Due to the fact that there are 35 active threads on this topic, all previous ones are being locked and will be repaced with 'official' ones to help keep things consolidated and organized.
Leelaw From , joined Dec 1969, posts, RR: Reply 1, posted (2 years 2 days 10 hours ago) and read 6563 times:
Interesting article in today's WSJ:
"Lessons Learned? How US Airways Would Navigate Merger"
...Mr. Parker, though, is talking up the savings. A US Airways-Delta merger would cut overlapping flights and reorganize ground facilities, among other things, to bring about some $1.65 billion in annual cost savings, he said.
Increased size would be an advantage, not a burden for the airline, Mr. Parker said: "Size helps. The ability to take more people to more places is a critical factor in running an airline, so it certainly matters." The airline would also have more purchasing power when it comes to buying things such as new seats for aircraft or cups and napkins for in-flight service.
Still, adding Delta would bring more than 400 additional planes to schedule and maintain, 51,000 more employees, more complex technology to integrate or overhaul, and throngs of new customers (in terms of "passenger enplanements" -- a person getting onto an airplane -- Delta has about 119 million a year, nearly four times that of US Airways). "Because of the immense complexity of all the moving parts, the amount of planning is the single most important factor involved" in pulling off any merger, said Peter Walsh, director of New York-based Mercer Management Consulting's aerospace group.
Mr. Parker and his team say they are ahead of the game in planning if the Delta acquisition goes through. In the first merger they had to create an integration plan from scratch. But when they began contemplating a Delta combination months ago, they started going through each operating area to assess what would be different with Delta and what didn't work in the first merger.
"We've learned a lot of lessons. We'll do it better the second time around," said US Airways President Scott Kirby, who, like Mr. Parker, was an executive at America West before the merger...
N328KF From United States, joined May 2004, 5308 posts, RR: 4 Reply 2, posted (2 years 2 days 8 hours ago) and read 6435 times:
Quoting Diamond (Thread starter): This thread is for actual news reports relating to the proposed merger. Please make sure to follow copyright guideles mentioned in rule #10.
Congratulations. You've killed the threads.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
Litz From United States, joined Dec 2003, 1452 posts, RR: 0 Reply 3, posted (2 years 2 days 8 hours ago) and read 6415 times:
You can add to the "news reports" collection the full page ad Delta took out in today's Atlanta Journal-Constitution, which was in the form of a letter addressed to "Friends of Delta", and re-iterating Delta's intention to emerge from Bankruptcy as an independant, atlanta-based, air carrier.
There has been a huge negative reaction (gee, surprise) from the local, state, and Georgia's federal representatives/senators/governors/mayors/etc.
Delta is, after all, the largest employer in the state.
SPREE34 From United States, joined Jun 2004, 1299 posts, RR: 6 Reply 4, posted (2 years 2 days 8 hours ago) and read 6364 times:
Quoting N328KF (Reply 2): Congratulations. You've killed the threads.
I disagree. Start one. Title is US/DL Merger "Opinions and Discussion."
If someone wants news or has news to add, they come here. Comments or opinions can go to the other one.
This is a popular subject. I still see many threads coming. I think when someone starts another US/DL merge thread they should give it a specific header like the Mod has here. Don't duplicate other threads or start "me too" threads and I'll bet the perceived problem will go away.
I don't believe the Mod's intent here is to say "no more US/DL threads." If that is the Mod's intent, it's a position (my opinion) not inline with the purpose or spirit of the site.
I don't understand everything I don't know about this.
The US Airways Offer For Delta
The Variety Show Is About To Begin
Small Communities: Get Ready For Less Air Service
We'll probably have to wait for the debut of the circus that is sure to develop from the US Airways hostile offer for Delta.
