RL757PVD
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US Raised Bid For DL

Wed Jan 10, 2007 8:54 pm

Experience is what you get when what you thought would work out didn't!
 
RL757PVD
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RE: US Raised Bid For DL

Wed Jan 10, 2007 8:57 pm

TEMPE, Ariz., Jan. 10 /PRNewswire-FirstCall/ -- US Airways Group, Inc. (NYSE: LCC - News) today announced that it has increased its offer to merge with Delta Air Lines, Inc. (OTC: DALRQ - News). Under the revised proposal:

* Delta's unsecured creditors would receive $5.0 billion in cash and
89.5 million shares of US Airways stock.

* When applying the same valuation methodology and assumptions as
described in Delta's Disclosure Statement, US Airways' advisor
Citigroup estimates this new proposal will provide between $12.7 and
15.4 billion in value to Delta's unsecured creditors, which represents
a significant premium over the $9.4 to 12.0 billion valuation that
Delta places on its stand-alone plan.

* Based on the closing price of US Airways stock as of Tuesday,
Jan. 9, 2007, the new proposal has a current market value of
approximately $10.2 billion.

The merger is expected to be accretive to US Airways' earnings per share in the first full year after completion of the merger.

The increased offer is set to expire on Feb. 1, 2007 unless there is affirmative creditor support for commencement of due diligence, making the required filings under Hart-Scott-Rodino, as well as the postponement of Delta's hearing on its Disclosure Statement scheduled for Feb. 7, 2007.
Experience is what you get when what you thought would work out didn't!
 
RL757PVD
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:08 pm

US has yet to say anything on how this deal is good for anyone except stockholder pockets. Nearly every pasenger and employee would loose under this scenario. Hopefully the DOJ will agree...or better yet, hopefully the shareholders will see all the flaws that US "will discuss later" and see that there is more certainly in the execution of the Delta plan.
Experience is what you get when what you thought would work out didn't!
 
MD-90
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:12 pm

And people said having Morgan Stanley onboard wasn't going to change much. Wow.
 
UAL777UK
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:16 pm

This is a rather larger increase, they just wont let it go will they. Interesting to see DL's response.
 
RL757PVD
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:26 pm

The headline says much higher numbers but the fine print says:

Quote:
the new proposal has a current market value of
approximately $10.2 billion.

Still a sizeable increase, but US has still yet to come clean on details behind the merger such as realy job cut #'s, and real aircraft cut #'s.


The only time that 1 + 1 doesn not = 2 is in airline mergers!!!


the other thing i find interesting is the expiration date, the creditors were supposed to vote in the feb-april timeframe, now they are trying to rush them...hmmm
Experience is what you get when what you thought would work out didn't!
 
Dtw757
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:28 pm

It's hard for me to understand where a company that was in bankruptcy itself and days from shutting down has had this kind of turn around and now wants to buy Delta...just amazing. Keep Delta My Delta
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ERJ170
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:33 pm

I don't care what they do..

I hope that this does not go through.. I can only see disaster in the future... As the old gospel song says.. "sweet around your own front door, before you try to sweep around mine".

I've flown US Airways lately, and they still have a LONG way to go on their customer service, aircraft revitalization, and operation sync before they try to go though the same problem again.

I see I shall probably have to email to voice my opinion that they should not go through with it. I wonder how many of these emails they have received??
Aiming High and going far..
 
D L X
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:34 pm

Quoting RL757PVD (Reply 2):
US has yet to say anything on how this deal is good for anyone except stockholder pockets.

That's not true. They've also said that it would produce a better, more stable airline for consumers.

Quoting UAL777UK (Reply 4):
they just wont let it go will they.

February 1 is right around the corner. This new offer is part increase and part exit strategy. if nothing is done by 2/1, DL stays with its current management.
 
airlinelover
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:34 pm

Quoting UAL777UK (Reply 4):
This is a rather larger increase, they just wont let it go will they. Interesting to see DL's response.

Hopefully Delta's response will be

"Go to Hell"


Chris
Lets do some sexy math. We add you, subtract your clothes, divide your legs and multiply
 
flyingchoirboy
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:40 pm

Why can't US Airways stop being a bully? I think plenty of people have made it clear that DL should emerge as an independant company. This will reduce competition, increase fares across the country, and cost many good-working people their jobs. I predict that this will simply not happen.

Keep Delta My Delta!
 
whappeh
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:42 pm

Quoting Flyingchoirboy (Reply 10):
Why can't US Airways stop being a bully?

I am just shocked to see US Airways being called a bully by people in the industry. I can recall back in the day where they were the little guy.
-Travel now, journey infinitely.
 
RL757PVD
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RE: US Raised Bid For DL

Wed Jan 10, 2007 9:45 pm

Quoting D L X (Reply 8):
That's not true. They've also said that it would produce a better, more stable airline for consumers.

