US Next Step if DL Merger Fails?

[CLT-Douglas]

What do you think US Airways next step will be if the Delta merger fails to happen? Go at it alone and hope the rest of the majors don't consolidate? Or, would it be too late to go after Northwest in order to break up a DL/NW deal if the Delta creditors think that would be a better solution then a US/DL deal?

 

[Jimmy Neutron]

What do you think US Airways next step will be if the Delta merger fails to happen? Go at it alone and hope the rest of the majors don't consolidate? Or, would it be too late to go after Northwest in order to break up a DL/NW deal if the Delta creditors think that would be a better solution then a US/DL deal?

How about finishing the first merger and start by treating the employees as assets instead of liabilities...

Without all employees being treated as one this airline with or without Delta is doomed.......

 

[yvrusfa]

CLT-Douglas....

Good question! One my friends and I were pondering yesterday.

Who knows? My thoughts are that..yes, we should complete our merger first. However, even if the DL deal does happen, nothing will even begin happening outside of the court process until after our May full integraton is complete anyway. So that will be done by then.

I think DP is right, that airlines in BK are the best bet to cut costs etc. That would mean NW. But, NW is a very troubled company, especially as far as Labour/Mgmt. issues are concerned that goes back 40+ years BTW! So, not sure they are a great choice for us. Plus, they don't offer a strong Trans-Atlantic hub location either.

If the merger dance continues without us, then they will have to look at other options and those carriers would most certainly not be in BK. Maybe UAL is a good option? Or they could go after AirTran and some other smaller carrier to beef up market share. No real way to get alot of Int'l presence that way though.

Hard to say. Lets just hope DP has a "plan b" that they can fall back on.
If we get stuck without a dance partner and everone else gets that much larger we will suffer and nonone wants that I doubt....well...except our competition that is! :unsure:

 

[Jimmy Neutron]

You better hope that if the merger does go through that you won't be one of the more than 10,000 + employees that loses your job......

 

[FWAAA]

You better hope that if the merger does go through that you won't be one of the more than 10,000 + employees that loses your job......

True, but you may be one of more than 10,000 furloughed employees whether or not the merger with DL happens.

How is that? As Southwest and JetBlue and Frontier and Airtran (and all the others) continue to grow and grow and grow, the legacies will probably continue to shrink. Failing to merge with Delta isn't gonna change that.

 

[gaucho99]

I've been wondering this as well and also was wondering why we chose DL over NW to begin with. NW would be less overlap but I agree there would be a labor mess, plus DL is a better airline overall than NW.

I think the only way DL can avoid the US merger is to merge with NW or somebody because I can't see the creditors taking the stand-alone DL plan over the merger proposal. That would leave us w/o a merger partner, if they go with NW. In any event, I do not think the merger thinking will be done if we fail with DL. I think it is a priority with Doug to hook up with someone. Maybe UA.

 

[wench1]

Increase the profit sharing that we all were involved with when we gave did our givebacks.

 

[PHL]

Gangwal's famous quote in the 2000 press conference regarding the US-UA merger: "There is no plan B. We are cingularly comitted to this merger".

Hopefully the current management learned from that.

Ideally, if the merger fails it would make sense to strengthen the current airline. Add more long-haul routes, aquire aircraft, etc.

 

[Itestwell]

CLT-Douglas....

Good question! One my friends and I were pondering yesterday.

Who knows? My thoughts are that..yes, we should complete our merger first. However, even if the DL deal does happen, nothing will even begin happening outside of the court process until after our May full integraton is complete anyway. So that will be done by then.



You are joking, right? There is no way they will have fully, merged agreements by May with all employee groups. They have not even opened any important sections with the FA contract, and they are meeting about 6 days a month, when convenient. I give it at least another year, if not more.

They may combine rez systems, but full integration? Nowhere on the horizon. Consider this clip from DCA LECP sent today:


Building a Better Airline? Start with US first!

I took some time (and a sedative) and went to the new Company
website regarding the Delta merger. While it was filled with
press releases and news articles in favor of the merger I
couldn't really find anything about "building a better airline".
In fact all I kept on thinking of is instead of focusing all
their energy on this pending merger, why not focus on the one at
hand. The slow pace of negotiations, catering problems, crew
bases out of balance, shortage of flight attendants, continued
violations of the existing collective bargaining agreement. Is
this really how you build a better airline? I imagine it can
only be a sign of times to come which can't be good. My
suggestion would be to focus the Company time and energy on the
task at hand. This merger may not happen but we are still here
and it would appear that they have more than their hands full.



Maybe it's time for the MEC to make some noise?

