Alitalia744
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Delta May Start Merger Mania

Wed Nov 14, 2007 12:22 am

Thought it was about time for our weekly US aviation industry merger discussion....

http://www.thestreet.com/_yahoo/news...cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
Some see lines, others see between the lines.
 
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etops1
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 12:42 am

it sounds more like usairways will start another merger .
 
centrair
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 12:48 am

Can some one post the profits of the legacies and a few LCCs in order of largest to smallest?

It seems that money is the big deal here and not so much fleets, routes, and hubs.

Quote:
one can either say that consolidation would benefit the industry, the shareholders and the employees, or make the argument that airline industry mergers have generally been failures -- producing headaches but little value.

I agree with the later. I think, and have said it several times, the traditional merger is not worth it anymore unless it is a big fish eating a small fish. Did AA/TWA really benefit the company? NW/Republic back in the 1980s led to BK, didn't it?

I was reading the article and thinking about NW. We all like to talk about DL/NW merger but would it be practical?

NW buys a lot of stock in other companies or makes agreements with name exclusivity
- Golden stock in CO (a very successful airline right now)
- 40% in Midwest (a popular carrier)
- 3 airline subsidiaries that can be borrowed against each other (keeps things liquid)
- 1 Travel agency that lets them bring in other revenue
- 5th freedom rights from Japan...no NW name...no rights.

I see other carriers doing this kind of diverse investing.

As I wrote before it is time for a company in the US to instead of merging carriers, create a managment group that holds multiple subsidiaries ala Swire. The traditional merger is just not economical and is rather dumb in my opinion.
There needs to be diverse companies where the long-haul is divided into high product and medium product while the domestic is one more product. Then merge ground, mech and catering into a subsidiary that can vouch for other contracts while still maintaining a core contract with the parent airlines.

Maybe TPG is looking to do this type of stuff. Anyone notice they are working with BA to buy IB and worked with NW to get 40% of Midwest?
Yes...I am not a KIX fan. Let's Japanese Aviation!
 
flydl2atl
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 12:49 am



Quoting Alitalia744 (Thread starter):
Thought it was about time for our weekly US aviation industry merger discussion...

Alitalia744,

Who do you think would make the best merger partner for Delta?
 
Evan767
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:02 am

Seems like this merge mania BS all started when Anderson stepped in.
The proper term is "on final" not "on finals" bud...
 
Airstud
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:04 am

What people are not expressing proper concern for is the fact that when a merger occurs, one airline's corporate identity goes away, which means fewer airline paint schemes plying our airways.

On these grounds, future mergers are hereby disallowed.
Pancakes are delicious.
 
centrair
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:10 am



Quoting Evan767 (Reply 4):
Seems like this merge mania BS all started when Anderson stepped in.

I think it started with Parker when US was bidding for DL. He was blabbing a lot about merger. There were a few consultants out there saying the same thing. Tilton has been saying it for a while as well. The DL/NW merger ideas have been around for longer than Anderson has been at DL. But when he took over the reigns, the news got hotter especially because he was NW's old CEO. (its the love story of the century, Man in relationship; leaves and disappears from the view, and shows up at another relationship, but everyone still thinks his heart is with the previous. Its Days of Our Lives the Aviation version.)
Yes...I am not a KIX fan. Let's Japanese Aviation!
 
SPREE34
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:11 am



Quoting Etops1 (Reply 1):
it sounds more like usairways will start another merger .

Their present labor situation would ensure failure of any merger attempt.
I don't understand everything I don't know about this.
 
USAirALB
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:17 am

I think DL should go with CO.

Think about it

Both have 767,757,737,777. CO did used to have MD80's so they probably could get pilots. It would be called CO because of the more worldwide known(CO is larger in asia) Would be largest carrier in Europe.

Hubs:EWR,ATL,IAH,CVG

2nd Hubs: JFK,CLE,SLC,GUM
E135/E140/E145/E70/E75/E90/CR2/CR7/CR9/717/732/733/734/735/73G/738/739/752/753/762/772/77W/319/320/321/333/343
 
dl767captain
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:24 am

the easy way

* UA and DL would be great partners: however UA is a big star alliance member and Delta is a big skyteam member, Neither will want to leave their alliance, and both names are very strong making the choice of what name very difficult. DL gets Asia routes, UA already does pretty well in europe but would get more routes.

