RL757PVD
Topic Author
Posts: 2530
Joined: Fri Dec 03, 1999 2:47 am

Merger Brewing?

Mon Dec 01, 2003 8:38 am

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!
 
AA777MIA
Posts: 671
Joined: Thu Aug 07, 2003 10:30 am

RE: Merger Brewing?

Mon Dec 01, 2003 8:43 am

Merger with who??? Am I missing something?
 
aa757first
Posts: 3140
Joined: Sun Aug 03, 2003 11:40 am

RE: Merger Brewing?

Mon Dec 01, 2003 8:46 am

Are you assumming Delta is being taken over or Delta will take over?
 
luv2fly
Posts: 11056
Joined: Tue May 13, 2003 2:57 am

RE: Merger Brewing?

Mon Dec 01, 2003 8:47 am

Who or what airline would want DL's massive debt?
You can cut the irony with a knife
 
PiedmontGirl
Posts: 1112
Joined: Mon Nov 24, 2003 2:39 am

RE: Merger Brewing?

Mon Dec 01, 2003 8:55 am

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?
 
dutchjet
Posts: 7714
Joined: Sat Oct 14, 2000 6:13 am

RE: Merger Brewing?

Mon Dec 01, 2003 8:57 am

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!
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: Merger Brewing?

Mon Dec 01, 2003 9:29 am

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
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
alphascan
Posts: 795
Joined: Mon Nov 24, 2003 12:04 am

RE: Merger Brewing?

Mon Dec 01, 2003 9:58 am

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."
 
ssides
Posts: 3248
Joined: Fri Feb 09, 2001 12:57 am

RE: Merger Brewing?

Mon Dec 01, 2003 10:04 am

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!!!!
 
FA4UA
Posts: 777
Joined: Sat Nov 22, 2003 6:26 pm

RE: Merger Brewing?

Mon Dec 01, 2003 10:06 am

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
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: Merger Brewing?

Mon Dec 01, 2003 10:08 am

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.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
FA4UA
Posts: 777
Joined: Sat Nov 22, 2003 6:26 pm

RE: Merger Brewing?

Mon Dec 01, 2003 10:40 am

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
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: Merger Brewing?

Mon Dec 01, 2003 10:43 am

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
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
tekelberry
Posts: 1309
Joined: Tue May 13, 2003 6:37 am

RE: Merger Brewing?

Mon Dec 01, 2003 10:48 am

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.
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: Merger Brewing?

Mon Dec 01, 2003 10:52 am

um... so then, what's AA's fleet like?  Big grin
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
RL757PVD
Topic Author
Posts: 2530
Joined: Fri Dec 03, 1999 2:47 am

RE: Merger Brewing?

Mon Dec 01, 2003 10:56 am

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!
 
toxtethogrady
Posts: 1698
Joined: Sat Dec 23, 2000 12:33 pm

RE: Merger Brewing?

Mon Dec 01, 2003 10:58 am

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.
 
StevenUhl777
Posts: 3281
Joined: Sun Jul 08, 2001 11:02 am

RE: Merger Brewing?

Mon Dec 01, 2003 11:01 am

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
And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: Merger Brewing?

Mon Dec 01, 2003 11:02 am

In DL/CO's last merger attempt, CO would have had to be the survivor.... otherwise, NW could veto any such effort.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
aa757first
Posts: 3140
Joined: Sun Aug 03, 2003 11:40 am

RE: Merger Brewing?

Mon Dec 01, 2003 11:06 am

If DL and CO were to merge, they would become a US - Europe powerhouse, correct?
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Merger Brewing?

Mon Dec 01, 2003 11:17 am

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.
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: Merger Brewing?

Mon Dec 01, 2003 11:23 am

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..?
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
tekelberry
Posts: 1309
Joined: Tue May 13, 2003 6:37 am

RE: Merger Brewing?

Mon Dec 01, 2003 11:27 am

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

Not necessarily.

[Edited 2003-12-01 03:34:05]
 
toxtethogrady
Posts: 1698
Joined: Sat Dec 23, 2000 12:33 pm

RE: Merger Brewing?