Both airlines will be profitable in 2007 (operationally, excluding DL Ch11 writeoffs)

Less seats mean less options ans higher fares

Less planes mean less employees (1000's)

Duplicate hubs mean even mroe massive job cuts

Opposite fleets mean increased costs, thus less profits

More debt means more interest, thus less profits

Merger would likely trigger others, creating airline combinations with superior networks to US/DL, further diminishing said synergies.

Other combines airlines would have sizeable atlantic and pacific ops, US/DL would be horribly one-sided.

Airports in the eastern US will see a sharp decrease in competition, competition results in better schedules and fares for the consumers.

Dozens of airports in the east would loose competition all together





So where exactly do the cunsumers and employees win?
Experience is what you get when what you thought would work out didn't!
 
upsmd11
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:08 pm

Quoting RL757PVD (Reply 2):
US has yet to say anything on how this deal is good for anyone except stockholder pockets. Nearly every passenger and employee would loose under this scenario. Hopefully the DOJ will agree...or better yet, hopefully the shareholders will see all the flaws that US "will discuss later" and see that there is more certainly in the execution of the Delta plan.



Quoting RL757PVD (Reply 12):
So where exactly do the consumers and employees win?

A merger like this does not seem good on the surface but the industry is in dire need of some changes. There are too many airlines and people's jobs and airline business is at risk should anything devastating happen in the economy or some other terrorist act like 9/11 happens.

A business is "IN BUSINESS" for the stockholder. It seems like a cold statement but a business is not in business just to be nice, have pretty planes and excite us here on A.net. If a company does not make profits and make wise decisions for the future they are doing the stockholders a disservice.

With that being said, the airline industry is a service industry and they must serve the customer in order to gain revenue paying customers. I have flown DL quite a bit lately and I do not find them offensive but I also do not find them superior to US either. On US when I fly trans-con or on any of the Airbus single aisle aircraft I can plug in my laptop -- I can't do that on DL.

I have also flown DL and US internationally in business class. The US A330 experience is fantastic and easily competes with the DL business class on the 767. I will say that some of the old-time Delta flight attendants are great and made even Air France look bad on a trip I took to Paris flying on Air France over and Delta back.

Anyway, this is going to be an interesting ride and if Delta doesn't bite on the offer from US then some sort of merger elsewhere will take place and maybe US and DL both will be in trouble from the other newly joined airline.

Cheers,
John
 
ltbewr
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:09 pm

To me the only winners in this deal are the deal makers and a few executives that bail out in time. To me it is foolish to add more money to the deal as the airline industry is a long term loser and can be ruined in an instant if there were to be another 9/11 like event in the USA or elsewhere.
 
PHX Flyer
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:17 pm

Quoting DTW757 (Reply 6):
It's hard for me to understand where a company that was in bankruptcy itself ...

Sorry, you have to get your facts straight. The company bidding for Delta, is America West, which renamed itself US Airways after taking over the bankrupt east coast carrier of the same name.
Interestingly, you do not hear a lot of complaints from US Airways (east) employees about America West management. Most of those who have worked for them for a while are actually full of praise.
 
RL757PVD
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:20 pm

Quoting UPSMD11 (Reply 13):
but the industry is in dire need of some changes

I dont doubt that for a minute, but US has failed to consider how the new airline would compete with other merged airlines.

Lets assume that UA+CO and AA+NW happen... both combined airlines are larger with more ballanced networks. Significan Atlantic, Pacific, Latin AM, Carib and South American Markets... US/DL will be severely lacking especially in the pacific. Having larger airlines with larger networks than US/DL will significiantly erode the synergies US is boasting about.


Mergers YES
DL/US NO
Experience is what you get when what you thought would work out didn't!
 
redflyer
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:33 pm

Quoting D L X (Reply 8):
That's not true. They've also said that it would produce a better, more stable airline for consumers.

Oh, sure, just like the US/HP merger has created a better, more stable airline for consumers  Yeah sure

That merger, while profitable for shareholders, has created two diverse companies with opposing employees within a single company. Given DL's long and deep cultural roots, we're now going to end up with three diverse companies within a company.
My other home is in the sky inside my Piper Cherokee 180.
 
DeltaWings
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:38 pm

http://www.chron.com/disp/story.mpl/ap/fn/4460206.html

Another good link

The increased bid includes 89.5 million shares of US Airways stock and $5 billion in cash. The original offer included 78.5 million shares of US Airways stock and $4 billion in cash. The value of the increased bid could go even higher if US Airways' stock rises after the market opens later Wednesday.

Executives of Atlanta-based Delta have said they oppose a buyout by US Airways. The nation's third-largest carrier has filed a reorganization plan that calls for it to emerge from bankruptcy by the middle of this year as a standalone company worth $9.4 billion to $12 billion.

Based on the Delta's valuation method, US Airways estimated that its increased bid could actually be worth $12.7 billion to $15.4 billion.