* NW and CO would be easy because of the fact that NW has the golden share in CO already, NW would get great europe routes and CO would get a massive Asian structure.

*AA is kind of left out there in this combination, maybe if they were last they would just take up US airways, they are both the odd couple out and since US is so small its not a great deal
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The way i see it going.

* DL is a very strong name and needs someone with an asian route, NW fits the bill pretty well. NW gives DL asia routes and DL gives NW Europe routes. They are both in the same alliance and DL could really turn NW around. But fleet commanality is horrible and would be a nightmare to fix. If this was the combination NW would probably be forced to give up their golden share in CO (unless they do a big merge and roll in CO but i doubt they would allow that to happen) With NW being so tied to KLM and DL with a strong relationship with AF, and KLM becoming part of AF that would also help with inter-europe operations and make things even smoother.

* UA and CO, this would really be a great combination, Fleets work well, CO gets Asia and an even stronger Europe presence. CO would probably leave Skyteam and move to star. Their fleets compliment eachother except for the A320s but that is not really a big deal when almost all the other planes fit together.

* I could also see UA and US joining together but it wouldn't really make UA any stronger it would just get a little larger

* a NW and US merger would fit pretty well, both almost identical fleets and would be a smooth quick merger since US wants a merger.

AA is kind of the odd ball, i don't really know who they would go with, or if they even want to.
 
Airnerd
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:25 am



Quoting USAirALB (Reply 8):
Hubs:EWR,ATL,IAH,CVG

2nd Hubs: JFK,CLE,SLC,GUM

Fleets seem compatible, but the hubs don't seem that great. Wouldn't the best mergers be between two airlines with strong coverage and hubs in different parts of the country? Like the situation with US and America West.

With US and DL, it seems unlikely you'd keep both EWR and JFK, both CLE and CVG... Also, SLC is the only western hub. Maybe that's fine, but it's in one of the smallest O&D cities in the west... Dunno.

How about AA and Alaska?
 
iflyatldl
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:25 am



Quoting USAirALB (Reply 8):
I think DL should go with CO.

Think about it

Both have 767,757,737,777. CO did used to have MD80's so they probably could get pilots. It would be called CO because of the more worldwide known(CO is larger in asia) Would be largest carrier in Europe.

Hubs:EWR,ATL,IAH,CVG

2nd Hubs: JFK,CLE,SLC,GUM

But you would have one hell of a monoply in NYC and other carriers would cry foul so fast it would make your head spin.  Wink
Ah, Summer, Fenway Park, Boston Red Sox and Beer.....
 
AirCop
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:33 am



Quoting Airnerd (Reply 10):

How about AA and Alaska?

Hell no, see AA and AirCal and Reno, no much left of either system, besides AA has proven that it doesn't understand the west coast culture.
 
bdl2stl2pvg
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:43 am



Quoting DL767captain (Reply 9):
a NW and US merger would fit pretty well, both almost identical fleets and would be a smooth quick merger since US wants a merger.

One could say that the current US merger has been neither quick nor smooth. With the two USs out there and the corresponding issues I think that a NW/US merger would be rife with issues. NW's labor is still an issue and the AW/US workforces haven't intergrated well. This could set the stage for something that could make the AA/TW post merger issues look easy.
 
Evan767
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:48 am



Quoting USAirALB (Reply 8):
Both have 767,757,737,777. CO did used to have MD80's so they probably could get pilots. It would be called CO because of the more worldwide known(CO is larger in asia) Would be largest carrier in Europe.

Ah ah ah, let's not start a pissing match in here. Delta is a bigger carrier and serves the most destinations worldwide.

Quoting Centrair (Reply 6):
I think it started with Parker when US was bidding for DL. He was blabbing a lot about merger. There were a few consultants out there saying the same thing. Tilton has been saying it for a while as well. The DL/NW merger ideas have been around for longer than Anderson has been at DL. But when he took over the reigns, the news got hotter especially because he was NW's old CEO. (its the love story of the century, Man in relationship; leaves and disappears from the view, and shows up at another relationship, but everyone still thinks his heart is with the previous. Its Days of Our Lives the Aviation version.)

