sdexplorer00 From United States of America, joined Dec 2007, 158 posts, RR: 0 Posted (3 years 8 months 1 week 4 days 1 hour ago) and read 21517 times:
Wow, didn't see this at all. This would be quite a turn of events if it ever happened. Not quite sute what Delta would get out of it though. They don't need Charlotte with Atlanta, don't need PHL with JFK and LGA, don't need PHX with SLC, and certainly don't need labor headaches.
"Delta Air Lines Inc. is studying US Airways Group Inc. as a possible acquisition target, people familiar with the matter said, the latest twist in a swirl of deal-strategizing for the industry.
Delta, the world's No. 2 airline by traffic, also has been assessing a similar move for much-larger American Airlines parent AMR Corp., the people have said. It is working with Goldman Sachs Group Inc. as one of its financial advisers, along with Blackstone Group, the people said.
Delta sees itself as a consolidator in the airline industry and is studying several options, the people added. AMR entered bankruptcy-court protection in late November.
Delta has not yet approached US Airways, the No. 5 U.S. airline, and is still weighing which deal if any would make most sense and have the best odds of success, the people familiar with the matter said. Delta's last transaction was in 2008, when it acquired Northwest Airlines.
US Airways is open to being both buyer and seller and is expecting Delta to reach out, the people said. US Airways is also looking at a possible tie-up with AMR, US Airways has said. A marriage of US Airways and AMR would create a company on par in size with Delta and United. "
DeltaMD90 From United States of America, joined Apr 2008, 8625 posts, RR: 51
Reply 3, posted (3 years 8 months 1 week 4 days 1 hour ago) and read 21401 times:
Haha what are you doing DL? I think they're just throwing a bunch of curve balls out trying to mess stuff up. DL/AA makes at least some kind of sense if you sell off some of AA, but DL/(NW)/US??? It would be hard to argue that after arguing against US/DL a few years ago
Edit: conspiracy theory time, do you think DL might be trying to piss off everyone with these merger propositions to turn off the thought of ALL mergers, including AA/US?? Just a thought
UAL747 From , joined Dec 1969, posts, RR:
Reply 4, posted (3 years 8 months 1 week 4 days 1 hour ago) and read 21268 times:
Anyone just think this latest round of merger articles is spawned by AA's bankruptcy and nothing else? US/DL makes absolutely no sense other than some fleet commonality. Of course, when you fly everything under the sun such as DL, everyone will have fleet commonality with you.
I think it's all of the above including driving up their stock price. A lot of noise but I don't see much weight behind it. Again as I said before, it's their duty to explore all options; crazy or not.
LAXdude1023 From India, joined Sep 2006, 8138 posts, RR: 25
Reply 7, posted (3 years 8 months 1 week 4 days 1 hour ago) and read 21230 times:
Quoting DeltaMD90 (Reply 3): I think they're just throwing a bunch of curve balls out trying to mess stuff up.
Thats what I think theyre doing.
They dont actually want US and all they care to have from AA is MIA and maybe pieces of JFK, LAX, and DFW. Yet, with IAG and TPG involved, AA wont be broken up like that. Given DL's management are pretty smart, they know this as well.
They want to murky the waters and force AA into something they dont know if they want. Thats what I think anyway.
seabosdca From United States of America, joined Sep 2007, 6785 posts, RR: 7
Reply 9, posted (3 years 8 months 1 week 4 days ago) and read 21092 times:
Quoting DeltaMD90 (Reply 3): a bunch of curve balls out trying to mess stuff up.
Very artfully phrased and very correct.
This is DL trying to disrupt what it sees as an impending US/AA deal. DL has to know that US is about the worst possible fit for DL. DL could use DCA, a bunch of A330s and new A321s, and pretty much nothing else.
WA707atMSP From United States of America, joined Oct 2006, 2369 posts, RR: 8
Reply 12, posted (3 years 8 months 1 week 4 days ago) and read 20722 times:
My own personal theory:
Every mergers and acquisitions investment banker on Wall Street is trying to come up with deals that they can offer to prospective clients.
