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Merger Brewing?  
User currently offlineRL757PVD From United States of America, joined Dec 1999, 4630 posts, RR: 12
Posted (10 years 4 months 3 weeks 3 days 2 hours ago) and read 3451 times:

Im not usually one to start rumors or silly topics, but i am curious what you guys out there think of the latest CEO changes at Delta.

Lets just throw out the facts:

1) Delta badly wants to get out of their pilot contract, one good way to do that is with a merger.

2) Leo Mullin's replacement was known before he even stepped down, it took Delta months to find Mullin.

3) Gerald Grinstein has been the mastermind of two major mergers in the past, Western And Delta, and Burlington Nothern and Santa Fe. I find it odd that an airline would appoint a 71 yr old CEO unless they only needed him for a transition.

4) Delta employees have been told to expect new uniforms by 2005/6.

Anyone have any oppinions on this?



Experience is what you get when what you thought would work out didn't!
34 replies: All unread, showing first 25:
 
User currently offlineAA777MIA From United States of America, joined Aug 2003, 686 posts, RR: 3
Reply 1, posted (10 years 4 months 3 weeks 3 days 2 hours ago) and read 3412 times:

Merger with who??? Am I missing something?

User currently offlineAa757first From United States of America, joined Aug 2003, 3345 posts, RR: 8
Reply 2, posted (10 years 4 months 3 weeks 3 days 2 hours ago) and read 3394 times:

Are you assumming Delta is being taken over or Delta will take over?

User currently offlineLuv2fly From United States of America, joined May 2003, 12090 posts, RR: 50
Reply 3, posted (10 years 4 months 3 weeks 3 days 2 hours ago) and read 3387 times:

Who or what airline would want DL's massive debt?


You can cut the irony with a knife
User currently offlinePiedmontGirl From United States of America, joined Nov 2003, 1124 posts, RR: 13
Reply 4, posted (10 years 4 months 3 weeks 3 days 2 hours ago) and read 3336 times:

Luv2fly, that's what I'd like to know: Who or what airline would want DL's massive debt? Not only that, who could afford it?


User currently offlineDutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 57
Reply 5, posted (10 years 4 months 3 weeks 3 days 1 hour ago) and read 3308 times:

While there is a theory that the US airline industry, especially the traditional full-fare carriers, are headed toward another round of mergers, I cannot imagine it happening or the US government allowing it to happen. The major airlines have serious financial problems which make them unattractive merger partners.........as stated above, who would want DL's massive debt load. With most of the other airlines also dealing with a huge amount of debt and sluggish revenue, they have no resources to go out and by DL or any other airline at this time. If 2 airlines went off together and merged on a stock-swap basis (ie, no cash changing hands), there may be some efffencies but, as we have seen, intergrating 2 airlines take time, costs a fortune, and in the end may or may not work. I dont think that anyone is going to take that risk at the moment.

Who could merge with DL?
a. UA - in bankruptcy and trying to find a business plan that will let it survive.
b. US - also just out of bankruptcy and yet to show a profit.
c. CO - has stated it would prefer to stay independent and certainly does not want DL's labor and other problems.
d. NW - what would it gain? And, no way would the governmental agencies allow one airline to control the pacific.
e. AA - almost went bankrupt and is still recovering from the TWA deal.
f. Southwest - they have done quite well on their own.

Maybe the remarks mean that DL will reinvent itself, DL seems rather happy with SONG, and is trying out new one-class services on certain routes, and the airline will have a whole new look and approach. Anything can happen!


User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 6, posted (10 years 4 months 3 weeks 3 days 1 hour ago) and read 3188 times:

1) Delta badly wants to get out of their pilot contract, one good way to do that is with a merger.

Great idea... get out of the [relatively] low expense of an inflated pilot contract using the [enormous] expense of a merger/acquisition  Smile


User currently offlineAlphascan From United States of America, joined Nov 2003, 937 posts, RR: 13
Reply 7, posted (10 years 4 months 3 weeks 3 days ago) and read 3083 times:

Mergers are too risky today because of the uncertainties of governmental red tape, union infighting, culture shock, etc. Too bad UA and US were slow to figure that out. Alliances reduce that risk considerably.

Gerald Grinstein was hopefully chosen for his abilities, but I doubt his merger experience was one of the top considerations.



"To he who only has a hammer in his toolbelt, every problem looks like a nail."
User currently offlineSsides From United States of America, joined Feb 2001, 4059 posts, RR: 21
Reply 8, posted (10 years 4 months 3 weeks 3 days ago) and read 3040 times:

While I don't think it will happen, it is a greater possibility than people think. A true "merger" is quite different than the recent consolidation activity that has taken place. The AA-TWA deal was a straight acquisition of TWA by AA, and the UA-US deal had a similar structure. These were both outright takeovers.