Mon Dec 01, 2003 11:29 am

"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.
 
fjnovak1
Posts: 574
Joined: Wed Apr 05, 2000 2:23 am

RE: Merger Brewing?

Mon Dec 01, 2003 11:33 am

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!!
 
tekelberry
Posts: 1309
Joined: Tue May 13, 2003 6:37 am

RE: Merger Brewing?

Mon Dec 01, 2003 11:38 am

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...

I edited my post before I read this as I wasn't sure of the accuracy of my statement.

The merger of the two wouldn't mean it would be the US-Europe powerhouse however...
 
ramerinianair
Posts: 1452
Joined: Tue Nov 11, 2003 6:03 am

RE: Merger Brewing?

Mon Dec 01, 2003 11:44 am

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 anybody to get back on track. I believe that with some decent management, they can restructure(without chapter 11) and hold nice profits. The have a great market share in Europe and Asia, not to mention the largest hub, ATL. If they are going to merge you also have to look at the Hub placements and not so much at the fleet commonality, They already fly a mix of Boeing, McDonald Douglas, and Canada Air aircraft. You also don't have to be worried with the government intervening with the merger because they will have to large of a market share in Europe. This is not a problem because so many US cities are serviced by other Airlines(Europen). Here is my opinion:
Continental- Hubs in EWR and JFK/LGA not way. Same problem with DFW and HOU.
AA-Both with too much Debt. Too many Hubs, JFK, LGA, DFW, MIA, ATL, SLC, LAX, CVG, ORD, BOS.
USAir-Who knows but I doubt it with it's new alliance with UAL.
America West- Would add a stronger West Coast but I don't think so. Just a vibe.
Alaska, HAwaiian, Aloha- To far removed to become a part of Delta's plan.
NWA- Might be feasible but from NW's perspective, why fix it if it ain't broken.
Southwest- Yea right. 1 type of A/C to 12. This ruins the whole business plan.
Jetblue- Neileman does have a habit of selling after proving him-self.(Twice-Once to WN and again to Air Canada)
This leads me into AIRTRAN ...
Airtran is the leading competitor of Delta. It would be a great addition to Song's structure! Maybe then the Delta's wholly owned sub-sidaries could all become under one name Song or even stay Delta and under a major re-organization again withoit the usage of chapter 11, they could save money through new labor contracts and cut costs by having all of the other sub-sidaries serviced by one union and have one management team for the new Delta.
Just a thought but a merge within it's self may serve very well. Also now that you have Song, there is no need to have an Express, Connection and Shuttle service. Look how shuttle by United and Metrojet have failed. We don't want that to happen with Delta Connection, Delta Express, Delta Shuttle and Song too.

Thanks,
Steve
W N = my Worst Nightmare!!!!!
 
luv2fly
Posts: 11056
Joined: Tue May 13, 2003 2:57 am

RE: Merger Brewing?

Mon Dec 01, 2003 11:47 am

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 WN, David had nothing to do with it.
You can cut the irony with a knife
 
AirDude66
Posts: 180
Joined: Mon Nov 17, 2003 12:48 pm

RE: Merger Brewing?

Mon Dec 01, 2003 11:57 am

Ithink AirTran will take over Delta and control Hartsfield.
 
jessman
Posts: 1457
Joined: Sun Jul 08, 2001 1:11 pm

RE: Merger Brewing?

Mon Dec 01, 2003 1:16 pm

Regarding the transatlantic situation, Delta is the leading US carrier to Europe, according to it's news releases.
http://www.delta.com/home/press/tacindex.jsp?file=NewIntlFreqs.htm&tactype=Current&tacitem=Release&title=Delta%20Increasing%20Summer%20Flights%20to%20Europe%20from%20Atlanta

Neither DL nor CO have access to LHR, which defines transatlantic dominance according to many, so the word powerhouse may be too strong for some.

However as a carrier to Europe, I will post the numbers, based on this August's schedule (busy season, let's give everyone a fair shake) for Delta. Someone else can post for CO. Then we'll compare with others

For Delta 777 = 777-200, 763 = 767-300ER. All flights are daily unless otherwise noted. The Ireland flight goes to both Dublin and Shannon, alternating between which one is first.

