AA787823
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USAir May Drop Delta Deal!

Thu Dec 07, 2006 12:11 am

Basically if DL cannot be persuaded to "Jump on" the deal is dead.

http://www.usatoday.com/money/biztra...2006-12-05-usair-doug-parker_x.htm
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N766UA
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 12:22 am

Good for them. You shouldn't force an unwilling participant into a merger through legal means.
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EWRCabincrew
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 12:23 am

Then what is the point of a 'hostile' take over?
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RL757PVD
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 12:23 am

I honestly, think that was the plan all allong.... I think Usairways plan was to shake things up and hope to get the merger game started. It will be interesting to see if they continue to persue another merger... *cough* NW *cough*
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Cactus742
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 12:31 am

Not surprising. DL is not the carcass of an airline that US was. US would have died had HP not bought it and its employees would have been out of jobs. DL is not at that point yet. Neither management nor the front line employees would be willing participants in a merger with US right now and that would probably contribute to a very rocky merger.
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luv2fly
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 12:31 am

I really think that US should get its house in order before going after another one.
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N328KF
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 12:31 am

Quoting N766UA (Reply 1):
Good for them. You shouldn't force an unwilling participant into a merger through legal means.

That is not a universal truism. If you did that, then you are basically allowing shareholders to surrender complete control to management.

In cases where management may not be acting in the best interest of the shareholders, a hostile takeover allows a suitor to go bypass intransigent management. In this case, the shareholders get the option to choose the option that may be best for them, rather than letting management do it.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
COERJ145
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 12:57 am

Well, if the US-DL deal dies(which I hope it does), I wonder if Parker will go on a crusade for NW?  scratchchin 
 
bucky707
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 1:11 am

Quoting N328KF (Reply 6):
In cases where management may not be acting in the best interest of the shareholders, a hostile takeover allows a suitor to go bypass intransigent management.

which really shows how messed up corporate governance is today. In theory, management works for the BOD and the BOD works for the shareholders. Anymore though, the BOD and management are often in bed together and do what they want, despite what is best for the shareholders.

In terms of the USAir/Delta deal, I think Parker knew it was a longshot from the start. He threw up a hail mary pass hoping someone would catch it. But it's not going to happen.
 
RL757PVD
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 1:12 am

Quoting COERJ145 (Reply 7):
Well, if the US-DL deal dies(which I hope it does), I wonder if Parker will go on a crusade for NW?

I hope so..NW offers US:
Mid america hub (MSP)
Mid Amerca focus city (MEM) (assumed downgrade)
A319/320s
757s
A330s
Strong complementary Intl Newwork
Contract workforce at most stations (easier integration)

Most importantly.. employees that arent crazy about their current management, and would probably be ALOT more receptive!

US-NW might make the most sense of any combination out there right now
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TL8490
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 1:15 am

The only other option for US is now NW...this could get interesting..


In the end this could push DL and NW together....
 
DAL767400ER
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 1:31 am

Quoting Luv2fly (Reply 5):
I really think that US should get its house in order before going after another one.

 checkmark 

Quoting TL8490 (Reply 10):
In the end this could push DL and NW together....

Well, such a merger has been speculated for quite some time as is, given that in this case the networks would actually complement each other. Though I still hope DL goes at it alone for the foreseeable future.
 
jimyvr
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 1:35 am

It's just a symbolic move to test the market and the industry how well they can accept consolidation in the US.
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incitatus
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 1:35 am

Quoting Bucky707 (Reply 8):
Anymore though, the BOD and management are often in bed together and do what they want, despite what is best for the shareholders.

That's the beauty of this takeover: Shareholders' revenge.
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malaysia
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:00 am

I want US and NW cause I want to see a US Airways A330 in BKK

Would be even better if they could merge sooner, so the remaining painted HP 757-200s could be flying out of NRT Big grin

[Edited 2006-12-06 18:01:18]
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supa7E7
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:01 am

The real story went on (or may be continuing) in the dark rooms of Wall St.

Delta's creditors hold the power. ALPA has come out against. The majority have been publicly silent.