Sorry I meant specifically for Delta.
The proper term is "on final" not "on finals" bud...
 
commavia
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:48 am

If AA is smart, I think they'll stay largely out of this round of consolidation, focus on getting their own ship back to profitably rather than diverting management attention to mergers, consolidation, etc.

And who knows? They might act as a DOJ wheel-greaser for some of other mergers, should they happen. If, for example, somebody has to give up slots/gates at LGA or DCA - the only two U.S. markets I think are worth AA's maybe fighting for - than AA could come in and buy up some assets at a good price.

As for Alaska, I think (hope) that AA has finally learned their lesson about the West Coast. On paper, an AA-AS merger makes great sense: their networks are almost perfectly complimentary, and their fleets are very compatible. However, major problems persist. First, Alaska's costs are way lower than AA's. This is what killed AA with the AirCal and Reno mergers - they assumed both times, wrongly, that while the costs of the operation would come up to AA levels, the yields would also rise to AA's wider network levels because of the combination of the intra-West Coast flying with AA's global network. Never happened, and AA was left holding the bag. In addition, Alaska derives a substantial amount of revenue from codeshares with just about everybody, being the codesharing whores they are. If AA were to buy Alaska, Delta/Northwest/Continental, etc. would probably ultimately drop their codeshares, furthering hurting revenue.

If AA and Alaska were to tie-up, I think the best solution would be not a full merger, but a much closer cooperation, a la NW/CO. Perhaps this could involve AMR buying Alaska Air Group, but keeping Alaska and Horizon as separate, but wholly-owned subsidiaries on separate operating certificates. (And, at the same time, of course, also keeping their lower cost bases.) AA/MQ and AS/QX could get ATI and basically combine their networks, airport ops, marketing, scheduling, pricing, etc. The AA unions, of course, would flip sh*t over this, though. Maybe AMR could agree to a deal that Alaska/Horizon flying would stay west of the Rockies, or not expand beyond the states that they already serve, etc. But I still don't think the unions would go for it, especially now.

But I'm just rambling and thinking out loud here. (Welcome to A.net.)

Should be interesting to watch...
 
LAXdude1023
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 2:14 am



Quoting Commavia (Reply 15):
If AA is smart, I think they'll stay largely out of this round of consolidation, focus on getting their own ship back to profitably rather than diverting management attention to mergers, consolidation, etc.

Agreed.

Quoting Evan767 (Reply 4):
Seems like this merge mania BS all started when Anderson stepped in.

Its seems so. My respect for DL's management team just went down the crapper. All of the talk about being a standalone carrier was crap. DL just wanted to be in control, but they seem to mind mergeing with anybody. If DL does merge with somebody, my money is on NW. I think US and UA might make another run at it too.
It is what it is...
 
iflyatldl
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 2:32 am

Perhaps JetJack could put some light on this- at least for me. I have two neighbors who are NWA f/a's and one's an a.net member-both have a lot of tenure at NWA. They have both told me that a DL/NW merger was in the cards at some point down the line once both carriers exited BK. They say "it's not if but, when?" I'm personally not buying into that, but it's been mentioned to me on several ocassions. I'm hoping my a.net neighbor will see this thread and address it.
Ah, Summer, Fenway Park, Boston Red Sox and Beer.....
 
Boeing7E7
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 2:41 am

Ah hell, lets just consolidate everyone:

Delta, you get Continental and Midwest
US Airways, you get Northwest, jetBlue and Frontier
American, you get Alaska and Hawaiian
SkyWest gets Comair
Republic gets Mesa
Virgin gets United, Spirit and Skybus
AirTran gets Sun Country and ATA
Southwest picks up all 737-700 metal that gets parked.

In 20 years...

DL and AA Merge
US and Virgin Merge
Southwest and AirTran Merge


5 years after that we all get taken at the wallet, if not sooner.