There'll be dancing bears in the form of Wall Street analysts, jumping through hoops in perfect obedience to their handlers. Magicians making data disappear and re-appear in reality-defying forms. Puppet acts, too, with politicians doing routines dictated by whichever way the dollars may go
Yup, Ed Sullivan would be proud. So, unfortunately, would P.T. Barnum. That's because no how much glitz, glitter, promises and paid PowerPoint presentations will be spit out to hype this deal, it's still a bad one for the consumer.[/b
This Deal Is Not Comparable To the US/HP Combination
Much will be made about how the America West acquisition of US Airways is the poster-child for this Delta deal. Nothing could be farther from reality. [b]The hostile takeover offer from US Airways is a full-blown, bona fide, overlay merger - one that, as admitted by US Airways, will result in less, not more.
On the other hand, the acquisition of the original US Airways by America West Holdings was essentially an asset-purchase, and one that represented very little overlap.
First, in 2005, America West Holdings bought a dying carrier that represented very little route or competitive overlap. That's 100% different from this current deal, where there is competitive overlap up the whazoo, particularly in smaller communities that have near zip chances of getting new competition should this merger go through.
Second, in the first US Airways deal, HP acquired a carrier that for all indications was heading smooth out of business… That, too is 100% the opposite of what this hostile take-over of Delta represents.
Finally, it needs to be kept in mind that despite admirable progress, the integration of HP and US is not yet complete. Adding Delta into the mix - well, draw your own conclusions regarding the immediate operational "efficiencies" this might bring.
Amateur-Act Myths. Myth One: We Need Consolidation. Six months ago these folks were still claiming that the industry had "over-capacity." That being proven nonsense by high demand and 80% load factors, the tune has changed.
Supposedly, these folks now claim, there are too many seats out there to support a "healthy" airline industry, even if, at 80%+ load factors, everything is essentially full, and airlines are now pushing into the black.
More hypothetical nonsense. Not only is the system full, but for the first time in memory, comprehensive network airlines are well positioned for an economic downturn. but Congress and the DOJ will need huge on-going doses of this mind-numbing nonsense if they are going to eventually believe it.
Myth Two: Mergers Will Make Airlines Stronger, Causing More Mergers. Don't buy into the hype that there are huge immediate operational synergies in this deal that will render the New Delta a competitive wonder. The fleets are the economic equivalent of the Hatfields & McCoys. 777s and A-330s. 737s and A-320s.. To the creatures that inhabit some parts of the financial world, this means nothing. But when real-world realities of maintenance programs, training curriculums, parts inventories, not to mention union bid-and-bump issues, are considered, what this entity will represent on the day the merger is consummated will be one big wallowing marketing target for its competitors.
Myth Three: This Merger Won't Reduce Competition. this merger will decimate it.
Communities, politicians, and state AGs should be prepared this coming week for a Minnesota-denuding blizzard of paper "studies" and analyses, all purporting to represent that combining Delta and US Airways won't result in higher concentrations or in less competition.
Ray Charles could see through this one. We'll start with this: when you remove one consumer option, competition is reduced
Enter The Clowns. Remember, there are tens of millions to be made on this deal, so it won't go away, and there will be lots more entertainers brought in...
Politicians. The full-court press will be made on Congress. The promises will be flowing like muscatel at a wino convention to "maintain service, increase service, upgrade service," whatever it takes. Rep. James Oberstar, D-MN is slated to be the congressional honcho overseeing airlines. He's so far made less than favorable comments about this deal,
Academics & "Coalitions" - Follow the money. In some cases we found that it was one of the merger partners that quietly paid for a supposed "independent institution" to do its "independent study.".
Yeahbutt, These Guys Are Smart. The argument will be made that the management team at US Airways is at the top of the airline game, are proven visionaries, and are incredibly good at what they do.
All of it, based on historical, provable and factual results, is entirely accurate. Maybe even an understatement, particularly when one considers the state of America West when Mr. Parker assumed CEO and where it is today in its present form.
