --- Thank you Sir! Apology excepted!

 

[whlinder]

Gary Chase from Lehman is giving this a 60/40 chance of succeeding. I'm inclined to say it's about 70/30, and don't expect any major airline to object to it.

Succeeding as in the merger going through, or succeeding as in going through and then new Delta realizing all the synergies they planned on and actually making money medium/long-term?

The former I agree has decent odds. The latter I don't see.

 

[L1011Ret]

Wait until the frenzy gets heated and some small airline that managed to persuade Wall Street Bankers to lend them several billion puts in an offer for AA. Then the APFA can whine about being stapled to the bottom of a seniority list. After all, they have set legal precedent for it twice no matter what their contract says.

 

[FA Mikey]

Succeeding as in the merger going through, or succeeding as in going through and then new Delta realizing all the synergies they planned on and actually making money medium/long-term?

The former I agree has decent odds. The latter I don't see.

The Justice Department, which would scrutinize any potential merger, might also force the airline to eliminate some of its East Coast hub airports. The airline would have major operations at pairs of neighboring hubs, such as those in Charlotte and Atlanta, and New York and Philadelphia.

Antitrust lawyers said the Justice Department would focus on whether the proposed merger might diminish competition and harm consumers. Six years ago, the department seemed ready to challenge a proposed merger between US Airways and United Airlines before it fell apart.

But the emergence of low-cost carriers and Delta's struggles in bankruptcy may change the view of the department's lawyers, said Bill Bayer, an antitrust lawyer and a former head of the Federal Trade Commission's antitrust division.

"The market has obviously changed in six years," Bayer said, but questions remain about whether "it has changed to the point where the cost savings from combining these two carriers will outweigh the risks to consumers and competition."

If the airlines reach a deal, it will also probably be studied by the new Democratic Congress next year.

Rep. James L. Oberstar (D-Minn.), the ranking Democrat, and likely future chairman, on the House Transportation and Infrastructure Committee, said he would probably hold hearings on such a merger.

"A combination of carriers of this magnitude should be scrutinized in the public domain," Oberstar said.story here

 

[eolesen]

DOJ tends to be a lot more autonomous from other agencies for good reason, so Oberstar can call hearings, I don't know that he has that much power over the process.

With this being a hostile bid, I don't know that the DOJ will look at it the same way they did UA/US. With DL in bankruptcy, the standards are lessened:

If bankruptcy is a factor in our merger analysis, obviously it is because one of the merging parties is in or near bankruptcy. This is relevant because, if a firm is failing, then on balance it may be better to allow even an anticompetitive merger than to watch the failing firm's assets leave the market and be unavailable to any competitor. In such a situation, we will allow an otherwise anticompetitive merger to go forward without challenge only if the following conditions are met: the failing firm will be unable to pay its bills in the near future, the failing firm could not successfully reorganize in bankruptcy, the firm has tried to sell itself to someone else, in a combination that will not lessen competition as much, and without the acquisition the firm's assets will exit the market.

Full text is at http://www.usdoj.gov/atr/public/speeches/217987.htm

I don't know that the argument is quite there that DL is a failing firm, but it's possible that a lot can change between now and the end of the exclusivity period for their ability to produce a reorganization plan.

 

[flyhigh]

If this goes the distance, or at least to DOJ review, I think it's fairly certain we'll see a few requirements/concessions come out of it. My thoughts on what are as follows:
- Shuttle
- LGA & DCA slots
- BOS Gates
- ATL or CLT hub
- SLC or LAS hub

For AA the first three might be worth looking at along with some M80's

 

[eolesen]

BOS gates could pose an interesting problem for Massport. DL can still rid itself of some of the most expensive real estat at Logan. If they did that, it's unlikely that Jetblue, AA, or anyone else who is sane would be willing to take the space at Massport's current lease rates.

Slots are a definite issue. At LGA and DCA, they'd control about 40% of the slots, which again would probably be distributed to new entrants moreso than to the legacy carriers.

I don't see ATL/CLT or SLC/LAS being a competition issue EXCEPT in the few places where US and DL are the only game in town. That's going to be somewhat limited.

The last thing AA would need is more MD80's. If they could get some of DL's 738s, that's another story.

 

[Nor'Easta]

According to what Parker said is his online conference call today:

Name to be used: Delta

Hubs will be: PHX, SLC, ATL and CLT

Hubs to be closed: LAS and CVG

All PHL Intl' flying will go to JFK

One Shuttle will be sold

CLT will still be a hub and service all current routes. Less frequency, more capacity.

All 50 seat RJ's will be gone. They will keep 70 and 90 seat RJ's. Anything over 90 seats will be flown by mainline.

They will keep all US Airways owned regional carriers. No mention about the Delta one (ComAir). But, since the 50 seat RJ's will be gone...Sounds like ComAir will be too.

Once everything is done they will be looking to place a huge aircraft order with Boeing or Airbus to simplify the fleet.

For integration of employees, it should be a piece of cake. Delta only has one union on the property (Pilots). Everyone else will probably get a Staple job (no union/contract = no protection).

 

[MCI transplant]

If this goes the distance, or at least to DOJ review, I think it's fairly certain we'll see a few requirements/concessions come out of it. My thoughts on what are as follows:
- Shuttle
- LGA & DCA slots
- BOS Gates
- ATL or CLT hub
- SLC or LAS hub

For AA the first three might be worth looking at along with some M80's

<_< ---- Don't we still have MD80's sitting in the desert?-- 😉

 

[nbmcg01]

[quote name='Nor'Easta' post='430643' date='Nov 17 2006, 02:54 AM']According to what Parker said is his online conference call today:

Name to be used: Delta

Hubs will be: PHX, SLC, ATL and CLT

Hubs to be closed: LAS and CVG

All PHL Intl' flying will go to JFK

One Shuttle will be sold

CLT will still be a hub and service all current routes. Less frequency, more capacity.

All 50 seat RJ's will be gone. They will keep 70 and 90 seat RJ's. Anything over 90 seats will be flown by mainline.

They will keep all US Airways owned regional carriers. No mention about the Delta one (ComAir). But, since the 50 seat RJ's will be gone...Sounds like ComAir will be too.

Once everything is done they will be looking to place a huge aircraft order with Boeing or Airbus to simplify the fleet.

For integration of employees, it should be a piece of cake. Delta only has one union on the property (Pilots). Everyone else will probably get a Staple job (no union/contract = no protection).[/quote]


The f/as will get DOH per AFA. There has not been any mention of the employees. I think it will be interesting to see if employees are included in "the deal".

 

[Wretched Wrench]

Front page article in thurs WSJ has the sentence. "American could take a look at Northwest Airlines."