Quoting USAirALB (Reply 8):
2nd Hubs: JFK,CLE,SLC,GUM

With JFKs congestion issues, dump it and just run the shuttles.
]

[Edited 2007-11-13 18:44:26]
 
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STT757
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 3:09 am

Of all the potential airline pairings the one that fits the best would be CO/AS. CO and AS's route networks overlap very little, AS gives CO a West Coast presence, a major hub in SEA and a near monopoly on a niche market in Alaska similar to CO's Micronesian network. CO has 25 firm and 35 options for 787s, combine that with AS's SEA hub and you have the recipe for a West Coast version of EWR albeit in a smaller market. AS also has respectable presences in PDX, SFO and LAX where opportunities to grow can be realized.

From the fleet point of view it does not get any closer than this:

AS:

737-400, 737-700, 737-800, 737-900, Q-400

CO:

737-300, 737-500, 737-700, 737-800, 737-900, 737-900ER, Q-400.

For pilot integration perhaps it could work out that AS pilots and FA's keep their seniority at West Coast bases, and CO pilots and FA's keep their seniority in CLE, EWR, IAH etc..

The positives are that it's a smaller, easier to digest merger between two similar cultures and great fleet commonality.

The negatives, no International save Mexico which CO has covered better than anyone.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
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SLCUT2777
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 4:16 am



Quoting LAXdude1023 (Reply 16):
All of the talk about being a standalone carrier was crap.

They merely wanted to avoid putting their employees in the crapper along with the rest of the HP+US mess.

Quote:
In a dig at Delta's resistance to the US Airways takeover bid, Parker said everybody would be better off had the effort succeeded. "We offered $11 billion for a company now worth $7.5 billion. People are upset about it," he said. Also, the merger has reduced industry capacity by 4%.


Parker is just venting that his bid failed and now the stock of his company is only half of what it was a year ago when this ill advised bid was launched. Kudos to Gerry Grinstein and his management team for fighting this disaster off.

Quoting LAXdude1023 (Reply 16):
DL just wanted to be in control, but they seem to mind mergeing with anybody. If DL does merge with somebody, my money is on NW

 checkmark  Would DL then have the "Golden Share" NW now has with CO? Or would NW being acquired by DL nix that?
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
 
DLPMMM
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 4:21 am



Quoting Centrair (Reply 2):
5th freedom rights from Japan...no NW name...no rights.

This statement is an often repeated urban (or aviation) myth. There is no such provision in the USA-Japan bi-lateral for NWA's rights to automatically repealed in the event of a merger.

Someone here on A.net actually posted a link to the bi-lateral as proof a few weeks ago.

I can't link the actual treaty, but here is a government paper that discusses the details.

http://hotdocs.usitc.gov/docs/pubs/i...rade_technology_review/PUB3271.pdf

There is nothing there to suggest that the NWA 5th freedom rights are abolished with any name or ownership change,
 
727forever
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 6:11 am

Here's my $.02.

Wouldn't DL want a merger that is going to compliment it's current game plan? I would.

Which airlines would compliment the plan? NW, UA, CO, AA, AS, HI, FL, B6, any others?

Would they merge with an airline outside of the SkyTeam? Complicated.

Which airlines would pose the least collateral damage? NW - great, they get Japan, but who wants their problems = not worth it. UA - great, amazing Pacific routes but the rest has been reduced to crap, not to mention the DOJ will have a few things to say about it. AA - OneWorld, I think not, again DOJ would not be happy. FL & B6 - too much anti competion with these, will be tough. AS - very expensive but would work quite well with the LAX expansion. HI - hmmm, get those 763's back plus Pacific expansion at rock bottom basement prices.

Discuss among yourselves. Could it just be talk to give the stock added value in the wake of $100/brl oil, guess we'll see soon enough.


727forever
727forever
 
commavia
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 6:22 am



Quoting 727forever (Reply 22):
Which airlines would compliment the plan? NW, UA, CO, AA, AS, HI, FL, B6, any others?

To me, at least from a network perspective, the only airline that would really compliment DL's current strategic plan is NW since, they don't really overlap anywhere. Overnight, Delta would have the most "global" of all of the major U.S. airlines - leading position in Europe, strong position to Latin America, and strong/leading position to Asia. Plus, there domestic hubs don't overlap much - CVG would probably largely close in favor of DTW, MEM would no doubt go away in favor of nearby ATL, and then you'd be left with ATL, DTW, MSP, SLC, JFK, plus big operational centers in of course places like BOS, LAX, MCO, FLL, MKE, etc.

