Jmc1975 From Israel, joined Sep 2000, 3253 posts, RR: 15 Posted (10 years 1 month 4 weeks 3 hours ago) and read 3888 times:
It's no mystery the current financial status of the US airline industry suggests that the legacy air carriers have a long and painful road ahead of them before any profitability can be seen. One logical merger is that of Delta and Continental. These two money-losing airlines can both combine their assets and trim the excess fat of to form one profitable and premium airline. Here are some examples of what should be executed in such a merger:
+ The name is Delta Air Lines, which also operates Delta Connection and Delta Shuttle. Song will have played its last tune due to demand of premium air service in the markets, therefore mainline Delta will take over some of those routes.
+ Gordon Bethune is Chairman and CEO
+ Headquarters in Atlanta, Georgia with a reduced Sr. Management headcount from the two combined airlines.
+ Primary hubs in Atlanta, Houston and Newark. Secondary hubs consist of Cincinnati and Salt Lake City.
+ Atlanta and Salt Lake City will see virtually no change in service from current levels, except Continental will be gone.
+ Houston and Newark will see the current level of service that Continental has, except it's now served by Delta.
+ Dallas/Ft. Worth will be operated primarily as an O&D airport to Delta's primary and secondary hubs plus point-to-point service to LAX, SFO, BOS, LGA, PHL and DCA.
+ Cleveland will be absorbed by Delta's Cincinnati hub, therefore only nonstop service to ATL, IAH, CVG and EWR.
+ Cincinnati will be at approximately current levels, however, the increase from the absorption of Continental's Cleveland hub will be offset by the increased connectivity at Houston.
+ New York JFK will be scaled back significantly in favor of the Newark hub. JFK will only see service to the primary and secondary hubs and the transcontinental nonstops to LAX will remain. International Skyteam partners will continue to serve JFK.
+ The fleet will be streamlined to consist of Boeing 737-300, 737-500, 737-700, 737-800, 737-900, 757-200 (RR-powered CO 752s and 753s will be gone due inconsistency in the fleet), 767-200 (15 ex-DL 762s will be retired), 767-300, 767-400, 777-200 (RR Trent-powered DL 772s will be gone too) and MD-88s. The DL 737-200s and MD-90s will be gone from the fleet as well as the CO MD-80s. As profitability increases, expect to see MD-88s replaced with 737-700s and -800s, and also expect a significant order for the 7E7.
+ Delta could run Air Micronesia as a separate entity or sell it off all together.
It's inevitable that changes are in the air...they may be drastic. A DL/CO merger could potentially form one strong, high-quality airline. This would not be the death of Continental, but rather it's assets taking on the name of a larger compatibile air carrier that has served of our country well since 1929.
Goldentail From United States of America, joined Mar 2004, 75 posts, RR: 3
Reply 2, posted (10 years 1 month 4 weeks 2 hours ago) and read 3820 times:
Your synopsis is a fantasy.......
First off, why does CO become DL? If anything it would probably go the other way....CO has the marketing in place and is accepted as the premier airline in the U.S. today. You also need to realize that CO financially has it ducks in a row and has 1.6 billion in the bank. CO name also serves as a global name, and is widely known now in Europe as well as in Central / South America.
Not to say DL is not a good airline, but I don't see the fantasy you outlined happening anytime soon....first off the govt won't allow it, can you remember them shutting down UA/US before 9/11??? Also alliances are proving the way to go, feeding each carrier revenue without the mess of integrating labor forces which typically ruins an airline for years.
And even if DL was to remain in lieu of as you have suggested, you are very mistaken to think the combined airline would ditch Air Micronesia. That is a profitable part of our company that has no real competition. I hardly think it will be sold.
While your thread has entertaining value....it's flawed from a realistic standpoint.