Regardless of whether or not a DL / US, DL / AA, US / AA, or even DL / UA deal makes sense, the Wall Street bankers know that if they can get a client to go through with the deal, the bankers will get massive fees and commissions.
When you read that "unnamed sources say that DL is considering a bid for airline XXX", what it really means is that "I've shown Richard Anderson what the financials would look like if DL actually bid for airline XXX. He said he would "consider it", and if he goes ahead with it, my bank will make $500 million in fees off of the deal. Of course, even if the deal is a dumb decision for Delta, I will still get my fees if I can sucker Richard Anderson into going through with it".
D L X From United States of America, joined May 1999, 12081 posts, RR: 51
Reply 13, posted (3 years 8 months 1 week 4 days ago) and read 20705 times:
I think you guys that say that US is not a good fit for DL to buy are the same ones that didn't understand why DL was a good airline for US to buy a couple years ago: you become more profitable by elimination. Yes, it obviously does help some to merge with someone who doesn't have much market overlap. BUT, it is MORE profitable to merge with a competitor, because you lose some of the competition, and can expand the duplicative resources into other competitors regions.
That's why you don't see McDonald's buy Oracle, but you do see Oracle buying Sun. Obviously, that's an extreme example, but I hope it makes the point.
Send me a PM at http://www.airliners.net/aviation-forums/sendmessage.main?from_username=NULL
But I spouse it is a bluff, sorta like how UA was interested in US, while in was trying to get CO to merge with them.
I think its exactly what it is. I think they are trying to force AA/US's hands to show their cards as they probably know a deal is in the works. Or try to get UA to get in the picture as they have always wanted CLT. DL/US didnt make sense 5 years ago and it certainly doesnt make sense now. There would be too many hub closures, unless they are trying to work a deal and sell off CLT, PHL to AA in exchange for MIA. PHX wouldnt make any sense with SLC to the north and what they are trying to build at LAX.
IADCA From United States of America, joined Feb 2007, 1600 posts, RR: 10
Reply 16, posted (3 years 8 months 1 week 3 days 22 hours ago) and read 19252 times:
Quoting D L X (Reply 13): I think you guys that say that US is not a good fit for DL to buy are the same ones that didn't understand why DL was a good airline for US to buy a couple years ago: you become more profitable by elimination. Yes, it obviously does help some to merge with someone who doesn't have much market overlap. BUT, it is MORE profitable to merge with a competitor, because you lose some of the competition, and can expand the duplicative resources into other competitors regions.
Not to mention that closer competitors are more likely to be able to find efficiencies (consolidating closely-spaced crew bases, etc.)
There are, however, some significant antitrust hurdles here. The DOJ just forced divestitures to effect the LGA-DCA slot swap. They'd certainly not allow the same two carriers to then just combine the holdings at the two airports together to generate even larger concentrations than the arrangement already rejected.
Second, I'd imagine there might be some difficulty getting US added into the Skyteam immunized JV as well (though this difficulty might come more from the EU than American side). The EU focuses a lot more on the "lock-up" effect of hubs than the DOJ and DOT do, and throwing PHL into the Skyteam JV would likely not please them. Recall also that US isn't a member of A++, Star's JV, so they're currently an independent competitor across the Atlantic.
Third, this might just be another example of looking at the nationwide market and saying "nope, too big." That's essentially what AT&T/T-Mobile was, and that was a #2 plus #5 merger in a network-effects industry with significant entry barriers.
I'd hate to have to stand up and argue for this merger. I'm having a hard time thinking of any really significant pro-competitive justification here.
AAIL86 From Finland, joined Feb 2011, 466 posts, RR: 3
Reply 18, posted (3 years 8 months 1 week 3 days 22 hours ago) and read 19232 times:
what happened to "keep Delta my Delta"??
Quoting WA707atMSP (Reply 12): Every mergers and acquisitions investment banker on Wall Street is trying to come up with deals that they can offer to prospective clients.
Regardless of whether or not a DL / US, DL / AA, US / AA, or even DL / UA deal makes sense, the Wall Street bankers know that if they can get a client to go through with the deal, the bankers will get massive fees and commissions.