Despite the position by Delta management, Delta's unsecured creditors committee in its bankruptcy case will play a key role in deciding the airline's future course. The committee had said prior to Wednesday that it was reviewing both Delta's standalone plan and US Airways' buyout offer.

Daniel Golden, a lawyer for the creditors committee, did not immediately return a call Wednesday seeking comment on US Airways' raised offer.

The Feb. 7 bankruptcy hearing would be to consider approval of Delta's disclosure statement relating to the carrier's standalone reorganization plan.

The disclosure statement includes details on Delta's operations. If the statement is approved, that means Delta can begin soliciting votes on its reorganization plan, which typically takes four to eight weeks.

Parker has said previously that if that hearing were to go forward it could increase the urgency of US Airways' bid because US Airways hopes to consummate its deal to buy Delta before Delta emerges from Chapter 11.
Homer: Marge, it takes two to lie. One to lie and one to listen.
 
whappeh
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:40 pm

Quoting RedFlyer (Reply 17):
has created two diverse companies with opposing employees within a single company.

Thats the one thing I don't get about this. Are Delta employees that damn loyal to their current Management? They aren't loosing the name, or evidently, their pay scale. I've never heard of any company ever in which a merge happened and the employees were just like "Well, these new guys paying the bills are big asses, I can't work under this condition so forget this I'm out". If thats the attitude they have, that is just shocking and immature. A lot of these issues I've seen attached to the "negative" sides of this merger are just nonsensical issues raised by people that have more attachment to the romantic idea of Aviation and the industry while being casual observers from a College Dorm Room.
-Travel now, journey infinitely.
 
NADC10Fan
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:43 pm

Quoting RL757PVD (Reply 16):
Quoting UPSMD11 (Reply 13):
but the industry is in dire need of some changes

I dont doubt that for a minute, but US has failed to consider how the new airline would compete with other merged airlines.

Lets assume that UA+CO and AA+NW happen... both combined airlines are larger with more ballanced networks. Significant Atlantic, Pacific, Latin AM, Carib and South American Markets... US/DL will be severely lacking especially in the pacific. Having larger airlines with larger networks than US/DL will significiantly erode the synergies US is boasting about.

Mergers YES
DL/US NO

I think you've hit the nail sqaurely on the head here.

While I've taken on some of the most rabid of the USAirways cool-aid drinkers, I'm by no means opposed to a merger which makes sense. And therein lies the problem with DL/US ... but I won't rehash the points made here just above and fleshed out so well elsewhere.

Far more learned people have said that consolidation is inevitable in the industry and have given reasons for it; I am certainly inclined to trust that analysis. I blame Doug Parker not at all for seeking to be in the front of that wave; I simply believe he would be better advised seeking both a) a more willing and b) a more strategically complimentary partner. Such would have to be more felicitous than a shotgun marriage of this sort ...
TANSTAAFL!
 
CVG72
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:52 pm

Why can't US stop bullying a company that doesn't want to be taken over? This was rediculous the first time, now it's just plain silly the second time. Like RL757PVD said, they lack service in the pacific, and I think they'd be smashed if the other two mergers happen. I'm not a really smart guy, but this isn't the greatest of ideas.

Keep Delta Yours Mine and Ours,
CVG72

Cincinnati Enquirer Article:
http://news.cincinnati.com/apps/pbcs.../20070110/BIZ01/301100008/-1/CINCI
Roll Tide // Next: UA/EV/LH CVG-EWR-FRA-DUS-MUC-EWR-CVG
 
bucky707
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RE: US Raised Bid For DL

Wed Jan 10, 2007 10:57 pm

Quoting Whappeh (Reply 19):
Are Delta employees that damn loyal to their current Management? They aren't loosing the name, or evidently, their pay scale. I've never heard of any company ever in which a merge happened and the employees were just like "Well, these new guys paying the bills are big asses, I can't work under this condition so forget this I'm out"

as a Delta employee I'd like to respond. First of all, I am pretty loyal to current management. I think they have done a great job of turning Delta around and we are poised to succeed in the future. But, having said that, If I believed that a merger with USAir would indeed provide a more secure and stable company for me to work for in the future, I would not oppose it. But that is not the case. I believe many employees, on both sides, but mostly on the Delta side, will lose their jobs. Further, I believe a merge between Delta and USAir does not make sense and will only lead to failure in the future.

Quoting NADC10Fan (Reply 20):
I'm by no means opposed to a merger which makes sense. And therein lies the problem with DL/US ... but I won't rehash the points made here just above and fleshed out so well elsewhere.

This sums is up for me. I am not against any merger at all. But, it has to make sense. Delta/USAir does not make sense, and would be back in bankruptcy in a few years.
 
positiverate
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:01 pm

Quoting DTW757 (Reply 6):
It's hard for me to understand where a company that was in bankruptcy itself and days from shutting down has had this kind of turn around and now wants to buy Delta...just amazing.