Jmc1975 From Israel, joined Sep 2000, 3253 posts, RR: 15
Reply 3, posted (10 years 1 month 4 weeks 2 hours ago) and read 3808 times:
OK, let's say it went the other way and the merged company were to become Continental. I'd have no objection to that (like it matters) . Wouldn't that still be better than the status quo and both carriers dying a slow and agonizing death? Why wouldn't the US gov't permit it? Why do you think airline CEOs have recently testified before Congress about the state of the industry?
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 34
Reply 4, posted (10 years 1 month 4 weeks 2 hours ago) and read 3801 times:
Why do you think airline CEOs have recently testified before Congress about the state of the industry?
To try and get the government to take some of the burden of security costs from the airlines. Let's face it, Al Qaeda is not at war with UAL and AA, they are at war with the USA in general, yet the government will not pay the bill for protecting the airlines even though it is clearly a national security issue not an airline issue.
Secondly to lobby to get the government to try and do something about the sky high fuel prices.
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 34
Reply 6, posted (10 years 1 month 4 weeks 2 hours ago) and read 3773 times:
Isnt CO owned by Northwest? Shouldnt they merge.
While they were never "owned" by NW did own a large amount of the oustanding shares of the company. Just prior to 9.11, Continental bought the shares back from NW and now NW no longer owns any relevent amount. I do believe that NW still has a veto right over and Continental merger.
UA2162 From United States of America, joined Apr 2004, 495 posts, RR: 2
Reply 9, posted (10 years 1 month 4 weeks 2 hours ago) and read 3760 times:
First, like many people have already mentioned, it would be stupid to take the DL name.
Second, this merger would hurt Micronesia. The only real decent service that is offered is done so through CO. If DL were to merge with CO, I am afraid many of the Micronesian routes would be forgotten.
Third, CO would be crazy to merge with an airline at the brink of bankruptcy.
Lastly, I think SLC would take a big hit also. Wouldn't CO want to route most of their flights through DFW?
M404 From United States of America, joined Nov 2003, 2224 posts, RR: 5
Reply 10, posted (10 years 1 month 4 weeks 1 hour ago) and read 3744 times:
I've been saying a tie up among DL/CO/NWA was a real possibility since 1986. The present partnership proceedings would make me think I was not alone. But a merger. Not in the present atmosphere. Why should they? Mergers are incredibly expensive and take forever to produce tangible benefits much less profits. Employee integration is a real b---- what with different rules and unions. A carrier without a union (in a classification) and one without is no better. Upper management conflicting and kissing up to get their piece while ignoring the operation happens all the time.
No, mergers are ugly. I'll bet rules that are forever changing to benefit corporations will evolve that make mergers even less attractive.
Less sarcasm and more thought equal better understanding
NWDC10 From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 1 month 4 weeks 1 hour ago) and read 3739 times:
I think Co will do better in the future. They have tighter control of the airline and i do see profits for them in the future. Seems to me DA has no controll over the airline. It is being pulled apart as everyone is not really working together like CO is. A "united" airline will be strong and stay together. A "divided" airline will simply fall. I'd personally hate to see these two airlines merge. They both can fly apart from each other even if one fails in the future. But i also hope for the best for both of them. Robert NWDC10
Ord From United States of America, joined Jul 1999, 1381 posts, RR: 1
Reply 14, posted (10 years 1 month 3 weeks 6 days 19 hours ago) and read 3601 times:
I wouldn't completely rule this one out. At an aviation conference about two weeks ago Bethune (of CO) and Arpey (of AA) both agreed that consolidation via merger would happen among the major carriers. They felt within a few years the "Big 6" would be down to three or four. You can bet if they're making these comments in public they're also talking behind closed doors about the future. Assuming US Airways either goes under or gets absorbed somehow by another airline, that still leaves one or two mergers left to go.
CO and DL do have a good fit. If it happened, I see the main hubs as ATL, IAH and EWR. CVG I believe would stay as is while I think CLE would go...CVG is the far larger hub with more mainline and international service. Oh, and SLC would remain as is. My feeling also is that the DL brand is stronger overall and should be the surviving name.