But that doesn't mean that visionaries can't make mistakes, nor that visionaries can't find themselves needing or wanting to do deals they might not otherwise do, simply due emergence of perceived or real market "opportunities." The open question is whether a hostile takeover of Delta is an "opportunity" that fits the current US Airways.
Windows of Opportunity? Not If They're 40 Floors Up. Even the best management has been vulnerable to mistakes. Remember Bob Crandall's "Value Pricing?" When that fiasco finally played out, American was out somewhere north of $300 million in lost revenue.
Back in ancient airline history, in 1978, the whiz-kid in the business was Harding Lawrence of Braniff. He had taken what was essentially a small relatively unfocused carrier, and transformed it into a high-profile potential international juggernaut. Banks were throwing money at Braniff, based on the track record of Mr. Lawrence. In the late 70s, Braniff was minting money, with break-even load factors well under 50%.
Then came some huge mis-steps subsequent to deregulation - caused by this visionary concluding that Braniff just had to jump through a window of opportunity. Three years later, Harding was history, and a year after that, after a dalliance with a "messiah" CEO who completed flying the airline smooth into the ground, Braniff International was gone.
More recently was Independence Air. The management team there was one of the most respected in the industry, again, with a brilliant track record. It is hard to believe that, once this team found the I-Air plan didn't work, they would stick to it until the airline had blown through $300 million or more and ran out of money. But they also saw a window of opportunity that they just had to take advantage of. This, unfortunately, could be the situation at US Airways - they feel this is an opportunity they can't pass up. It could be a dangerous one.
But after next Monday, the show will begin. Just remember, it's entertainment, and not necessarily a reality show.
HPRamper From United States, joined May 2005, 2086 posts, RR: 6 Reply 6, posted (2 years 2 days 4 hours ago) and read 6087 times:
Quoting Leelaw (Reply 1): Increased size would be an advantage, not a burden for the airline, Mr. Parker said: "Size helps. The ability to take more people to more places is a critical factor in running an airline, so it certainly matters."
This is absolutely true. One of our problems right now is that we don't have enough mainline aircraft for the routes and frequencies we want, and the painting schedule has also hurt matters.
Surfdog75 From United States, joined Nov 2005, 221 posts, RR: 0 Reply 7, posted (2 years 2 days ago) and read 5933 times:
I think the Boyd article is right on. Along with the Congress and DOJ, Delta's employees will also be a major hurdle. They have made massive concessions to help position the company for the future. They will not be happy seeing these painful concessions used to enrich some other airline's employees and execs. Delta people have almost nothing to gain and years and years of headaches ahead if this is allowed. With this combination it's pretty obvious how the "synergies" will be attained.
UA/DL or NW/DL, as much as I would hate to see it, makes much more sense than this. DL/HP before US maybe, but now it makes no sense except to eliminate capacity and competition. The capacity will be filled by Brand X as soon as it's reduced.
9V-SPJ From India, joined Dec 2000, 589 posts, RR: 0 Reply 8, posted (2 years 1 day 19 hours ago) and read 5809 times:
I don't know if this is a news article, but it is close to it:
A quote from the Delta Skymiles Seasons Greetings email:
"Going forward, Delta will evaluate US Airways' proposal carefully, as we are obligated to do. But you should know we are concerned that this particular transition would not be in the best interest of our many stakeholders, including our customers, employees, travel partners and the communities we serve."
Just reaffirming that Delta does not want this merger.
You have to admire Mr. Boyd's chutzpah - for all his huffing and puffing, tilting at some personal windmills, he is covering himself - he does not say it will not happen.
He is - mostly - playing, big time, to his own constituency.
But he is very, very entertaining. And a few of his darts hit.
Planemaker From Tuvalu, joined Aug 2003, 3475 posts, RR: 18 Reply 10, posted (2 years 1 day 16 hours ago) and read 5708 times:
Quoting LawnDart (Reply 5): Six months ago these folks were still claiming that the industry had "over-capacity." That being proven nonsense by high demand and 80% load factors, the tune has changed.
