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Delta-Northwest Merger On Mineta's Wish List  
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48
Posted (8 years 6 months 3 weeks 6 days 1 hour ago) and read 6336 times:

U.S. Transport Secy. Norman Mineta suggests Delta-Northwest merger. I am tempted to buy both stocks-currently both stocks are less than dollar- in the hope that at least one of them will survive and provide a big return over the next five years. Any advise? Link:
http://www.forbes.com/facesinthenews...0autofacescan15.html?partner=links


Quotes:
The U.S. transportation secretary addressed a throng of business leaders in Shanghai on Tuesday, where he mused about the future of the troubled American air sector. According to media reports, the chief of America's planes, trains and the roads used by automobiles opined that the latest generation of industry revamping could lead to a merger between Chief Executive Gerald Grinstein's Delta Air Lines (otc: DALR - news - people ) and CEO Douglas Steenland's Northwest Airlines (otc: NWACQ - news - people ).

"I sometimes wonder whether or not...Delta and Northwest will come out as a merged carrier," Mineta was quoted as saying. He added that he was just "thinking out loud." Respectively the No. 3 and No. 4 U.S. carriers, the firms both filed for Chapter 11 protection on Sept. 14. Spokesmen for the airlines demurred from commenting on Mineta's merger remarks. Instead, reports say, each firm maintained that it is focused only on restructuring.

29 replies: All unread, showing first 25:
 
User currently offlineHPRamper From United States of America, joined May 2005, 4059 posts, RR: 8
Reply 1, posted (8 years 6 months 3 weeks 6 days ago) and read 6267 times:

Buying stock would be iffy, even if one "survives", when HP and US just merged BOTH stocks were scrapped in favor of a totally new one. So you still might end up SOL.

User currently offlineIowaman From United States of America, joined May 2004, 4405 posts, RR: 6
Reply 2, posted (8 years 6 months 3 weeks 6 days ago) and read 6257 times:
AIRLINERS.NET CREW
FORUM MODERATOR

The huge problem if they ever merged was there aircraft couldn't be much more opposite. The only thing in common is the 757 I believe.


Next flights: WN DSM-LAS-PHX, US PHX-SJD.
User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5465 posts, RR: 7
Reply 3, posted (8 years 6 months 3 weeks 6 days ago) and read 6227 times:

Quoting LAXDESI (Thread starter):
I am tempted to buy both stocks-currently both stocks are less than dollar- in the hope that at least one of them will survive and provide a big return over the next five years. Any advise?

LAXDESI, as HPRamper said, the risk is huge that both of those penny stocks will be cancelled. If you want to take a flyer, buy some of their bonds. They represent a better chance to make you some money post-bankruptcy; but even bonds are still risky.

With that safety announcement over, those penny stocks DO go up and down with fairly big percentage moves. Since neither airline will come out of bankruptcy soon, there is time for short term trades (buy at 40 cents, sell at 60 cents) based on event-driven news. Proceed at your own risk.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12150 posts, RR: 51
Reply 4, posted (8 years 6 months 3 weeks 5 days 21 hours ago) and read 6134 times:

Quoting Iowaman (Reply 2):
The huge problem if they ever merged was there aircraft couldn't be much more opposite. The only thing in common is the 757 I believe.

An even bigger problem is DL is mostly a non-union airline, while NW is mostly union. The management styles are also very different.

I just don't see DL and NW in a merger. It would make more sense for NW to merge with AA and DL to merge with CO. But, I don't see those mergers on the horizon, either.

What is Norm Mineta thinking?

Quoting MasseyBrown (Reply 3):
Since neither airline will come out of bankruptcy soon, there is time for short term trades (buy at 40 cents, sell at 60 cents) based on event-driven news. Proceed at your own risk.

I agree.


User currently offlineAloha717200 From United States of America, joined Aug 2003, 4507 posts, RR: 15
Reply 5, posted (8 years 6 months 3 weeks 5 days 21 hours ago) and read 6105 times:

Meh, it wont happen and if it does I personally won't be too happy about it.