Nobody knows, of course, what will happen, but it is fun to speculate. Don't forget also that back in the 1980s DL took a serious look at merging with NW (before Republic did), so that may be a possibility also.
Bethune and Arpey also predicted consolidation among the LCCs as well.
Luv2fly From United States of America, joined May 2003, 12090 posts, RR: 49
Reply 15, posted (10 years 1 month 3 weeks 6 days 19 hours ago) and read 3594 times:
If anything DL would become CO like others have pointed out. The weakest player is not about to take over a much stronger player at this stage in the game.
A few things that IF and that is a big IF, CO and DL managed to merge is, and these are my thoughts only.
#01. CVG would win over CLE, as much as I hate to say that living in CLE, CVG just has more to offer as an airport.
#02. JFK would be gone and replaced with EWR.
#03. ATL would not be affected at all.
#04. Song would have sung her last Song.
#05. All the connection carriers would be merged into Express Jet and become Express Jet.
#06. The Shuttle would remain as is just become a CO paint job.
#07. Growth at SLC would happen to support the new mega carrier.
#08. DFW would be downsized even more.
Of course this is all fantasy as airline mergers of this size are a thing of the past.
STT757 From United States of America, joined Mar 2000, 16822 posts, RR: 51
Reply 16, posted (10 years 1 month 3 weeks 6 days 19 hours ago) and read 3567 times:
Continental would definetly be the parent Company, and the brand name.
CO's management would assume control over both companies, with the corporate headquarters moving to Atlanta.
DL's JFK operations that don't overlap with CO's EWR flights (Nice, Athens, Barcelona, Moscow, Venice) would move to EWR, the other JFK routes that do overlap with CO's flights from EWR would be dropped and the aircraft transfered to EWR and IAH to launch new routes such as IAH-Madrid, IAH-Frankfurt.
Some operations would remain at JFK, although not on the current scale. CO may launch a JFK-Tel Aviv flight for instance.
ATL remains untouched, IAH gets some 767-300s from the scaling back of the JFK operation, EWR also gets some 767-300s from the scaling back of the JFK operation.
CLE or CVG would need to be consolidated into one another.
DFW would need to be downsized further, sell the gates to Airtran who are planning a major expansion at DFW.
DL's current situation dictates that a straight up merger with CO is out of the question, hence DL would need to go through bankruptcy and CO aquire parts of DL in bankruptcy court.
Scottb From United States of America, joined Jul 2000, 6712 posts, RR: 32
Reply 20, posted (10 years 1 month 3 weeks 6 days 17 hours ago) and read 3386 times:
First of all, Delta needs to get its house in order before any sort of merger could be considered. Unless DAL's assets were purchased as part of a liquidation sale (unlikely at this point), the combined carrier would likely still be stuck with Delta's pilot costs, given that they are the larger group, and CAL wouldn't be profitable with that, either. And in any case, the existing alliance gives them most of the benefits of a merger without all the integration nightmares.
Bethune wouldn't be the chairman since he's retiring at the end of the year. I will miss his quotes -- my favorite recent one being "I don't think that painting our planes yellow and calling ourselves Al" (is going to make much difference).
A hypothetical combined airline would likely be forced to sell the Delta Shuttle, given that it would have two of the three significant WAS-NYC-BOS operations (CO operates hourly or near-hourly service from EWR to BOS and DCA). An additional sale of assets at LGA might also be required, again due to NYC-area market concentration.
The fate of CLE and/or DFW would likely be determined by the ability of a combined company to get out of long-term leases, as well as the inherent profitability of each market. It would make sense to continue to maintain each hub (CLE especially) if the combined company were able to fill the planes with mostly O&D traffic to each hub. Routes that are largely filled with connecting traffic at CLE and DFW would get the axe. JFK might be scaled back, but EWR has a problem with limited peak-hour airfield capacity; it could also be argued that the two airports serve somewhat different markets for dense NYC-Europe routes.