If the really powerful creditors came out in favor of Mr. Parker, DL management would have no way to avoid this. It is too bad because the only really neutral parties -- the creditors -- have stayed quiet with their own analysis.

Doug says the merger would be good -- and he is biased. DL says it would be bad -- and they are incredibly biased too! Not only out of personal pride, but DL managers would lose their jobs. So the public airwaves have been filled with PR, not fair analysis.

Maybe the creditors have quietly phoned Delta and said they will stick with DL for now. In which case DL can confidently hold strong. Or, maybe US has another higher offer up their sleeve. After all, they predicted UA would bid against them, and that did not happen. So there's more money available to US to raise the bid, probably.
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TropicBird
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:04 am

Don't forget UAL/US as another possibility. Unlike DL and NW, UAL wants to merge with someone.
 
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Revelation
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:05 am

Looks like Doug Parker blinked first...
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kiramakora
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:06 am

Thank God. Or, in my case ... thank Gods.
 
ssides
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:12 am

Quoting N766UA (Reply 1):
You shouldn't force an unwilling participant into a merger through legal means.

Just because Delta's management was against the deal doesn't mean the entity is "unwilling." Delta couldn't pay its bills, meaning its creditors were really running the show with respect to big decisions like this.
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ThePalauan
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:13 am

If you have to ask someone to dance so many times and be rejected every time, you probably should just move on.

Delta reminds me of the one chick I wanted to dance with at prom: a cold shoulder.  crying  U.S. Airways should take after me and just give up after the 148,239,570,981,469,298,629,042nd time.  banghead 
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Blackbird
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:16 am

If NW and Delta merged, who would be on top?

And would it be a meatgrinder like AA and TWA with the TWA guys getting royally screwed?
 
HAL
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:21 am

Quoting Blackbird (Reply 21):
If NW and Delta merged, who would be on top?

And would it be a meatgrinder like AA and TWA with the TWA guys getting royally screwed?

No, it wouldn't be another AA/TWA. Those two airlines were different unions, and NW and Delta are the same. I'm sure there would be some give/take in the merger of seniority lists, but it wouldn't be a 'staple job' like AA did to TWA.

HAL
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panamair
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:27 am

Quoting TropicBird (Reply 16):
Don't forget UAL/US as another possibility

That would be an expensive proposition since neither is in Ch.11 anymore. DL was/is an attractive candidate to Parker and Tilton because it is still in Ch.11. Once DL leaves Ch.11, Parker wouldn't be half as interested because much of his $1.65 billion in savings/synergies would be difficult to achieve.
 
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4everRC
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 2:56 am

Quoting Malaysia (Reply 14):
I want US and NW cause I want to see a US Airways A330 in BKK

Don't hold your breath. I've supported Big Red for a long time, but I see a US/NW merger as a good thing. That said, and as in the US/DL deal, IMHO the NW name will be retained because of brand recognition.

Anyone with photoshop wanna speculate on a NW/US livery?
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jmc1975
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 3:00 am

Quoting 4everRC (Reply 24):
Don't hold your breath. I've supported Big Red for a long time, but I see a US/NW merger as a good thing. That said, and as in the US/DL deal, IMHO the NW name will be retained because of brand recognition.

Not so sure about that. Northwest doesn't have the brand recognition or the association with excellence as Delta does. US Airways is by far a more geographically correct name for a truly global airline from the US. With that said, Parker and Kirby would make the ultimate decision.
.......
 
A330323X
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 3:14 am

Quoting HAL (Reply 22):
No, it wouldn't be another AA/TWA. Those two airlines were different unions, and NW and Delta are the same.

How do you figure that NW and DL have the same unions?  Confused

There are other employee groups other than the pilots, you know.  Wink
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codeshare
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 3:21 am

Well, they just barely ended the US Airways/America West deal so IMHO going into another M&A is too early. They should sort it out first see how it's coming along and in a few years time think of another move.

KS/codeshare
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N328KF
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 3:26 am

Quoting A330323X (Reply 26):

There are other employee groups other than the pilots, you know.

At DL, only the pilots are unionized.
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PHLBOS
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 3:30 am

Quoting TropicBird (Reply 16):
Don't forget UAL/US as another possibility.