A merger is different. Companies who merge don't have to put up much financing or other capital to cover the cost. Instead of one company absorbing the other, the two companies become a single new entity. This is very different from what happened with AA and TWA, with AA and Reno Air, with Delta and Western, and what would have happened with US and UA.

That being said, it is still an expensive proposition. You have to pay millions to consultants, lawyers, accountants, lobbyists, and other logistical personnel. In addition, I don't really see a partner that would suit DL, perhaps with the exception of CO (and even that has problems). In short, I don't think it will happen, but DL needs to get its act together if it is going to survive. Last quarter was a disaster that no one really expected.



"Lose" is not spelled with two o's!!!!
User currently offlineFA4UA From United States of America, joined Nov 2003, 812 posts, RR: 20
Reply 9, posted (10 years 4 months 3 weeks 3 days ago) and read 3021 times:

Sorry DutchJet: I disagree to your statement...
NW - what would it gain? And, no way would the governmental agencies allow one airline to control the pacific.

UA and NW are the dominant US carriers in the Pacific. NW would gain LOTS with the DL's reach into Europe and South America. DL has very little service in the Pacific market and would gain a wonderful network there.

I bet if anyone were to merge it would be NW and DL. I doubt anything will happen too soon though with all the financial pain out there!

I do find it very odd that they named a 71 yr old the replacement for Mullin... that's kinda fishy!

just my 2 cents

FA4UA



The debate continues... Starwood or Hyatt... which is better
User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 10, posted (10 years 4 months 3 weeks 3 days ago) and read 3005 times:

I bet if anyone were to merge it would be NW and DL.

Complementary hub locations and route networks sure... but about the only common factor in their fleets are the PW-powered 757s.


User currently offlineFA4UA From United States of America, joined Nov 2003, 812 posts, RR: 20
Reply 11, posted (10 years 4 months 3 weeks 3 days ago) and read 2891 times:

You're right Concordeboy! I was just thinking about the business and route side of things, never mind the integration of the fleet! That would be a mess! Plus it would take at least twenty years for them to repaint the whole fleet (given the current color schemes flying out there)!

could you just imagine the deltaflot colors on the A319 taxiing around at MSP?

(shudder)

FA4UA



The debate continues... Starwood or Hyatt... which is better
User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 12, posted (10 years 4 months 3 weeks 3 days ago) and read 2872 times:

yeah, that'd be a big part of it...

would just love to see DL colors on those A330s though, particularly the incoming -200s  Big grin


User currently offlineTekelberry From United States of America, joined May 2003, 1459 posts, RR: 4
Reply 13, posted (10 years 4 months 3 weeks 3 days ago) and read 2833 times:

You'd have to look at fleet commonality as well. The only airline out there that has a similar fleet to DL's is CO.

User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 14, posted (10 years 4 months 3 weeks 3 days ago) and read 2798 times:

um... so then, what's AA's fleet like?  Big grin

User currently offlineRL757PVD From United States of America, joined Dec 1999, 4630 posts, RR: 12
Reply 15, posted (10 years 4 months 3 weeks 3 days ago) and read 2782 times:

The only one that I could think of would be DL and CO,

Common fleet types

DFW moves to IAH
CLE moves to CVG
EWR becomes the INTL gateway

Now, perhaps it may not be a merger, but what other ways are there to restucture the company and legally void the contracts? All signs point to that as what Delta wants to do. Can they create some kind of company on paper then merge to change the companies structure? The vibe that i get from Delta employees is that something is up, and its not to the benefit of the employees.



Experience is what you get when what you thought would work out didn't!
User currently offlineToxtethogrady From United States of America, joined Dec 2000, 1013 posts, RR: 0
Reply 16, posted (10 years 4 months 3 weeks 2 days 23 hours ago) and read 2762 times:

DL and CO have been pursuing each other for years, off and on. Usually the talk is of DL being the surviving carrier, but the fortunes of the two have been reversed in the intervening five years since the last set of merger talks. I still don't see anything happening.

Further note: Merging does not end contract obligations.


User currently offlineStevenUhl777 From , joined Dec 1969, posts, RR:
Reply 17, posted (10 years 4 months 3 weeks 2 days 23 hours ago) and read 2729 times:

I think we're really getting ahead of ourselves here!

If a merger/takeover does occur, as I and many others have already said, we're at least 2 years away, simply because only LCC's are profitable, and the networks are barely trying to get back on their feet after 9/11 and the bad economy.