The thing is, no one right now (aside from Southwest and maybe jetBlue) has the financial resources to go out and buy anyone else whole. You might see different airlines picking up pieces of a liquidated carrier (US Airways is the #1 candidate here), but the network carrier business right now boils down to who has enough cash to stay alive the longest. Throwing a bunch of money at a merger which gives few benefits over and above the existing alliance is STUPID.
SESGDL From United States of America, joined Jan 2001, 3466 posts, RR: 10
Reply 21, posted (10 years 1 month 3 weeks 6 days 15 hours ago) and read 3299 times:
I don't know where you all get off that CO is more well known than DL. You're talking an airline that carries 105 million passengers being swallowed up by one half the size that carries 45 million. Have you ever heard of an airline merger where the smaller airline takes over the corporate name and image. DL is a key player in the world, and is definitely more recognized throughout the US than CO. That's absurd that DL would lose its name. If CO took over AA, would CO keep the name then? No, AA, UA, and DL are probably the most well-established, well-recognized carriers in the US. Also, whoever mentioned that ATL would be downsized is smoking. You're talking downsizing the largest hub in the world, as well as the highest revenue yielding hub, with the most flights, to the most cities, at the 9th largest O&D city in the US. Don't forget the two were going to merge in 1998, and DL would take over CO, NOT the other way around. Also, who mentioned the Shuttle being scrapped? That is hilarious! The Shuttle is one of DL's and US's biggest assets. You all must be smoking something.
DCA-ROCguy From United States of America, joined Apr 2000, 4490 posts, RR: 33
Reply 22, posted (10 years 1 month 3 weeks 6 days 14 hours ago) and read 3267 times:
CO-Delta would not happen, because of anti-trust issues. Both airlines are strong in the East, and DOJ isn't going to let two of the three network carriers that have decent East Coast networks merge. Remember, the regulators--and lots of Congresscritters from communities that would be affected--live in the East.
And as several have noted, network carriers don't have a financial motive to merge nowadays. Better to let the weakest fold, let their labor agreements die out, and then buy up the desirable pieces. And hire any employees under the buying carrier's labor agreements. As noted above, *no one* is going to want Delta's pilot contract, and since they're the largest pilot group in a DL-CO merger, their agreement would stay.
Of course, given the sheer incompetence manifest by much of network-carrier management in the past decade, two network carriers might attempt a merger. But there's no rational financial incentive for them to do so.
Scottb From United States of America, joined Jul 2000, 6712 posts, RR: 32
Reply 23, posted (10 years 1 month 3 weeks 6 days 14 hours ago) and read 3235 times:
"Also, who mentioned the Shuttle being scrapped? That is hilarious! The Shuttle is one of DL's and US's biggest assets. You all must be smoking something."
Nope. The Shuttle's not such a great performer anymore, what with increased security hassle and Acela being very competitive for total travel time from city center to city center, especially from NYC to D.C. Why do you think Delta put the 733's (instead of 738's) on its Shuttle while US Airways runs mostly two-class A319's and 733's (instead of the single-class A320's)? The values being placed by analysts on US Airways' Shuttle operation (mostly the slots and gates) were around $100 million -- about one-third of what they paid several years ago.
But that's not even germane to why a combined DL/CO would have to sell the Shuttle. The U.S. government would not allow them to retain the Shuttle in light of CO's BOS-EWR and DCA-EWR routes. And as DCA-ROCguy said, there would be even more serious antitrust concerns raised than the ones seen when the UA-US merger was proposed.