It's even harder for me to understand how a company that shed $5 billion in pension obligations to the PBGC, suddenly has $5 billion in cash to go acquire an airline. Seems to me Doug ought to take that cash and make his employees whole for their losses.

[Edited 2007-01-10 15:22:42]
 
whappeh
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:02 pm

Quoting Bucky707 (Reply 22):
as a Delta employee I'd like to respond. First of all, I am pretty loyal to current management. I think they have done a great job of turning Delta around and we are poised to succeed in the future. But, having said that, If I believed that a merger with USAir would indeed provide a more secure and stable company for me to work for in the future, I would not oppose it. But that is not the case. I believe many employees, on both sides, but mostly on the Delta side, will lose their jobs. Further, I believe a merge between Delta and USAir does not make sense and will only lead to failure in the future.

Kudos for the honest answer. Fair enough.

Edit: I just realized... so you're against the merger, however, if it goes through then what do you do? I said it seems absurd that a lot of Delta employees would not care to work for the "new" Delta management. What are your takes on that? Does your spite towards US Airways transcend any potential post-merger working environment?

[Edited 2007-01-10 15:07:02]
-Travel now, journey infinitely.
 
Logos
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:15 pm

Quoting CVG72 (Reply 21):
This was rediculous the first time,

I'm not sure what "rediculous" means, but this certainly wasn't ridiculous now or then.

For a long time people have been saying that the airline industry is doomed without some consolidation. Now US is pushing for it and everyone is all over them. Everyone here seems to be obsessed with the need for a "complimentary route structure" but have you considered that US is doing this to gobble up their closest competitor and improve their bottom line where they're strong? That's hardly unheard of in other industries.

Obviously that will have some negative impact for some current employees and probably for consumers as well. However, it is at least plausibly a step toward long term stability for the combined airline. I'll be the first to admit that I was really skeptical about the US/HP merger but it has worked better than I could have imagined. Doug Parker seems to have garnered the respect of the people working for him now and more broadly in the industry, so I don't think this can be rejected out of hand. That US is persisting in it and improving their original offer tells me that they see some long term value in a combined entity and has to be taken seriously.

I realize that many Delta passengers, employees and management would seem not to be in agreement, but that alone doesn't make it an absurd idea. Do I think there would be consolidation problems if it happened? You bet. However the idea is not as far out there as some people seem to think.

Cheers,
Dave in Orlando
Too many types flown to list
 
bucky707
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:21 pm

Quoting Whappeh (Reply 24):
I just realized... so you're against the merger, however, if it goes through then what do you do? I said it seems absurd that a lot of Delta employees would not care to work for the "new" Delta management. What are your takes on that? Does your spite towards US Airways transcend any potential post-merger working environment?

First of all, I am against this merger, not any merger.

Second, I don't have any spite toward USAirways, other than being upset they are trying to force a merger that does not make sense and I believe will result in another trip through bankruptcy in my future.

AWA has done a great job with the merger with USAirways. I have a family member who is on furlough from USAirways and friends at both AWA and USAirways. So I harbor no ill will toward them.

If this can't be stopped, I predict there will be a very, very hostile work environment for a long time. Look at the Delta/Western merger, which made sense, had very little overlap and was not a hostile takeover. There is still ill will among the empoyees over that one.

You just can't force a bad merger on an employee group and expect them to be happy about it.
 
william
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:25 pm

All the emotion is really moot. The DOJ and Congress ( and don't give me Congress cannot stop it...............they can apply pressure) are going to take a hard look at this. It isn't just US/DL,its the beginning of a consolidation of an industry that is just now getting back on its feet. More mergers mean more debt and junk bonds.................this is better how? I didn't think so. Oh,and just because Wall Street "thinks" there are too many seats out there,doesn't make them right. Wall Street has been wrong as many times its been right.
 
william
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:30 pm

One more thing..................Usually these things happen behind closed doors. The fact that US is upping the bid after a week of saying it was not planning on doing so speaks volumes. There are things going on behind closed doors that people on this site know nothing about. The fact that US did an about face and put a timeline on the deal when they stated they had no reason to withdraw the deal is sign they felt things not swinging their way. All the PR fluff releases cannot hide that.
 
whappeh
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:31 pm

Quoting Bucky707 (Reply 26):
If this can't be stopped, I predict there will be a very, very hostile work environment for a long time. Look at the Delta/Western merger, which made sense, had very little overlap and was not a hostile takeover. There is still ill will among the empoyees over that one.

This is still the one thing I'm trying to work out in my head. I can't grasp the hostility. Whats the point of it? Hostility between frontline employees? Hostility of Former Delta employees against the management? If its beyond your control, what purpose does the hostility serve? Why not just rally around and work hard to move the company forward?
-Travel now, journey infinitely.
 
Lumberton
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:37 pm

http://biz.yahoo.com/ap/070110/delta_us_airways.html?.v=22

Quote:
Parker said in an interview Wednesday that Delta's creditors committee did not ask US Airways to raise its offer, but it indicated it was having a hard time making up its mind.