A possibility that was rightfully shot down by the DOJ several years ago and that was, of course, with the old (pre-HP merger) US. Due to its much larger size, a UA/HP-US merger would have even more antitrust & monopoly issues than the one proposed in 2000-2001
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A330323X
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Continental Dumps RegionsAir; PKB/CKB Want Change

Thu Dec 07, 2006 4:07 am

Quoting HAL (Reply 22):

No, it wouldn't be another AA/TWA. Those two airlines were different unions, and NW and Delta are the same.



Quoting A330323X (Reply 26):
How do you figure that NW and DL have the same unions?

There are other employee groups other than the pilots, you know.



Quoting N328KF (Reply 28):
At DL, only the pilots are unionized.

That's exactly my point. How are non-unionized groups at DL "the same" as NW groups represented by AFA, IAM, AMFA, et al?
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Pope
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 4:08 am

Quoting N766UA (Reply 1):
You shouldn't force an unwilling participant into a merger through legal means

Wait wait wait. A company exists for the benefit of its owners the shareholders. It does not exist for its own good. Therefore if DL's shareholder (or creditors because it is in bankruptcy) approve the merger, DL's mgt or employees opinion on the matter should be irrelevant.
Hypocrisy. It's the new black for liberals.
 
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SLCUT2777
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 4:50 am

Quoting PHLBOS (Reply 29):
A possibility that was rightfully shot down by the DOJ several years ago and that was, of course, with the old (pre-HP merger) US. Due to its much larger size, a UA/HP-US merger would have even more antitrust & monopoly issues than the one proposed in 2000-2001

Given the large western presence of the old HP flag, there would be some definite issues involved in such a plan. I honestly think given the route structures, fleet commonality, and worker culture HP/US would go well with NW. But that said I think Parker and Kirby need to finish with their own house first before trying to acquire a bigger fish in the pond thats had some problems.
As for DL, I honestly think they can come out standing alone and look much better than UA did earlier this past year. Perhaps after awhile if DL wants someone to merge with or need another base with a good feed for more trans-Pacific flights to Asia, then I really think going after AS and getting a good base in SEA would be great for them. If they were to get a new ATL-PVG flight next year, then they could apply for a subsequent SEA-PVG slot which I think would sell very well. SEA I think would also welcome such a move since DL might be the key for them to get more Asia flights since they can't attract many of the foreign carriers to do such with YVR in such close proximity. DL could then gain back some of what they lost during the 1990s when they squandered so much of their LAX network. Additionally they could make the deal with SkyWest who could acquire Horizon in the deal. I think that is why Grinstein felt so strongly about controlling DL's destiny as a stand alone unit so such a move could be made.
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 6:17 am

Quoting Jmc1975 (Reply 25):
Northwest doesn't have the brand recognition or the association with excellence as Delta does.

NW may not have a reputation for excellence but, they have extremely strong name recognition, especially in Asia where NW has a very long history and very extensive route network. US on the other hand, has nearly zero name recognition in that region. In the event of any hypothetical NW/US merger, it would be to US's best interest to keep the NW name rather than naming the new entity US Airways.
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SHUPirate1
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 6:38 am

Quoting N328KF (Reply 28):
At DL, only the pilots are unionized.

You forgot about the dispatchers, who are also unionized.
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LY777
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 6:56 am

good news if they do not merge indeed
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ScottB
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:05 am

Well, this explains the news release that popped up today from US Airways:

US Airways Provides Update On Next Steps for Proposed Merger With Delta

Essentially, Delta's management must agree to let US Airways' management look at the books in order to let things go any further -- but it doesn't appear that they're inclined to do so, nor does it appear that a majority of the unsecured creditors are going to try to force Delta's management to do it either.

And honestly, given that reports are putting the market value of a reorganized, standalone Delta at $10-12 billion, the current offer on the table won't be enough.
 