There's probably some truth to this theory. Bankers have always profited off major transactions like, whether they provide anything of value or not to the process.
cschleic From United States of America, joined Feb 2002, 1389 posts, RR: 0
Reply 19, posted (3 years 8 months 1 week 3 days 22 hours ago) and read 19177 times:
Quoting WA707atMSP (Reply 12): Regardless of whether or not a DL / US, DL / AA, US / AA, or even DL / UA deal makes sense, the Wall Street bankers know that if they can get a client to go through with the deal, the bankers will get massive fees and commissions.
When you read that "unnamed sources say that DL is considering a bid for airline XXX", what it really means is that "I've shown Richard Anderson what the financials would look like if DL actually bid for airline XXX. He said he would "consider it", and if he goes ahead with it, my bank will make $500 million in fees off of the deal.
It's a new year, and all these guys are dreaming up ways to do transactions so they can make some fees. Doesn't matter at all if it makes sense for the customer.
Why? They are just getting through a merger and the only hub they can really use is CLT. PHX competes with DEN and PHL would have a bit of competition between IAD and EWR.
Quoting flyabr (Reply 5): so what the heck use do they have for US Airways?
My take: this is DL just pulling AA to consider merging with US. I think DL knows that US is not a good fit in their network. Sure, they eliminate competition by dismantling it, but other than that, there's nothing. However, by taunting AA that US IS a good fit, AA and US might consider merging.
After flying with AA this week, I'd say it would be a good idea. Let's see how this plays out.
"You haven't seen a tree until you've seen its shadow from the sky."
Not really. I would use that argument with AA+DL but not DL+US. The combined carrier would have to divest a lot. The biggest gain IMHO would be DCA and we already know how the gov't felt about that. US isn't going to have much of anything left in LGA after the second phase of the swap. Multiple dailys to the hubs and a few other markets and of course the US Shuttle.
The difference between #1 and #2 is pretty insignificant now considering both carriers are doing swell financially. DL is about as big as it needs to be on the domestic front. They can go up and down as much as they need across the Atlantic already and have very good coverage across and through the Pacific with the NRT operation complementing the global "reach". Big inroads would be made in LatAm/Carib and South America and there's nothing US can offer them there.
Again, my personal feelings but the noise is much about nothing and most certainly not about trying to get back to the #1 spot. More like elimination of competition and what exactly will US investors get out of that outside of what they're getting now other than a stake in the current company. DL already has investors they have to please and now the US folks will have to share that pie while they have what they currently have all to themselves. In the end, it would be a net loss and that doesn't make sense.
flyabr From United States of America, joined Sep 2003, 731 posts, RR: 0
Reply 24, posted (3 years 8 months 1 week 3 days 21 hours ago) and read 18015 times:
DL is still the largest airline in the USA (if not the world) based on passenger traffic. Total 2011 enplanements (passengers) through October for domestic and international travel still beats out UA/CO combined...quite handily in fact. However, if you consider only domestic passengers...Southwest carried the most. The stats are available on www.bts.gov
[Edited 2012-01-27 19:01:11]
: I believe this would be as much, or more of a nightmare than an DL/AA deal.....at least with AA, along with the headaches, you got some assetts worth
: Let's get really devious here and think it through: a) Delta makes a pitch for US b) US complains and tries to get Delta to pay more to buy US c) Delt
: It appears that DL is simply trolling US, perhaps to turn up the pressure for sort of action to take place. DL would (as would all carriers) benefit f
: It was a different time then, though. CAL really needed the help. US doesn't. There are very large investment firms out there who will be MORE than w
29 EA CO AS
: Is it conceivable that US could effectively be "split" between both DL and AA, and not merge with either as a single entity? Parker might very well de
: As it looks, a US/AA deal is forseeable. I think DL says they are looking at taking AA to pressure US to do so. And now DL says they are looking at a
: It definitely appears to be some kind of move to nudge US and AA together, similar to the move with US and UA that pushed the UA/CO merger ahead. I am
: Or perhaps it's all just A.net speculation, stemming from some media sources that may or may not be accurate. But that's what we're all about, here,
: Maybe since the slot swap went through, DL wants to take the new DCA slots from US
: Remember the old "Deltaflot" livery? Aeroflot is coming back, based in Atlanta! They even have crop dusting heritage in common. All they need to do no
: I am trying to figure out which is a more ridiculous combination, DL/AA or DL/US. One would create an absurdly large airline and throw the global airl
: I actually see the US hubs (especially CLT/PHX) as filling a niche role for a handful of important companies with business in those cities. It is lik
: Don't any of you remember the old days? I can see DL making a serious play for US. Look at what AA did after snapping up TWA. Did AA really need the T
38 DL WIDGET HEAD
: I think PHL would survive a DL/US merger largely intact.