User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 6, posted (8 years 6 months 3 weeks 5 days 17 hours ago) and read 5963 times:

Quoting HPRamper (Reply 1):
Buying stock would be iffy, even if one "survives", when HP and US just merged BOTH stocks were scrapped in favor of a totally new one. So you still might end up SOL.

Yes true but only the old US shareholders were SOL (because US was in BK, not HP)...the HP stock was transferred to the new one at a particular rate of exchange.


User currently offlineHPRamper From United States of America, joined May 2005, 4059 posts, RR: 8
Reply 7, posted (8 years 6 months 3 weeks 5 days 17 hours ago) and read 5953 times:

Quoting Flyboyaz (Reply 6):
Yes true but only the old US shareholders were SOL (because US was in BK, not HP)...the HP stock was transferred to the new one at a particular rate of exchange.

Yeah wasn't it 50%?


User currently offlineTexan From New Zealand, joined Dec 2003, 4278 posts, RR: 52
Reply 8, posted (8 years 6 months 3 weeks 5 days 17 hours ago) and read 5921 times:

Quoting LAXDESI (Thread starter):
Any advise?

Don't buy airline stock.

The other question in all this mess is, since neither of the individual airlines involved have the capital to acquire Great Lakes much less a large airline, who would provide the needed capital for one airline to buy the other? What about the redundancy of hubs (CVG vs. DTW, MEM vs. ATL)? And I guess maybe a better question is this: since both airlines are money losing entities, what in god's name makes Mineta think that if they merged the result would magically be a money gaining entity? Kinda makes me wonder what planet Mineta is on right now.

Texan



"I have always imagined that Paradise will be a kind of library."
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48
Reply 9, posted (8 years 6 months 3 weeks 5 days 16 hours ago) and read 5804 times:

Thanks everyone for your suggestions/comments. I am inclined to buy these shares as I have done well with low price and leveraged shares/mutual funds over the years. I will balance my investments by buying a air transport sector mutual fund/ETF. I looked but could not find any airline mutual fund/ETF. Does anyone know of an airline mutual fund/ETF?

User currently offlineSrbmod From , joined Dec 1969, posts, RR:
Reply 10, posted (8 years 6 months 3 weeks 5 days 15 hours ago) and read 5784 times:



This article is two months old, and this topic has already been discussed back when this article first came out.

US Transport Chief Ponders Delta-Northwest Merger (by DAYflyer Jan 10 2006 in Civil Aviation)


User currently offlineCkfred From United States of America, joined Apr 2001, 5254 posts, RR: 1
Reply 11, posted (8 years 6 months 3 weeks 5 days 15 hours ago) and read 5784 times:

Quoting KC135TopBoom (Reply 4):
I just don't see DL and NW in a merger. It would make more sense for NW to merge with AA and DL to merge with CO. But, I don't see those mergers on the horizon, either.

AA won't be buying another airline for some time. First, it's track record with mergers is horrible. Air Cal, Reno Air, and TWA have not worked out at all well.

Second, buying another airline would ruin the labor relations that it has enjoyed since Arpey succeeded Carty as CEO.

Third, there is also no commonality in the two fleets. Even the 757s have different engines.


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5465 posts, RR: 7
Reply 12, posted (8 years 6 months 3 weeks 5 days 11 hours ago) and read 5023 times:

Quoting LAXDESI (Reply 10):
I looked but could not find any airline mutual fund/ETF. Does anyone know of an airline mutual fund/ETF?

I don't know of one. You could try XAL, an index option that is based on 10 airline stocks.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48
Reply 13, posted (8 years 6 months 3 weeks 5 days 10 hours ago) and read 4952 times:

Quoting MasseyBrown (Reply 13):
I don't know of one. You could try XAL, an index option that is based on 10 airline stocks.

Thanks for the tip. Unfortunately call options on XAL index have close to zero volume and zero volume for Leaps. I will have to settle for the broader air transport sector.