"They were struggling with a decision and the analysis of our proposal versus that of Delta's standalone proposal," Parker said. "We just wanted to make it a much, much easier analysis for them, and today we've done that."

Delta said in a statement Wednesday that its board will do its duty to review the revised offer by US Airways. But, the airline added, "On its face, the revised proposal does not address significant concerns that have been raised about the initial US Airways proposal and, in fact, would increase the debt burden of the combined company by yet another $1 billion."

Doesn't Boeing head the creditors committee? What surety can US give them that a merger won't create a mega Airbus buying machine?
"When all is said and done, more will be said than done".
 
Spoke2Spoke
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:38 pm

The yahoo article sites that no layoffs will come for DL or US employees as a result of the merger. Also, all employees will be brought to the higher-cost pay scale for that function across both airlines. So potentially, a bunch of employees could make more money, raising the market value of airline professionals.

How then is this merger bad for employees? Maybe folks think there is no way this merger can occur without a significant workforce reduction or layoffs. Everyone looks at the overlapping route structure and assumes they'll need to reduce CVG or PIT or SLC or even CLT. I too have some reservations about merging airlines with operation centers so close together. But if they're speaking truthfully about no layoffs and moving everyone to the highest-paying structures, this may be good for US, DL and all airline employees.
...carelessness and overconfidence are usually far more dangerous than deliberately accepted risks. - Wilbur Wright
 
TeamAmerica
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:42 pm

Quoting RL757PVD (Reply 2):
US has yet to say anything on how this deal is good for anyone except stockholder pockets.

The stockholders own the airline, and in the real world that's what matters. I own stocks, and I expect the management of the companies I "own" to make me money. dollarsign 

Quoting Airlinelover (Reply 9):
Hopefully Delta's response will be

Unfortunately it's the response from Delta's creditors that matters. Delta can scream all they want, but in bankruptcy their power is pretty limited.

Quoting UPSMD11 (Reply 13):
A business is "IN BUSINESS" for the stockholder. It seems like a cold statement but a business is not in business just to be nice, have pretty planes and excite us here on A.net. If a company does not make profits and make wise decisions for the future they are doing the stockholders a disservice.

 checkmark Well said. Sounds coldhearted, but business is coldhearted at the corporate level.

Quoting LTBEWR (Reply 14):
To me it is foolish to add more money to the deal as the airline industry is a long term loser and can be ruined in an instant

Ditto that. It's a sexy business, but there are so many better places to put your money.

Quoting CVG72 (Reply 21):
Why can't US stop bullying a company that doesn't want to be taken over?

It's business, not bullying, and as a bankrupt company Delta is very vulnerable. I recall losts of postings early on about how the bankruptcy was a good thing for Delta, but here we see some real world consequences looming. Delta doesn't control its future; the creditors do.

I'm very pessimistic about DL surviving as we know it. The name will remain, but Mr. Parker looks likely to get his way. He may come to regret it... weeping 
Failure is not an option; it's an outcome.
 
RL757PVD
Topic Author
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:46 pm

Quoting TeamAmerica (Reply 32):
Mr. Parker looks likely to get his way. He may come to regret it...

Mike Boyd said it best with ....US sees a window of opportunity, too bad the window is on the 40th floor....
Experience is what you get when what you thought would work out didn't!
 
panamair
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:47 pm

Quoting Logos (Reply 25):
I'll be the first to admit that I was really skeptical about the US/HP merger but it has worked better than I could have imagined. Doug Parker seems to have garnered the respect of the people working for him now and more broadly in the industry, so I don't think this can be rejected out of hand. That US is persisting in it and improving their original offer tells me that they see some long term value in a combined entity and has to be taken seriously.

Has it occured to you that perhaps the US-HP merger has been successful in delivering value because of the COMPLEMENTARY nature of the merger? Each carrier was able to plug the other's critical gaps and holes - US provided HP with reach into the Northeast and Southeast while HP provided US broader and deeper access to the West. The complementary merger allowed US Airways to become a much stronger national player than either US or HP alone could have done. Imagine if US and HP had overlapping route structures, what do you think the combined US-HP would like today? It would still have gaps similar to its previous two carriers - would the combined US-HP have become a more credible national player? Now, transpose this to the US-HP and DL case - everyone admits there is overlap; so a combined US-HP-DL will continue to have some of the same weaknesses as their predecessors - exactly how does it help the combined entity to be a more powerful or global player?

Complementary combinations deliver FAR MORE VALUE to all stakeholders than overlapping ones based on cuts and eliminations. Eliminating a competitor may provide temporary short term salvation, but in the medium to longer term, comes up short in the value creation department.
 
redflyer
Posts: 3882
Joined: Thu Feb 24, 2005 3:30 am

RE: US Raised Bid For DL

Wed Jan 10, 2007 11:49 pm

Quoting Whappeh (Reply 19):
A lot of these issues I've seen attached to the "negative" sides of this merger are just nonsensical issues raised by people that have more attachment to the romantic idea of Aviation and the industry while being casual observers from a College Dorm Room.

