bobbydgg
Posts: 92
Joined: Sun Feb 25, 2001 10:41 am

The Real Value In The US-DL Merger?

Fri Jan 12, 2007 9:44 am

In reading over both the US Airways merger proposal and DL's rebuttal, it seems to me that the unspoken value in the US-DL merger is the "New Delta's" ability to raise prices stemming from its market power as the largest airline in the world.

In its presentation, US emphasized only the synergies that the companies achieve by using the bankruptcy rules to reduce capacity and thereby improve profit margins. Obviously, US has downplayed the enhanced pricing power of the new airline due to anti-trust concerns.

For those with knowledge of the proposed transaction, what am I missing in terms of the merits of the US proposal?
 
airfrnt
Posts: 2002
Joined: Fri Jul 02, 2004 2:05 am

RE: The Real Value In The US-DL Merger?

Fri Jan 12, 2007 11:52 am

Quoting Bobbydgg (Thread starter):

For those with knowledge of the proposed transaction, what am I missing in terms of the merits of the US proposal?

It's a combination not only of reduced capacity driving up fares, but also in elimination of duplicated jobs (primarily management, but also gate staff, and some maintainence).

Also greater traffic into a hub helps demarginalize profitable international routes. In other words, that extra flight from spokane into Atlanta might help make a extra flight to LHR, which is money.
 
FlyDeltaJets87
Posts: 4479
Joined: Fri Aug 11, 2006 3:51 am

RE: The Real Value In The US-DL Merger?

Fri Jan 12, 2007 3:07 pm

Quoting AirFrnt (Reply 1):
In other words, that extra flight from spokane into Atlanta might help make a extra flight to LHR, which is money.

Kinda' hard to go direct from ATL to LHR.  wink 
"Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
 
Charliejag1
Posts: 226
Joined: Sun Aug 20, 2006 4:48 am

RE: The Real Value In The US-DL Merger?

Fri Jan 12, 2007 3:12 pm

Quoting FlyDeltaJets87 (Reply 2):
Kinda' hard to go direct from ATL to LHR

Wait, Hartsfield isn't on the list?