User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48
Reply 14, posted (8 years 6 months 3 weeks 5 days 10 hours ago) and read 4787 times:

Quoting MasseyBrown (Reply 13):
You could try XAL, an index option that is based on 10 airline stocks.

I am surprised that XAL index does not include United and US Airways.


User currently offlineBobnwa From United States of America, joined Dec 2000, 6483 posts, RR: 9
Reply 15, posted (8 years 6 months 3 weeks 5 days 10 hours ago) and read 4750 times:

Quoting Texan (Reply 9):
what in god's name makes Mineta think that if they merged the result would magically be a money gaining entity? Kinda makes me wonder what planet Mineta is on right now.

If you read what Mineta said, he made no reference as to whether it was a good idea or not for DL and NW to merge. Leaping to conclusions, might also qualify one to be on another planet!


User currently offlineSocalfive From , joined Dec 1969, posts, RR:
Reply 16, posted (8 years 6 months 3 weeks 5 days 9 hours ago) and read 4694 times:

Quoting LAXDESI (Thread starter):
U.S. Transport Secy. Norman Mineta suggests Delta-Northwest merger. I am tempted to buy both stocks-currently both stocks are less than dollar- in the hope that at least one of them will survive and provide a big return over the next five years. Any advise?

There's a 99.9% chance that both company's stock will be worthless at the end of their bankruptcys. Stock is almost always wiped out in favor of creditor assumption of equity. Especially in the case of NW, there is nothing left, the stock WILL cancel and IF they emerge from Bankruptcy at all, new stock will be issued at that time. So there is NO chance that buying stock and waiting for a merger or miracle will workout so DO NOT buy it!!


User currently offlineBluewave 707 From United States of America, joined Jun 2001, 3152 posts, RR: 6
Reply 17, posted (8 years 6 months 3 weeks 5 days 9 hours ago) and read 4666 times:

The lack of fleet commonality will drive up further training expenses as the DL folks will have to learn the NW Airbus fleet, and NW folks learn the DL Boeing fleet.

At least the US/HP merger had the A320 series, and the 737s as commons. Not the 757s in the sense that both had different engine types.



"The best use of your life will be to so live your life, that the use of your life will outlive your life" -- D Severn
User currently offlineChristao17 From Thailand, joined Apr 2005, 941 posts, RR: 8
Reply 18, posted (8 years 6 months 3 weeks 5 days 9 hours ago) and read 4492 times:

Quoting GeorgiaAME (Reply 7):
so that we never,ever give the impression that we might be hurting the feelings of certain minority groups that have a consistent record of blowing up passengers, shooting up airports, and flying airplanes into tall buildings.

That's not appropriate - no minority groups have any consistent record of blowing up passengers, etc. Those have been actions of individuals and small groups of extremists. Don't try to pin those actions on entire minority groups.

While I share your frustration at security measures that could be a lot more effective, stereotyping entire groups based on their culture or ethnicity just fans the flames of hatred that cause people to commit acts of terrorism.

Surely you wouldn't want others to stereotype Americans just because one guy blew up a bomb during the Atlanta Olympics and another blew up a Federal building in Oklahoma City, would you?



Keeping the "civil" in civil aviation...
User currently offlineSeeTheWorld From United States of America, joined Dec 2005, 1325 posts, RR: 4
Reply 19, posted (8 years 6 months 3 weeks 5 days 8 hours ago) and read 4351 times:

Quoting GeorgiaAME (Reply 7):
You have to remember that this great idea comes from the same guy who is responsible for babies in diapers and little old ladies in wheelchairs being thoroughly searched for handguns and carving knives in our airports, so that we never,ever give the impression that we might be hurting the feelings of certain minority groups that have a consistent record of blowing up passengers, shooting up airports, and flying airplanes into tall buildings.

COME ON FOLKS!!!

The TSA is under the Department of Homeland Security (DHS) not the Department of Transportation - GET YOUR FACTS RIGHT. The DOT and Mineta have virtually no influence on the TSA!!!