As a business owner and economics major in undergrad years ago, I have no romantic notions about any industry. Indeed, my philosophy in business is "Evolve or die". I'm just picking bones because of what I've seen first hand as a consumer. And let's face it: the consumer is what ultimately drives the profitability of the airline industry, including US.

I flew US the week before Christmas on a ticket that I purchased on their website that was from PHX-MCO. Yet, when I checked my bag in at the airport, the US rep behind the counter said, after I told her where I was flying to, "We don't fly to Orlando". For a moment I thought I was at the wrong airline counter. Then she punched some information into her console and said, "Oh, you're flying America West; US Airways doesn't fly to Orlando from Phoenix, but America West does." I was dumbfounded and didn't say a word. Just thanked her when she took my bag and I moved on.

While mergers are difficult to implement, the first place they should be implemented is on the customer front. To think that after more than a year that employees from two different companies that were merged would have that kind of attitude is totally shocking. I can only imagine what it will be like once (if) the merger with DL goes through.

I'm all for survival of the fittest when it comes to business. Heck, I don't even think a business should be given a second chance via bankruptcy -- if you can't survive financially then you just can't survive. But if I were a shareholder of US, I'd be very concerned about the lack of cohesiveness at the airline between the old US employees and the old HP employees and I would be telling Boy Wonder Parker to get his own house in order first.

Quoting Whappeh (Reply 29):
I can't grasp the hostility. Whats the point of it? Hostility between frontline employees? Hostility of Former Delta employees against the management? If its beyond your control, what purpose does the hostility serve? Why not just rally around and work hard to move the company forward?

I rarely look up user's profiles, but after that comment I had to look at yours. Given your relatively young age, I'd say you need a lot more exposure to real-world experiences. While your attitude is on the mark, it reflects an idealistic and, unfortunately, unrealistic view.

Best regards,

R
My other home is in the sky inside my Piper Cherokee 180.
 
Bicoastal
Posts: 2446
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:52 pm

TeamAmerica....great response. Nice to have a voice or two of reason and realism on this forum....and especially on this topic.

[Edited 2007-01-10 15:57:20]
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positiverate
Posts: 1543
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:53 pm

Quoting Spoke2Spoke (Reply 31):
The yahoo article sites that no layoffs will come for DL or US employees as a result of the merger. Also, all employees will be brought to the higher-cost pay scale for that function across both airlines. So potentially, a bunch of employees could make more money, raising the market value of airline professionals.

Of course the US management is saying that. The political pressure would be intense if they promised significant layoffs. However, what they are saying with regards to employee staffing vs. what they are saying with regards to planned reductions in capacity and gains in efficiencies just doesn't jive. Thay want to merge the companies, reduce capacity by 15%, but continue to run the company with the same number of employees. That is a woefully inefficient operation, and ultimately US will have to lay off employees when they see their preciously touted "synergies" go out the window.
 
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scbriml
Posts: 13701
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:55 pm

Quoting RL757PVD (Reply 2):
US has yet to say anything on how this deal is good for anyone except stockholder pockets.

Er, isn't that exactly what every publicly owned company is in business for - to make money for their shareholders? scratchchin 

Quoting Flyingchoirboy (Reply 10):
This will reduce competition, increase fares across the country

But plenty of folks argue that there is too much competition and fares are too low. Make your minds up! yes 
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
bucky707
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RE: US Raised Bid For DL

Wed Jan 10, 2007 11:57 pm

Quoting Spoke2Spoke (Reply 31):
But if they're speaking truthfully about no layoffs and moving everyone to the highest-paying structures, this may be good for US, DL and all airline employees.

That in a nutshell is the question. Do you believe what Parker is saying. No matter what the plan really had in it, do you believe Parker would come out and publically state there will be furloughs?

The Delta pilots sit on the creditors committee, so our representative has seen the USAirways plan. Let me ask you this, if the plan did in fact not contain any furloughs, and did in fact end up putting the Delta pilots in a better situation, why would we oppose it?

The fact is the plan is not good for the Delta pilots or the Delta employees. It calls for parking of about 80 mainline Delta airplanes and the furlough of about 1000 Delta pilots. Add to that an equivalent percentage of non contract Delta employees.

Parker may in fact believe this is a good merger, but he is not being honest with regards to there being no furloughs.
 
Bicoastal
Posts: 2446
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RE: US Raised Bid For DL

Thu Jan 11, 2007 12:01 am

Quoting Scbriml (Reply 38):
But plenty of folks argue that there is too much competition and fares are too low. Make your minds up!