Dl021 From United States of America, joined May 2004, 11446 posts, RR: 76
Reply 24, posted (10 years 1 month 3 weeks 6 days 14 hours ago) and read 3215 times:
The current alliance that is currently in effect will give many of the advantages of a merger without the drawbacks. DL and CO considered a merger not long ago and the idea was tossed out. DL does have a very desirable route structure and name recognition, notwithstanding the opinions of CO employees and fans, so their name would be more desireable, but CO is in a better financial situation apparently and they would have no real reason to want to merge, unless it was very favorable for them to do so, and if the situation at DL was all that great in the first place we woul dbe back to wondering if DL was going to swallow up someone (like CO).
Is my Pan Am ticket to the moon still good?
: "DL and CO considered a merger not long ago and the idea was tossed out." That was because Bethune was not happy with the way Leo Mullin was treating
: "757-200 (RR-powered CO 752s and 753s will be gone due inconsistency in the fleet)," Probably not. When you think about it, CO's 757s are MUCH younger
: "Really fun for the spotters... I am glad you aren't serious." Spotters? Are you serious? Since when did spotters matter to the overall scheme a busin
: Yeah, Mullin is an accountant, and one with seemingly little personal sales ability. He sure managed to enrage DL employees with ill-considered, bankr
: Delta management will say and do anything to break the cutrrent Pilot contract. There will be a lot of gossip about Delta/Bankruptcy, but it will not
: + Gordon Bethune is Chairman and CEO Our beloved Gordon is retiring at the end of this year. I can't recall who the new CEO will be. Have you ever he
: "No one in the media or delta management never talks about what the other employees have given up since 9/11 and the war." I'm a Delta fan, but it doe
: I'm convinced! I'll book my next flight on Deltanental or Continelta.
: Aa757first, Valujet's name change to AirTran was because of the crash in Florida, they wanted to rid their Valujet name from the company. DL has no re
: In 1998, things were a lot different. Both carriers were scoring record profits, but obviously Delta was the stronger of the two airlines. Either way,
: Delco? Are you joking? How come I never heard a thing about that? Jeremy
: Maybe you weren't paying attention, but that's what the proposal was.
: 777gk, what's this buzz about CO converting a single further 772ER? I didnt even know they had an outstanding option, if it's true. Or is it just furt
: I'm not 777 crew anymore, so if a rumor like that were to surface, I wouldn't know about it right away, but I'm friends with some 777 guys, I'll check
: 777gk, Know Herb H. on the B-777 at EWR? Nick
: The pilots contract needs to be broken. It is not in line with industry rates. You can't just go and break a pilot contract...there's a Pilot Union in
: Where I come from, Delco is the name of a unit of General Motors that makes various mechanical parts for GM cars. They have a plant in Rochester. Jim
: I use ACDelco parts in my Chevys They're quite big... A pilot seniority list merger would be terrible...it'd be ALPA-ALPA, so it'd be by hiredate...wh
: Well that Delco thing mentioned is obviously bull, cuz no one seems to remember it except 777gk, and that's already a company name. Anyway, why would
: Well Jeremy, if you had checked out 777gk's profile, you'da known he's a real-life Continental 764 pilot....and more than qualified to answer the ques
: Have you ever heard of an airline merger where the smaller airline takes over the corporate name and image... Yep. Texas International took over Conti
: I highly doubt that one of either airline would ever give up their names! Both are well known and respected names that stand for quality air travel, w
: I agree with many of you; such a merger will never happen. If it did, CO is the stronger player by far. There is no way they would take the DL name. S
: Sccutler, Texas International kept Continental's name and corporate image. StarCruiser, Do any of you understand anything about business management an
: Is that something going on with DL & CO are already codeshare?
: Have you ever heard of an airline merger where the smaller airline takes over the corporate name and image Another example would be ValuJet, who took
: cboy Yeah, but that was for a fatal image problem. Valujet had not real value (no wordplay intended) in its name at that point...so buying Airtran and
: SESGDL- I wouldn't make something like that up. That's what it was, if the 1997-1998 merger went through, the new carrier would be called Delco Airlin