User currently offlineSrbmod From , joined Dec 1969, posts, RR:
Reply 20, posted (8 years 6 months 3 weeks 5 days 8 hours ago) and read 4315 times:

Quoting SeeTheWorld (Reply 20):

The TSA is under the Department of Homeland Security (DHS) not the Department of Transportation - GET YOUR FACTS RIGHT. The DOT and Mineta have virtually no influence on the TSA!!!

Prior to the formation of the Department of Homeland Security, the TSA was under the Department of Transportation. It was part of the DOT from it's creation on November 19, 2001 until March of 2003. It was during this time frame that many of the well publicized incidents occurred. So perhaps you may want to get your facts straight.


User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 21, posted (8 years 6 months 3 weeks 5 days 7 hours ago) and read 4055 times:

Quoting Socalfive (Reply 17):
There's a 99.9% chance that both company's stock will be worthless at the end of their bankruptcys

actually it will be a 100%, post bankruptcy, the stock never emerges unless it goes to the pink sheets and gets bought out..basically as a shell company.

only the creditors and the bondholders get something back....the shareholders of the company (i.e-stockholders) are last in line...

and there is more debt in their books than money that either NW or DL have, so that basically means there is less than .0001% chance that shareholders will see any returns..

I see a better chance of Osama Bin Laden having dinner with George W. Bush at a 5-star restaurant then either one of the companies not having their stock cancelled...

look at UA and HP.....same thing happened.



"Up the Irons!"
User currently offlineNwab787techops From United States of America, joined Feb 2006, 219 posts, RR: 0
Reply 22, posted (8 years 6 months 3 weeks 5 days 6 hours ago) and read 3942 times:

Quoting KC135TopBoom (Reply 4):
I just don't see DL and NW in a merger. It would make more sense for NW to merge with AA and DL to merge with CO. But, I don't see those mergers on the horizon, either.

I don't see a DL and NW merger as well. I think you would see AA and NW merger only if a UA and CO merger came first. If there is no UA and CO merger, maybe a CO and NW merger.

I don't think the Gov will let any merger go. Becouse of that you'll see the big old airlines stay the same.


User currently offlineCTHEWORLD From Mayotte, joined Dec 2004, 478 posts, RR: 2
Reply 23, posted (8 years 6 months 3 weeks 5 days 6 hours ago) and read 3878 times:

See, the problem is Norm Mineta's son works at Delta, and he has always been swayed by that. Norm Mineta is one of the most ineffectual S.O.T. this country has ever had. It is time Bush get rid of his token Democrat in his cabinet and get someone in there that can actually do the job.

User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 24, posted (8 years 6 months 3 weeks 5 days 6 hours ago) and read 3843 times:

If Norman Mineta's son works at Delta, nothing else the DOT has done has helped DL to any great degree.

I'm with Georgia AME. Leave Mineta out of the decision making process.

Honestly, I think NW will be the last girl picked at the dance despite its Pacific routes. NW is a mess and it won't be looking pretty anytime soon.

I'm ready to put my money on a DL acquisition of UA assets (probably not the whole company) in the next five years. I'm sure some of you will get a kick out of that statement but that's ok - I'm now on record and I believe I'll be right.


25 Post contains images MalpensaSFO : That is your first problem... Mineta! Never say never... Although that will have been when Northwest finally admits they have been modelling their cu
26 HPRamper : It's only been over the past two years they've really gone downhill. I used to actually prefer to fly NW because of the great customer service I got.
27 CTHEWORLD : Wow, that proves the old adage, a fool and his money are quickly parted!!!!
28 WorldTraveler : C, I didn't say how much but I will say that conventional wisdom as to how this industry will shake out is probably all wrong. You gotta take the long
29 TAN FLYR : A NW/DL merger would be akin to the New York Central / Pennsylvania RR merger in 1969 (or so). (A total disaster that eventually ended up with CONRAIL
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