The politics angle aside (and that is a big factor in this proposed deal) Boyd's screed really leaves a lot to be desired. Gee, you'd think that someone with his background he would write a more logical (honest?) analysis of the situation. For example, domestic ASMs are down 2% from a year earlier... with reductions coming from the legacy carriers (while LCCs increased ASMs) and still carriers are struggling domestically revenue-wise (look at how hard it has been to increase fares). And he knows that is why they are shifting aircraft to better revenue overseas flights... but since this fact doesn't fit into his theory he pretends it doesn't exist and calls over-capacity "nonsense".
Surfdog75 From United States, joined Nov 2005, 221 posts, RR: 0 Reply 11, posted (2 years 5 hours ago) and read 5547 times:
Pilot union chief blasts US Airways' merger 'assault'
Carriers rally workers to their causes, report says some bondholders backing deal
By RUSSELL GRANTHAM
The Atlanta Journal-Constitution
Published on: 11/22/06
The head of Delta Air Lines' powerful pilots union says he doubts a "misguided" merger proposed by US Airways will work as well as advertised and could lead to harsh cutbacks.
"Should this merger be as misguided and as poor an idea as I currently believe it to be, then I will deploy every available resource to stop it," Lee Moak, chairman of Delta's Air Line Pilots Association unit, said in his first comments on the proposed merger.
Moak, in a letter to Delta pilots, said late Tuesday that the $8.8 billion buyout offer "appears to lack any substantial benefit for Delta, its employees, our communities, or our customers."
Moak's letter came the same day US Airways told its own employees that its buyout offer is "just better" than Delta's standalone recovery plan.
Meanwhile, Delta workers distributed anti-merger buttons proclaiming their desire to "Keep Delta My Delta."
Wednesday's edition of the Wall Street Journal reported that some Delta bondholders are banding together in support of the US Airways bid, which would have to win favor of at least some of Delta's big bankruptcy creditors to succeed.
The Journal report said Delta bondholders held conference calls Tuesday with Deutsche Bank and Lehman Brothers in an effort to form a group that could influence the larger creditors.
The report, citing people familiar with the situation, said the airline's official committee of unsecured creditors, which includes big creditors such as Boeing and major banks, is generally backing Delta management so far.
US Airways announced the offer last week after being rebuffed privately by Delta management, hoping to win enough creditor support to make the deal happen.
ALPA is a member of the main creditor committee in Delta's bankruptcy case, and it also would be heavily involved in sticky merger integration issues -- chiefly the blending of pilot seniority lists and work rules.
In his letter to pilots, Moak said the union is reviewing US Airways' proposal and hasn't taken an official position. But he voiced skepticism on numerous points. Moak noted that US Airways is still in the process of a merger with America West, a union that is "far from settled." He said regulatory approval could be tough to get given that the two airlines' biggest hubs, Atlanta and Charlotte, are only 250 miles apart.
Moak also said "synergies" touted by US Airways will require deep cutbacks. "Further, I am skeptical that many of these 'synergies' are anywhere near as attractive as US Airways would like Wall Street and our creditors to believe."
Moak, whose union has taken deep pay cuts as part of Delta's restructuring, said "we find ourselves in the unusual ... position of being on common ground with our management as our company comes under assault."
Other Delta workers also rallied around the cause of independence. Members of the airline's board advisory council began handing out the "Keep Delta My Delta" buttons on Tuesday and said thay also plan wristbands and t-shirts.
"These things are going over like crazy," said safety manager Christopher Muise, who helped hand out buttons at the airline's headquarters and at Atlanta's Hartsfield-Jackson International Airport until they ran out.
"We're doing this to show unity and support that we want Delta to remain in Delta control," said Muise, a member of the Delta Board Council, which represents employees as nonvoting members of Delta's board of directors.
US Airways, based near Phoenix, also sought to whip up employee support, issuing the first in what it said will be a series of merger newsletters called "For the Record."