 

[usairways85]

Well US already lost out on the opportunity to pick up some extra widebodies Austrian(i think it was them) had on the market. Something tells me there is no plan B

 

[USA320Pilot]

In my opinion, and I have no information on this, if US Airways does not complete the Delta merger Doug Parker will go to Plan "B" - Northwest Airlines.

US Airways' "executive suite" sees value in merging with a bankrupt carrier because of the financial flexibility available while an airline is operating under court protection in a "formal reorganization".

The Delta and Northwest merger's would be once in a lifetime opportunities to remove fixed costs that otherwise would not be available during a merger between two solvent companies.

I too thought Northwest would be a better fit, but after talking to Doug Parker and listening to Scott Kirby speak I now know the Delta combination would be the best fit. Parker's team began working on the Delta merger immediately after the US Airways "corporate transaction" was complete on September 27, 2005 because management believes it would provide the greatest profit potential (highest cost cuts, revenue gains, and economies of scale) and growth opportunity.

Regards,

USA320Pilot

 

[Gilding the Lily]

In my opinion, and I have no information on this, if US Airways does not complete the Delta merger Doug Parker will go to Plan "B" - Northwest Airlines.

US Airways' "executive suite" sees value in merging with a bankrupt carrier because of the financial flexibility available while an airline is operating under court protection in a "formal reorganization".

The Delta and Northwest merger's would be once in a lifetime opportunities to remove fixed costs that otherwise would not be available during a merger between two solvent companies.


Regards,

USA320Pilot

If US was to go after your prophesied 'Plan B', then it would have to get 'Plan B' together real quick. NW is not too far behind DL in its bankruptcy; NW filed its Plan for Reorganization last Friday.

Perhaps, however, NW realized it may be a target to an unwelcome merger candidate. This could explain why NW filed its bare-bones Plan without the Disclosure Statement that usually accompanies the Plan. Without the Disclosure statement, we are in the dark as to valuation, business strategy, financial projections, and the percentage of new stock that will go to the creditors.

The omission is definitely raising my eyebrows. Obviously, they are playing the "need more time" card. The question is... why do they need that additional time? Is it to continue/enter merger discussions or is it to fine-tune the financial details/projections to all but guarantee support from the voting creditors?

Filing the plan without the Disclosure Statement is nearly pointless... in other words, what good is it to file a plan when you don't even have the details to fulfill that plan? At best, it can be considered an insufficient piece of paper that simply shows that a little progress has been made.

In my mind it is a signal that NW anticipates that something big (beyond a potential US/DL deal) is going to occur that would partially impact the details contained in the Disclosure Statement. Catch my drift?

 

[brokenwrench]

My opinion for what it is worth. I hope I am wrong on a couple of points, here goes.

Delta goes stand-alone after Bethune convinces the creditors that there is more value/less risk in Delta going it alone and merging with NW later. To put the creditors doubts about this at ease the DL BOD names Bethune Chairman of the Board.

US discovers that while they spent all this time and energy on a merger that did not go thru they now have a plate full of labor problems on the home front.

DL & NW merge in late 07 early 08.
UA & CO follow.
US orders a boat load of airbus wide bodies to grow their Atlantic routes on their own (what a concept). They also put in a bid for Alaska but are out bid by AA.

All the "experts" that once sang Doug's praises now criticize him for not taking care of his own before waste ting all this time and energy on a merger that did not happen.

 

[EyeInTheSky]

Whatever happened to "homegrown" companies? Why can't the company enlarge through internal growth? Hey, if US can get 5 billion in cash to pony up for another airline; you'd like to think they could get half that amount for a large aircraft order. There are a lot of airplanes sitting around it's time to think outside the merger box.

Later,
Eye

 

[gaucho99]

In my opinion, and I have no information on this, if US Airways does not complete the Delta merger Doug Parker will go to Plan "B" - Northwest Airlines.

US Airways' "executive suite" sees value in merging with a bankrupt carrier because of the financial flexibility available while an airline is operating under court protection in a "formal reorganization".

The Delta and Northwest merger's would be once in a lifetime opportunities to remove fixed costs that otherwise would not be available during a merger between two solvent companies.

I too thought Northwest would be a better fit, but after talking to Doug Parker and listening to Scott Kirby speak I now know the Delta combination would be the best fit. Parker's team began working on the Delta merger immediately after the US Airways "corporate transaction" was complete on September 27, 2005 because management believes it would provide the greatest profit potential (highest cost cuts, revenue gains, and economies of scale) and growth opportunity.

Regards,

USA320Pilot

The problem I see with Plan B is the fact that the reason Plan A might not happen will be due to the fact DL and NW merge. Then we would have to go to Plan C which I don't know what thatis. We'd be fresh out of bankrupt carriers to go after.