Exactly.....and without Delta's death lock on ATL maybe everyones' darlings, Southwest and JetBlue can finally land in Georgia. That would be good for consumers and they'd likely hire a few laid off Delta workers....the ones with less hostility to change.
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SBN580
Posts: 374
Joined: Sat Mar 12, 2005 1:55 am

RE: US Raised Bid For DL

Thu Jan 11, 2007 12:02 am

Quoting Whappeh (Reply 29):
This is still the one thing I'm trying to work out in my head. I can't grasp the hostility. Whats the point of it? Hostility between frontline employees? Hostility of Former Delta employees against the management? If its beyond your control, what purpose does the hostility serve? Why not just rally around and work hard to move the company forward?

I think what you and others are not understanding is that at Delta there has been a long time corporate culture of family, service and tradition. Yes, this is a rarity amongst companies in the present day. This culture has suffered greatly under the last couple of managment teams before the present one. There is still however, a sense of their old corporate culture amongst many employees. I applaud this. "Keep Delta, My Delta," was not made up from some Atlanta PR firm, but a grassroots effort from employees. They have worked mightily to save their jobs, their company. They resent another company coming into hostily take from them the work they have done. Cynics may think this sappy and sentimental, but so what?

A Delta employee at SLC told me last month that while a merger might someday be inevitable, that this proposal was not one they were wanting. She seemed very harried as she told me how hard they were fighting for thier Delta. I told her I supported them and she thanked me.

You wondered, why if US bought Delta and the name Delta remained, what the big deal is? I can only say from a consumer and Delta FF point of view, that this to me would be false advertising. You can paint Delta on the planes all you want, but I would have no confidence that the service behind that name would be the same or trust that the HP/US managment team would be able to sew together the "new" Delta into a working company. I would feel my only way of making this point would be to take my business elsewhere. It is as simple as that.
North Central: Good People Made Their Airline Great! FLY MD-90 POWER! Keep 'em Flying DELTA Family!
 
panamair
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RE: US Raised Bid For DL

Thu Jan 11, 2007 12:04 am

Quoting Spoke2Spoke (Reply 31):
The yahoo article sites that no layoffs will come for DL or US employees as a result of the merger.

It's called involuntary attrition - think about it. Take the ground staff for example. There is a promised 10% capacity reduction and a host of overlapping stations. Headcount at these overlapping stations will have to be reduced to reflect the reduced number of flights at these stations. They may say "no layoffs" but what they mean is "we won't lay you off but you will have to move - we will need to redeploy you". Now how many of these people with families will be able to simply pick up and move? That way, they get their 'attrition' and continue to display their proud banner of "no layoffs".
 
positiverate
Posts: 1543
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RE: US Raised Bid For DL

Thu Jan 11, 2007 12:12 am

Quoting Bicoastal (Reply 40):
Exactly.....and without Delta's death lock on ATL maybe everyones' darlings, Southwest and JetBlue can finally land in Georgia. That would be good for consumers and they'd likely hire a few laid off Delta workers....the ones with less hostility to change.

And what's stopping them from flying into ATL now? B6 served ATL at one point, they couldn't make it work.

Also, you might not be aware, but there's a small LCC that operates out of ATL as well. It's called AirTran. Maybe you've heard of them? They seem to do pretty well from what I understand. So much for a "death lock" by DL.
 
SBN580
Posts: 374
Joined: Sat Mar 12, 2005 1:55 am

RE: US Raised Bid For DL

Thu Jan 11, 2007 12:14 am

Quoting RedFlyer (Reply 35):
I flew US the week before Christmas on anticket that I purchased on their website that was from PHX-MCO. Yet,nwhen I checked my bag in at the airport, the US rep behind the counternsaid, after I told her where I was flying to, "We don't fly tonOrlando". For a moment I thought I was at the wrong airline counter.nThen she punched some information into her console and said, "Oh,nyou're flying America West; US Airways doesn't fly to Orlando fromnPhoenix, but America West does." I was dumbfounded and didn't say anword. Just thanked her when she took my bag and I moved on.

Yes, as of last month the online ticket sites such as Travelocity listed the two airlines still as separate. I could not believe it! Now, try overlaying Delta onto all that. This truly makes me wonder whether or not this could all be congealed into one working entity.
North Central: Good People Made Their Airline Great! FLY MD-90 POWER! Keep 'em Flying DELTA Family!
 
D L X
Posts: 11701
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RE: US Raised Bid For DL

Thu Jan 11, 2007 12:20 am

Quoting RedFlyer (Reply 17):
Oh, sure, just like the US/HP merger has created a better, more stable airline for consumers

Actually, it has. The vast majority of people believe the US/HP merger has been a boon for both US and HP, AND a boon for the consumers.

Quoting CVG72 (Reply 21):
Keep Delta Yours Mine and Ours

Since when was it "your" Delta? Are you a stockholder? If you're an employee, I hate to say it, but Delta is not in business for you.
 