MCIGuy
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:08 am

Excellent! I'm not fond of hostile takeovers anyway. Besides, I really didn't want to stop flying DL forever.  Wink
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bucky707
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:11 am

Roadblock for US Air

By Ted Reed
TheStreet.com Staff Reporter
12/6/2006 3:47 PM EST


Pilots at Delta Air Lines (DALRQ - commentary - Cramer's Take) have stipulations in their contract that would prevent a merger with US Airways (LCC - commentary - Cramer's Take - Rating) from taking place, the chairman of the pilots union said Wednesday.

The labor pact, which has been approved by the bankruptcy court, "is a controlling agreement in this merger, and it has several provisions that prevent [US] Airways from merging with Delta," said Lee Moak, in an interview. The contract sets a minimum for block hours flown by Delta pilots, strictly controls the use of regional jets and gives Delta pilots a say over code-share agreements.

Last month, US Airways mounted an $8 billion hostile takeover bid for Delta. The acquisition offer came barely a year after a 2005 merger in which America West Airlines took over the former US Airways and assumed its name. Delta sought bankruptcy protection in September last year.
Moak spoke by phone from Crystal City, Va., site of the one-time headquarters of the former US Airways. That facility has since been shut down, idling several hundred workers.

"This is the definition of synergies," he said. "We will keep your name but close down your facilities, terminate, furlough and use attrition to get rid of your employees, and somehow that's best for the airline industry." He said several thousand Delta employees, including some pilots, would lose their jobs in a merger with US Airways.

Moak said he had questioned US Airways executives about their knowledge of pilot contract provisions. "They said they were 'technicalities,' at first, and now it's 'items not anticipated,'" he said. "They really have underestimated the labor component of this merger."

US Airways spokesman Phil Gee said the airline has no plans to reduce the number of Delta pilots. "We didn't furlough one pilot, or any other represented employee, with the America West-US Airways merger, and we have stated from the get-go that we believe the same will hold true [in this case] ," he said.

Pilots are in a position to influence the outcome of the merger effort not only because of their contract but also because they are members of the Delta creditors committee and hold $2.1 billion worth of unsecured debt. That's about a one-eighth share of the total, Moak said. The creditors must approve whatever plan of reorganization is to emerge from the bankruptcy court.

The Delta pilots' contract was negotiated under difficult conditions in court, Moak said. While salaries and benefits were reduced, the pilots gained ironclad assurances that their remaining jobs would be protected. Delta has about 6,500 pilots, down from roughly 10,000 in 2001.

One contract provision sets a floor for block hours flown by Delta pilots. Another says that if a single Delta pilot is furloughed, the airline must not operate regional jets with more than 70 seats. The provision could impact not only Delta's 76-seat regional jets but also 90-seat planes flown by US Airways.

A third provision gives pilots a say over code-share agreements. "We will not approve any code shares with US Airways or America West," Moak said. In the US Airways and America West merger, the route systems have been combined through code shares until the airlines can secure a single operating certificate.
 
floridaflyboy
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:14 am

Thank you Doug for being man enough to call off this nightmare!
Good goes around!
 
panamair
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:19 am

Quoting Floridaflyboy (Reply 39):
Thank you Doug for being man enough to call off this nightmare!

The nightmare is not over yet - see the official US press release in Reply 36.
 
HAL
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:24 am

Quoting Pope (Reply 31):
Wait wait wait. A company exists for the benefit of its owners the shareholders.

...and it's employees! Employees have as much a stake - if not more - than any shareholder. That is a fact often forgotten in the pursuit of mere capital gain. If the employees have invested years of sweat and effort into the company they are owners just as much as shareholders, and any merger/change should consider their situation too.

HAL
One smooth landing is skill. Two in a row is luck. Three in a row and someone is lying.
 
vega
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:27 am

Quoting ScottB (Reply 36):
Essentially, Delta's management must agree to let US Airways' management look at the books in order to let things go any further -- but it doesn't appear that they're inclined to do so, nor does it appear that a majority of the unsecured creditors are going to try to force Delta's management to do it either.

And honestly, given that reports are putting the market value of a reorganized, standalone Delta at $10-12 billion, the current offer on the table won't be enough

I think you may be assuming too much too early. This entire theatrical episode will not come to a conclusion until DL submits their Restructuring Plan later this month - which will be publicly available. At that time US, the unsecured shareholders and the Judge can comment on it's viability.