: Next up: "DL Considers Bid for United Airlines". News at 11!
: Isn't the whole point of antitrust law to prevent deals like this from happening? As many have said the primary outcome of such a merger would be redu
41 DL WIDGET HEAD
: I think DL is serious about aquiring another airline and not simply "meddling" in their affairs. Which airline that is remains to be seen but I'm enj
: If so, I think it's a defensive move more than an offensive one. They clearly don't like the idea of the combined US/AA, and want to disrupt that dea
: Phoenix-based businesses would probably be the worst reason to buy an airline. As much as I love Arizona there simply aren't many. Delta, actually, c
44 DL WIDGET HEAD
: Since The DL bankruptcy, DL has been extremely agressive in all regards. DL management is not one to sit back and play defense and allow other compan
: I cant see Doug Parker and Kirby wanting to be bought. They are buyers
: You hit the nail on the head. This is just A net. speculation, to make a lively discussion for the wannabee CEO's DL and US do not compete on signifi
: It must be a slow news day, but here at a net pelple get excited over any news that comes out. This is just one of the many rumors that we will be see
: We dont even know who leaked this info. But I would suspect it didnt come from 1030 Delta Blvd. That isnt going to happen. How can US take over AA if
: It looks like in my opinion that the US market is becoming like that in Soviet Russia. If all these deals go through, you will be strongly suggested t
: Since we're all spouting random scenarios, maybe DL is asking to merge with AA (get denied), merge with US (get denied), well how about AS they ask? "
: Exactly. This is a fanboy fantasy - the probability is extremely low. I mean, why don't you suggest a scenario where US and AA present DL with a chec
: I think what he is talking about is that DL would just take a minor equity stake in US, buy some of their stock. not a full buy of the company. It wo
: Not to be off topic - but if AA and US merge, which name will the "new" carrier keep? I'm guessing AA, and the US brand would disappear? That's how th
: Interesting scenario. Never thought about it. DL then has some sort of Golden Share in US...
: I'm guessing that Doug Parker doesn't hold much loyalty to the US Airways name, because in the US/DL scenario, he was willing to use the Delta name f
: The US brand would disappear but US would have to be the acquiring entity or it would trip a clause in the pilot contract that would make their wages
: There are many ways this could play out. Whether any sources quoted at this point have any credible information is doubtful. If AA does not exit bankr
: For seemingly the millionth time - why would this ever happen? What possible logic or scenario would lead to the above occurring? If AA is to be hypo
: Delta merging with Usairways makes no sense at all. Why not merge with Air Canada, that would be a bolder step. Delta needs hubs in CLT, Philaldelphia
: Given AA's pile of cash and BA and TPG's potential involvement, that has about a zero percent chance of happening.
: Anyone here well acquainted with the current state of employee (union) morale/relations w/mgmt at Tempe? If it hasn't improved in the last 6 yrs, AA w
: From talking with several US employees lately, I've heard nothing but positivity. Note that I have not heard from any East pilots....but from everyon
: OR, that's just in your mind because your basing opinion on leaked information that may or may not be accurate. As of late, DL has had no comment on
: Well, aren't we all doing that? But, nonetheless, basic logic and common sense strongly points to his conclusion that Delta is doing this more to act
: Morale? I highly doubt morale at AA is at it's highest and brightest at the moment. Yes at US like at any company you have people who might not like m
: From what I've been hearing, at this point management is sort of on the sidelines and the pilot groups are more disgruntled regarding one another.