While for very different reasons, I think that the Grinstein era at Delta will be short, as with Jack Creighton at UAL. Creighton was at UAL for what, a year maybe? I think that Grinstein will only be there for a short time, maybe a year or two, just long enough to get the pilot salary issue resolved somehow, and until the board can get a seasoned CEO in that can lead Delta forward.

Just my .02, for whatever that's worth, which is probably nothing!  Big grin


User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 18, posted (10 years 4 months 3 weeks 2 days 23 hours ago) and read 2721 times:

In DL/CO's last merger attempt, CO would have had to be the survivor.... otherwise, NW could veto any such effort.

User currently offlineAa757first From United States of America, joined Aug 2003, 3345 posts, RR: 8
Reply 19, posted (10 years 4 months 3 weeks 2 days 23 hours ago) and read 2692 times:

If DL and CO were to merge, they would become a US - Europe powerhouse, correct?

User currently offlineSrbmod From , joined Dec 1969, posts, RR:
Reply 20, posted (10 years 4 months 3 weeks 2 days 23 hours ago) and read 2632 times:

I don't think Delta is hunting for a merger partner. Grinstein is pretty much a short-termer in the CEO position. Delta's board probably felt that they needed to get someone with airline experience in the CEO seat for the short term to help Delta settle some issues it is facing. Odds are that within three years, Jack Smith will be running the whole show at Fort Widget.

User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 21, posted (10 years 4 months 3 weeks 2 days 23 hours ago) and read 2597 times:

Jack Smith will be running the whole show at Fort Widget.

and our dear friend Freddie is supposed to just bend over and let that happen..?


User currently offlineTekelberry From United States of America, joined May 2003, 1459 posts, RR: 4
Reply 22, posted (10 years 4 months 3 weeks 2 days 23 hours ago) and read 2555 times:

If DL and CO were to merge, they would become a US - Europe powerhouse, correct?

Not necessarily.

[Edited 2003-12-01 03:34:05]

User currently offlineToxtethogrady From United States of America, joined Dec 2000, 1013 posts, RR: 0
Reply 23, posted (10 years 4 months 3 weeks 2 days 23 hours ago) and read 2535 times:

"If a merger/takeover does occur, as I and many others have already said, we're at least 2 years away, simply because only LCC's are profitable, and the networks are barely trying to get back on their feet after 9/11 and the bad economy."

In two years, if the industry really does recover, there will be less desire for carriers to merge. Mergers at this point are the belief that two leaning cards can prop each other up.

As for Fred Reid, he will be late for the door, and most of the employees will tell him not to let it hit him in the ass.


User currently offlineFjnovak1 From United States of America, joined Apr 2000, 601 posts, RR: 2
Reply 24, posted (10 years 4 months 3 weeks 2 days 23 hours ago) and read 2506 times:

ummm, no actually, DL is HUGE in the US-Europe market...they lead it along with CO, although I am not sure which one is first....Probably DL because while they may not serve as many destinations as CO, they also fly 763s in markets where CO has 757s....So DL may have more seats across the pond...


Go Blue!!
25 Tekelberry : ummm, no actually, DL is HUGE in the US-Europe market...they lead it along with CO, although I am not sure which one is first....Probably DL because w
26 RamerinianAir : This is the way I see it: Delta is one of the if not the largest Airline on the basis of passengers served per year. They don't need to merge with any
27 Luv2fly : Jetblue- Neileman does have a habit of selling after proving him-self.(Twice-Once to WN and again to Air Canada) Hello, it was June Morris who sold to
28 Airdude66 : Ithink AirTran will take over Delta and control Hartsfield.
29 Post contains links Jessman : Regarding the transatlantic situation, Delta is the leading US carrier to Europe, according to it's news releases. http://www.delta.com/home/press/tac
30 Deltabobo : You guys are sounding like Delta is in the same financial situation that TWA was in when they were taken over by AA. You are WRONG!!!! Delta is still
31 Iflewrepublic : Awww....Delta is issuing new uniforms in 2005/6? Will we not see the Lesbian bowling team flying the skies? Bummer, dude! I know I'm gonna get raked o
32 Srbmod : Jetblue- Neileman does have a habit of selling after proving him-self.(Twice-Once to WN and again to Air Canada) WestJet is not owned by Air Canada, i
33 Flashmeister : If there's a merger brewing, I could see it in the LCC space For instance, F9 + B6. No way would that trigger antitrust. Same fleet. Somewhat compleme
34 Dc10guy : Well, Jupiter is aligned with Mars, the moon is in the seventh house. I would say that's proof positive that Delta will be buying America west ....
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