SLCUT2777 From United States of America, joined Dec 2005, 3858 posts, RR: 11 Reply 4, posted (6 years 6 months 1 day 14 hours ago) and read 3752 times:
Quoting D L X (Reply 2): I generally and miscellaneously think this merger is a bad idea.
I further agree that it is about as stupid a merger proposal as I've seen. I've reviewed the presentation by Doug Parker on the US site and all he did was further convince me how bad it could really become, and his idea of industry contraction just doesn't fly (no pun intended!), even though I agree some needs to happen. This is just too expensive a way of doing such.
NW would be a much better merger partner for US, even though I think the HP/US merger is far from reaching the maturation needed to pursue another one. DL's recovery in BK is now too advanced to be seriously considered as well as the anti-trust implications this proposal raises.
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
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.
BDL2DCA From United States of America, joined Jan 2006, 313 posts, RR: 0 Reply 10, posted (6 years 6 months 1 day 9 hours ago) and read 3487 times:
Quoting D L X (Reply 2): I generally and miscellaneously think this merger is a bad idea.
I had an epiphany this morning. I don't think Doug P. really wants to merge US and DL - although I'm sure he'd be willing to do so for $8 bil. I think what he is trying to do is force up the price for Delta - get someone else to spend too much for Delta and open up the market for US.
I think the merger is plan B and that plan A is to force a Pan Am/National type merger.
Labor problems are in the forefront here. A DL merger/buyout would in fact be simpler than the US/HP merger, in all likelihood. Fleet size is not the issue it's being made out to be. DL domestic routes also probably have a lot more potential for profit....likely more money to be made dominating the east coast business travel market than flying thin routes all over the Upper Midwest.
Panamair From United States of America, joined Oct 2001, 4583 posts, RR: 26 Reply 12, posted (6 years 6 months 1 day 8 hours ago) and read 3439 times:
Quoting HPRamper (Reply 11): DL domestic routes also probably have a lot more potential for profit....likely more money to be made dominating the east coast business travel market than flying thin routes all over the Upper Midwest.
NW's domestic system has generally been more profitable precisely because of its dominance of routes all over the Midwest where LCC competition has been little to non-existent. NW's domestic operation in Q2 2006 generated the highest operating margin of any legacy carrier according to DOT statistics - at 13.7% compared to DL's 11.1% and US's 8.3%. In this area, NW even beat most LCCs, except for WN.
Litz From United States of America, joined Dec 2003, 1745 posts, RR: 0 Reply 13, posted (6 years 6 months 1 day 5 hours ago) and read 3344 times:
Quoting BDL2DCA (Reply 10): I think what he is trying to do is force up the price for Delta
Don't forget, that even if there are no buyers for Delta at all, he will have succeeded in driving up their bankruptcy exit costs, as Delta will have to at least match and more likely beat the share offers US is offering to fend off the buyout.
This will result in a Delta post bankruptcy with higher CASMs, and result in a weaker competitor to US.
Given that, this might be more of a pre-emptive strike to fend off a future LCC-like competitor, as DL will have trimmed costs down to almost LCC-like levels.
Sunking737 From United States of America, joined Feb 2005, 1930 posts, RR: 9 Reply 14, posted (6 years 6 months 1 day 4 hours ago) and read 3277 times:
As a Former NW employee, and A current HP/US employee, I don't want NW as they have a bad attitude right now as they got the short end of the deal with management. They do not trust any managment right now.
I do belive that NW will be in a merger by the end of 2007, but with who I don't know my crystal ball is cooling off it has been working overtime.........
Vega From , joined Dec 1969, posts, RR: Reply 15, posted (6 years 6 months 1 day 4 hours ago) and read 3256 times:
If this bid fails, it will be interesting to view the reactions and future relationships between Parker and the various existing US Hubs. In far fetched speculation, I'd bet most would be very leary about investing in any future US expansion plans, via gate accesses, capital improvements, or general "favors", unless they had an iron clad agreement with Parker (already in place) that guarantees their airport would either be expanded or at least not downsized if the takeover succeeded. If CLT was smart, they'd be already doing what PHL did during the USAir demise and start making commitments to WN and others - just in case. A NW merge would have been a lot easier to figure out - logistically.
Surfdog75 From United States of America, joined Nov 2005, 304 posts, RR: 0 Reply 16, posted (6 years 6 months 1 day 4 hours ago) and read 3226 times:
Quoting Litz (Reply 13): Don't forget, that even if there are no buyers for Delta at all, he will have succeeded in driving up their bankruptcy exit costs, as Delta will have to at least match and more likely beat the share offers US is offering to fend off the buyout.
Delta by itself should be able to offer the creditors their money much quicker. They planned exiting in the spring or early summer. If aquired, the bankruptcy would have to be much longer to reject the leases and extract the cost savings they would need to achieve the so called synergies they talk about. Quicker money for the creditors is a big plus in this business.
Quoting Vega (Reply 15): If this bid fails, it will be interesting to view the reactions and future relationships between Parker and the various existing US Hubs.
It will also be interesting to see the relationship between US/HP and DL when it fails.
HPRamper From United States of America, joined May 2005, 3661 posts, RR: 8 Reply 19, posted (6 years 6 months 1 day ago) and read 3062 times:
Quoting Panamair (Reply 12): NW's domestic system has generally been more profitable precisely because of its dominance of routes all over the Midwest where LCC competition has been little to non-existent.
NW also is not in the business of convincing anyone it is a low-fare carrier, while US has been steadily moving in that direction since the merger, one station at a time basically. If US took over those NW routes, the current high fares would only stick temporarily. NW also has the paid-in-full DC9 fleet flying most of those thin routes so of course it's not that hard to pull a profit.
Once the system was normalized, where would we see more high-revenue business passengers...along the ATL-CLT-DCA-PHL-LGA-BOS corridor or in places like GRR, GFK, MSN...?
here's a nice article regarding the CFO at DL's reponce to the merger... I just have to wonder how happy DL's creditors are with the way things are going if DL is in contact every day with them... just a thought..
Panamair From United States of America, joined Oct 2001, 4583 posts, RR: 26 Reply 21, posted (6 years 6 months 19 hours ago) and read 2960 times:
Quoting HPAEAA (Reply 20): ... I just have to wonder how happy DL's creditors are with the way things are going if DL is in contact every day with them
DL is in contact with them every day because DL is currently in the last stages of putting together its BK exit plan as a standalone carrier. At this stage, the biggest focus is on discussions with the creditors about the shape of the Ch.11 exit, hence the heavily active discussions.
First, the moderator is mistaken in shifting to this "General/Misc. topic". The "Best DL/US Livery" was nothing more than a fantasy of discussing imaginary liveries. The purpose of that discussion was purely for entertainment, not for the more serious discussions and debates within this existing thread. Furthermore, a topic of "General/Misc" invites parallel and completely unrelated discussion lines. I've agreed with the efficiency of categorization, but not in this case.
To comment on the livery, (link re-displayed here from Jmc1975's original post http://www.cardatabase.net/modifieda...rch/photo_search.php?id=00007942), I think it's a nice verbatim combination of the 2 existing liveries. It lacks controversy, and seems to be a fair blend. On the other hand, it retains too much of each airline. I think should this merger go through, which is irrelevant for this discussion, either Delta will use a very slighly modified livery based on one of its existing or recent versions, or there will be a completely new livery unrecognizable from anything previous.