"Our proposal is just better. For everyone," Tuesday's newsletter said.
US Airways said in its newsletter to employees Tuesday that the real question people should be asking is what provides the most value to Delta's creditors.
"Delta's standalone plan — no matter how good it may be — cannot possibly offer an expanded route network, more destinations and a better frequent flier program," US Airways said.
It also touted reaction to its buyout proposal on Wall Street, where both US Airways shares and Delta bond values are up since the offer was announced.
US Airways is still trying to set up a formal meeting with Delta's creditors, spokesman Phil Gee said Tuesday. Adding to the uncertainty surrounding the deal, Gee said the airline still has not decided where a combined US Airways-Delta would be based. Regulatory hurdles also would not to be overcome.
US Airways' public takeover bid proposes to give Delta's creditors $4 billion in cash and roughly $4.8 billion worth of US Airways stock, while cutting overall flying by the combined airlines by about 10 percent. America West took over US Airways as it exited a Chapter 11 reorganization in September 2005 and assumed its name.
Executives at Delta, which entered Chapter 11 proceedings about the same time, have said they will present a reorganization plan to creditors next month to remain independent. Some insiders and experts expect the company to be worth about $10 billion to $12 billion if it emerges next year from bankruptcy as a stand-alone airline.
Db373 From United States, joined Sep 2005, 215 posts, RR: 0 Reply 12, posted (1 year 12 months 2 days 3 hours ago) and read 5298 times:
I'm just curious to know whether there has been any reaction from the SkyTeam Alliance partners, specifically AF/KLM or CO. I don't think this merger would benifit AF, but is there any possible way AF could block the merger? And as for CO, though I know that they do not want to merge, the thinking could be that if US/DL can get through, why not a CO/DL? Furthermore, if US does succeed in taking over DL (Which I hope to God won't happen), then CO would, IMO, be adversely affected because of their East Coast orientation and their Atlantic dominance that they share with DL.
STT757 From United States, joined Mar 2000, 10246 posts, RR: 41 Reply 14, posted (1 year 12 months 2 days 3 hours ago) and read 5266 times:
Quoting Db373 (Reply 12): I don't think this merger would benifit AF, but is there any possible way AF could block the merger?
There's no way in heck a foreign company would be able to influence business transactions between two US company's, there's no significant foreign investment allowed in US carriers.
Don't take these alliances too seriously, there's no real comitment between carriers other than coordinating through passengers and offering complimentary reward programs.
As for CO they have no say either unless they wanted to make their own bid for DL which they will not, if CO were going to go through the headache of a merger they would merge with someone that brings to them what they don't already offer.
CO would merge with UAL or no one, UAL brings Heathrow, Narita, Denver, San Francisco and Los Angeles to compliment CO's EWR, IAH, Guam.
If the DL/US merger happens there will be oppurtunity for CO to bid on LGA assets the combined carriers would need to divest to clear regulatory hurdles.
"makes much more sense to live in the present tense"
Haggis79 From Germany, joined Jun 2006, 751 posts, RR: 1 Reply 15, posted (1 year 12 months 2 days 2 hours ago) and read 5179 times:
Quoting STT757 (Reply 14): Don't take these alliances too seriously, there's no real comitment between carriers other than coordinating through passengers and offering complimentary reward programs.
that may be true as long as you look only at US domestic traffic.... but I think that's different when it comes to intercontinental traffic... if AF looses DL as a partner they are gonna loose virtually ALL traffic to/from the US which does not go to/originate from an airport they are flying to directly from CDG - the vast majority of their connecting passengers go on with DL (of course that's not the whole truth either, as they most likely would look for a new partner rather quickly... be it NW or CO).
DL on the other side is in a slightly more comfortable situation... they can either stay with AF or "stay" (on US's side) with LH.... so whatever they do they have a European partner for connecting traffic. It's more like, IF the merger happens, they have two partners only one of which they can hold.
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