Do you mind exposing the source of the Reports of a $10B-$12B DL post bankruptcy market value? I'm not doubting you, I'd just like to know who made that claim and the dirivation of the value.
We are but a moment in this vast Universe and when gone we will never have existed.
 
USPIT10L
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:31 am

Quoting HAL (Reply 41):
...and it's employees! Employees have as much a stake - if not more - than any shareholder. That is a fact often forgotten in the pursuit of mere capital gain. If the employees have invested years of sweat and effort into the company they are owners just as much as shareholders, and any merger/change should consider their situation too.

But unless they're also shareholders, they get no say in how their company is run. This deal was made to the Delta creditors, not the employees or executives, and it is up to the creditors to make their minds up--get money up front in cash from US Airways, or get potentially nothing but a worthless piece of paper (their stocks/compensation) from Delta after emergence.
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SLCUT2777
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:35 am

Quoting ScottB (Reply 36):
And honestly, given that reports are putting the market value of a reorganized, standalone Delta at $10-12 billion, the current offer on the table won't be enough.

Boeing, American Express, GE Capitol Finance as well as US Bankcorp all know this which is why they really don't want to commit to this despite all of the hype from US/HP and Parker on the matter. DL's cash flow has improved nearly 3x since they filed some 15 months ago for Chapter 11, and I think Grinstein, Whitehurst and Bastian all feel they have a plan that will beat anything that Parker and Kirby can put on the table.
While the deal isn't completely off the table yet, I think Parker has started to blink, and I give it just a short time until this is all over for this insane proposal. Hopefully if any good comes of this it will hasten DL's re-organization and the creditors can take a good solid look at who goes into this new board. I think the creditors committee is about to tell Parker and Kirby that their proposal is "Snake-Oil" for DL's past problems. I know I've used that term several times, but that is in all honesty what it really is.
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
 
aircanada014
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:35 am

I do hope this plan fall through cause DL is not a good canidate to merge. I think US should be looking at better airline with damn good reputation, better service, better routing, good management. CO would be nice even UA or maybe NW but not DL.. I don't want to fly DL if they want to land on grass hehe. inside joke.
 
freedom747
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:38 am

Thought that US Airways wasn't gonna make it THIS far (2006). Thought they'd die off years ago. In my heart, I knew that any merger with the Big "D", would simply fizzle in todays environment. Case closed, in my book.
 
panamair
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:40 am

Quoting Vega (Reply 42):
Do you mind exposing the source of the Reports of a $10B-$12B DL post bankruptcy market value? I'm not doubting you, I'd just like to know who made that claim and the dirivation of the value.

I've seen it mentioned in a couple of articles - one of which is linked below from the AJC: - it's the very last paragraph:

http://www.ajc.com/business/content/...006/11/21/1122bizdeltaworkers.html

No other details about how that number/range was derived...
 
LAXdude1023
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RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:43 am

Quoting HAL (Reply 41):
...and it's employees! Employees have as much a stake - if not more - than any shareholder. That is a fact often forgotten in the pursuit of mere capital gain. If the employees have invested years of sweat and effort into the company they are owners just as much as shareholders, and any merger/change should consider their situation too.

Yes yes yes!!! This is what is forgotten way too much. A company is only as good as its employees. Statements like:

Quoting Pope (Reply 31):
Wait wait wait. A company exists for the benefit of its owners the shareholders. It does not exist for its own good.

dont take into consideration consequences like layoffs and the effects of low Job security and low morale have on a company. The employees are the back bone of any company (not the shareholders).
It is what it is...
 
vega
Posts: 1161
Joined: Sat Aug 27, 2005 8:56 am

RE: USAir May Drop Delta Deal!

Thu Dec 07, 2006 7:46 am

Kirby refutes USA Today:

http://www.bizjournals.com/charlotte...006/12/04/daily29.html?jst=b_ln_hl

[Edited 2006-12-06 23:47:09]
We are but a moment in this vast Universe and when gone we will never have existed.

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