: I tend to agree with you, I don't think DL wants any of US, I feel they just opening up to them, We all know what Delta wants, to make it simple "MIA
: No, I do not - not an economically justifiable "worth." AMR - with the right fleet and cost structure, both of which it is likely to soon have - is a
: but probably that is the deal that Delta may offer, is for US to take or leave it, I guess you said it your self Money, Delta may have boeing in thei
: If there's a chance that this would happen with any scenario, I don't think DL would go for it. They just fought long and hard and the elections were
: The original statement: Response: Response: The operative word: "If..." As argued in subsequent posts, while there are assets DL and US would like to
: I think they don't like the idea but if, "IF" that was the only obstacle in order to get MIA and LHR from AA, I guess they will take their chances, i
: Good point. Why wait around to see what will happen vs trying to influence the outcome? I'm not convinced that AA needs a domestic US merger partner
: Well sure - anybody can offer anything. My question, again, is: why would anybody ever consider taking it? From AMR's perspective - if, as is almost
: I ask this myself, I think $$$$$ might (very small might btw) get US to give something up. Look at the LGA/DCA slot swap. kinda apples to oranges, bu
: Well sure - everything has a price. Of course there is some number that Delta could give to AMR's creditors committee, and/or for that matter hypothe
: Well, that is all it is for you... a "strong suspicion." You know as much as I do. And DL might have a strong suspicion that it is outside of their b
: I really do not understand why US would sell MIA to DL. They are in the business to provide airtravel, not to sell pieces of their network. MIA would
: ... and I've never claimed any differently. Well sure, again, it's self-evident that Delta will explore their options and weight the possibilities. B
: I've thought the same as well. I think MIA would be the last US would let go of, perhaps DL is trying to get some NYC, LAX, or DFW... Well it wasn't
: I think it's more likely that the new airline would sell off the remaining LGA ops and consolidate NYC area ops at JFK. DL would obviously rather hav
: Exactly... There is nothing left at STL for American to cut.. Only flights left are to all the hubs. The only non-hub flight is DCA. STL is not like
: don't they still also do LAX? I think they do...but I guess thats technically a hub/focus city....but you are right, there isnt anything left at STL
: I think that AA/AMR might end up merging with US but not after the BK is done and I'm almost 100% sure it's going to be under AA/AMR terms and conditi
: LAX is a "cornerstone" for AA along with DFW, JFK/LGA, MIA, and ORD. Those are the only flights out of STL for AA along with DCA.
: OK, let me be frank, this is DL throwing a wrench in things. US has pretty much zero value to DL. Here is why: PHX: DL doesn't want a hub where they
: I'll just throw it out there, if Republicans get elected in November, there is a chance they'll have a more "hands off businesses" approach, for bette
: Cape Air does a lot of flying out of STL for AA. Some is probably EAS flying but I still think those help feed the mainline service making STL still
: All EAS and to very small markets. Yes, AA puts their code on the 9K flights to make them work. It's pretty much just like the Great Lakes deal in MS
: US Airways guy I know (came up through HP) says, and I quote, "The union can kiss my ass, I think we'd be better-off without 'em. " He's plain-spoken
: US doesn't have anything at MIA that DL would want. NS
: EricR means US as in, the potential new AA/US.
: Wait, what new airline are we talking about here? DL/US? AA/US? DL/AA? So many different combinations are being discussed I'm getting confused. If it
: Because a true hub is not possible at LGA and EWR is taken. You consolidate at JFK, sure that may not be the preferred airport for millions of people
: Correct. I should have clarified, I did mean potential new AA/US.
: US buying AA makes a lot of sense. DFW and LAX are better cities for hub operations than PHX, so PHX could be scaled back, probably a lot. Obvioulsy,
: Maybe we could have our old H gates back........or even better, now that we've moved out of L, take the L concourse, back.
: That had absolutely nothing to do with tight gate space, the A320 had been pushed out when the MD88 was pushed into it. That could happen at any gate