Logos
Posts: 608
Joined: Mon Jan 24, 2000 10:47 pm

RE: US Raised Bid For DL

Thu Jan 11, 2007 12:21 am

Quoting Positiverate (Reply 37):
That is a woefully inefficient operation, and ultimately US will have to lay off employees when they see their preciously touted "synergies" go out the window.

Agreed. For public consumption, of course they will say that there will be no layoffs, but the only logic for a merged airline screams for them. From a business standpoint that makes sense, but it doesn't play well.

I'm not enthusiastic about this combination, but I can see the logic behind it. I will say that all the talk of US's inferior service has to be balanced against the current Delta Connection product that is being put forth. After reading all the rants especially regarding Freedom (nee Mesa) taking over such a chunk of their business, I don't know if Delta has much room to talk. I'm not saying that US is great, but Delta has it's warts from a service standpoint as well.

I don't know if this will go through or if, ultimately, it's a good thing if it does. I do know that some form of consolidation will come sooner than later in the airline industry and Delta might do well to think about which dance partner they would like.

Cheers,
Dave in Orlando
Too many types flown to list
 
RL757PVD
Topic Author
Posts: 2551
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RE: US Raised Bid For DL

Thu Jan 11, 2007 12:26 am

Quoting Spoke2Spoke (Reply 31):
The yahoo article sites that no layoffs will come for DL or US employees as a result of the merger. Also, all employees will be brought to the higher-cost pay scale for that function across both airlines. So potentially, a bunch of employees could make more money, raising the market value of airline professionals.

I smell BULL$hit

How do you reduce flying by 10% without job cuts? Not only did they say reduced flying, but also getting rid of some aircraft. less planes and less flying means less jobs. Also no way in hell ATL and CLT would remain as is, again thousands of jobs lost! They need to really come clean on this issue, be honest and face reality. Part of whats fueled my opposition for the merger is US has made some unrealistic statements like these that bring honesty and "truthiness" into question.

As for the payscale, if they are going to move everyone to the higher teir, then why is it so hard to do that with the US/HP merger which has zero overlap and was much smaller???
Experience is what you get when what you thought would work out didn't!
 
airfrnt
Posts: 2003
Joined: Fri Jul 02, 2004 2:05 am

RE: US Raised Bid For DL

Thu Jan 11, 2007 12:33 am

I really should just stay out of A.net arguments over DL, since they pretty much have absolutely nothing to do with any facts, just emotions, especialy as far as the DL faction is concerned.

So much for not feeding the trolls.

Quoting RL757PVD (Reply 2):


US has yet to say anything on how this deal is good for anyone except stockholder pockets. Nearly every pasenger and employee would loose under this scenario. Hopefully the DOJ will agree...or better yet, hopefully the shareholders will see all the flaws that US "will discuss later" and see that there is more certainly in the execution of the Delta plan.

You do realize that by United States law, a corporation must act in the interest of it's shareholders, or if in bankruptcy, the interest of it's debtor committee?

Something I have yet to see a admission from any DL camper is that DL is in bankruptcy. There are only two reasons for DL to be in reorganization:
a) It's management sucks.
b) The industry sucks, and it's management was unable to save them.

In case A, US Airways management saves DL. In case B, consolidation in the marketplace saves DL.

Quoting William (Reply 27):
It isn't just US/DL,its the beginning of a consolidation of an industry that is just now getting back on its feet.

William, please understand that the vast majority of thinking in Wall Street, the investment Bankers, the DoT (people please note that the DoT has juristiction here, not the DoJ) and even to some degree in Congress is that the Airline sector must change to become competitive again. The DoT will enforce the law (as you saw last week with VS's puppet airline) but they will not block this merger, or any other merger as long as it is not AA and UA.

Quoting Lumberton (Reply 30):

Doesn't Boeing head the creditors committee? What surety can US give them that a merger won't create a mega Airbus buying machine?

"Boeing - Please sign off on this and we will buy 100 787s, just like we had promised Airbus, but are now off the hook for since they keep redesigning their plane"

That's all it takes. People keep arguing that Boeing doesn't want to see consolidation because they want more US carriers, but in reality the entire spending spree the last couple of years has been international in nature. The American carriers outside of a few 787s for NW and CO have not made their large purchases at all. If consolidation is what it takes for Boeing to get orders they will push that in a instant.
 
FFlyer
Posts: 552
Joined: Sat Nov 24, 2001 6:46 am

RE: US Raised Bid For DL

Thu Jan 11, 2007 12:42 am

Quoting AirFrnt (Reply 48):
"Boeing - Please sign off on this and we will buy 100 787s, just like we had promised Airbus, but are now off the hook for since they keep redesigning their plane"

That's all it takes.

But Boeing, and other creditors, might think as many here;

DL as a standalone carrier has a bigger chance to survive and buy (and pay) planes, than a merged US/DL.

This because other mergers would come, and make life extremely difficult for US/DL. Without this merger, there would not be an overall merger race in the foreseeable future.

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