ATL - CDG 2X. 1 X 777 1 X 763
JFK - CDG 2X 763
ATL - BRU 1X 763
CVG - CDG 1X 763
JFK - BRU 1X 763
ATL - MXP 1X 763
ATL - MUC 2X 763 5 days a week, 1X ow
JFK - MXP 1X 763
ATL - MAD 1X 763
ATL - CO / LIRF), Italy">FCO 1X 763
JFK - MAD 1X 763
JFK - CO / LIRF), Italy">FCO 1X 763
ATL - BCN 1X 763
CVG - CO / LIRF), Italy">FCO 1X 763
JFK - BCN 1X 763
ATL - FRA 2X 1 X 777 1 X 763
JFK - FRA 1X 763
ATL - DUB/SNN 1X 763
CVG - FRA 1X 763
ATL - ZRH 1X 763
ATL - AMS 1X 777
ATL - MAN 1X 763
JFK - AMS 1X 763
ATL - STR 1X 763
CVG - AMS 1X 763
JFK - NCE 1X 763
ATL - LGW 4X 1 X 777 3 X 763
CVG - LGW 1X 763
JFK - VCE 1X 763
JFK - IST 1X 763
JFK - SVO 1X 763
JFK - ATH 2X 763 3 days a week 1X otherwise.

Sorry, they got a little jumbled together I had tried to keep european cities together, it didn't work.
 
deltabobo
Posts: 163
Joined: Sun Jul 13, 2003 1:16 am

RE: Merger Brewing?

Mon Dec 01, 2003 1:41 pm

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 a strong carrier and like the most of the majors, they are struggling due to the downturn of the economy. Delta brought on Grinstein to help fill a void that Mullin could not fill no matter how hard he tried.....Customer Service. From the years of its founding to the end of the tenure of Ron Allen, Delta was known internationally for its award-winning customer service. Sure they had bad technology, but how people who flew Delta in the past remember when a Delta Customer service agent went out of their way to help a passenger? I work for Delta at GSP. It was Mullin who initiated technological reforms and got rid of out-dated computer systems, but with the old computer-systems went the customer-first zeal out the door. I have a poster that was issued to all Delta employees back in the early 1990's (It was issued to my father, a Delta employee also). The poster's title is "Operation Customer Service" Delta Air Lines - We Love to Fly, and It Shows!!! What ever happened to "We Love to Fly and it Shows? As stated before, I believe Grinstein was brought on to bring back the customer service focus of Delta that was present so many years ago.
Dispatchers...saving pilots from themselves and their egos since 1938!
 
Iflewrepublic
Posts: 511
Joined: Wed Jun 14, 2000 11:31 pm

RE: Merger Brewing?

Mon Dec 01, 2003 2:41 pm

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 over the coals for that comment, but let me just interject...a friend of mine, a Delta Flight Attendant, said that one to me.

Iflewrepublic.
Aviation is proof that, given the will, we have the capacity to achieve the impossible.
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Merger Brewing?

Tue Dec 02, 2003 8:41 am

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, if it was, why would AC have started up Zip.
 
flashmeister
Posts: 2671
Joined: Fri Apr 28, 2000 4:32 am

RE: Merger Brewing?

Tue Dec 02, 2003 8:55 am

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 complementary route structure. Similar business culture.

Plus, the forthcoming takeover of ACA by Mesa will ease some of the merger pressure that is admittedly building...

The only major-to-major merger that makes even a little sense is DL + AS, but DL doesn't have that kind of dough to blow on a purchase, and AS has little reason to seek a merger with DL, so it'd be an outright takeover. No money for that.
 
DC10GUY
Posts: 2590
Joined: Fri Feb 18, 2000 5:52 am

RE: Merger Brewing?

Tue Dec 02, 2003 8:58 am

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 ....
Next time try the old "dirty Sanchez" She'll love it !!!

Who is online

Users browsing this forum: 817Dreamliiner, aerlingus747, alggag, deltacto, Devilfish, etops1, fr8mech, fun2fly, Google [Bot], Google Adsense [Bot], jfkgig, msp753nwa, notdownnlocked, PA727, powercube, salttee, Schipluiden, SCQ83, shankly, tomasem, TWA772LR, wolbo, zaphod42 and 374 guests