But, as you say, the synergy pretty much stops there. Their fleets are almost 100% incompatible, and the real killer could be their different labor forces: NW's being almost entirely union and Delta's being almost entirely non-union.

Quoting 727forever (Reply 22):
AA - OneWorld, I think not, again DOJ would not be happy

Not only would the DOJ definitely nix the nation's two largest legacy carriers merging, but if Delta want's to be the acquirer, there is no way AA would work. AA would never agree voluntarily to be bought by Delta or any other airline - it would have to be either a "merger of equals" or AA acquiring, as AMR is significantly larger, and worth significantly more, than Delta.
 
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calpsafltskeds
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 7:19 am

CO/UA might make a better merger for CO than CO/DL, except maybe for employee integration.

CO/UA would not have a hub problem except maybe CLE and ORD, whereas CO/DL would have ATL/IAH with some overlap and CVG/CLE and JFK/EWR with extensive duplication.

However, CO and DL could result in the merged carrier choosing CVG or CLE, international services concentration changes via ATL and IAH and basically pulling out of problematic JFK, and concentrating on increased more and larger aircraft out of EWR. At EWR larger aircraft could replace and consolidate RJs to reduce operations. Released aircraft could allow a western hub at LAX and service could expand to Asian and South Pac.. CO has LAX history and the merger carrier could take on UA and AS up and down the coast and add service to Mexico, where CO is already big.

If JFK were pulled to concentrate on EWR, then it's possible that BOS could be added as an international hub with many flights operating with 752 aircraft.

If CO and DL merged, whiel being weak in Asia, it would dominate TATL services and put a hurt on the other merger possibilities. NW/UA would create a northern airline with northern hubs of ORD, MSP and DTW and too much Asian service and too little European service (except for AMS). Who would AA or US end up with?
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DL WIDGET HEAD
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 7:54 am

http://www.tradingmarkets.com/.site/news/Stock%20News/805300/

"With the airline industry poised for a wave of consolidation, veteran Wall Street analyst Ray Neidl said Wednesday that he expects the most probable kickoff will be Delta making a bid for Northwest."
 
UAL777UK
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 8:07 am

If UA get on the dance floor with anybody I think it will be CO, they would make a great fit IMHO. DL goes with NW, again a good fit. AA, will sit on the sidelines.
 
txkf2010
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 9:13 am

I got the solution...three way mergers!

AA/DL/CO - They all are rockin the boeing metal, completely (just get rid of the A300) 737s, 757s, 767s, 777s, MD's

UA/NW/US - All have a mixed fleet dominated by airbus (get rid of the DC-9s) A320 family, A330s, 747s, 757s, 767s, 777s

everybody happy  Smile
...Rastafari Stands Alone...
 
davescj
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 11:23 am



Quoting Centrair (Reply 2):
Golden stock in CO (a very successful airline right now)

The way I understand the NW/CO agreement, CO can't self itself w/o OK from NW, but could in fact by someone else without having to get the OK of NW (stockholder OK being a different issue, which is where NW would have great influence, obviously).

I still hope (personally) for a CO+someone (DL or NW) merger to stay SKYTEAM. That said, I think CO and UA would be long term a good match (yes, difficulty with fleet issues).

I don't think AA is looking to merge instantly. They are still dealing with TWA issues from time to time. Though I think the AA/AS wouldn't be all bad for them either.

How about US/AS? I know it sounds strange, but not completely out of the question is it? Yes, I know their merger still spawns drama, but my strengthening themselves on the westcoast (esp SEA) they could long term prep themselves for Asia, no?

Dave
Can I have a mojito on this flight?
 
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OzarkD9S
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:19 pm

All this legacy/legacy matchup speculation seems to ignore the recent events with NW/YX. NW has in a sense gotten the ball rolling by neutralizing their primary Upper Midwest competitor. Not to mention the fact that through this transaction NW has enhanced the "Heartland" strategy they were pursuing by adding the smaller MKE and MCI hubs to the NW sphere of influence.

It seems to me that the legacies would be more inclined to acquire smaller competitors in complimentary regions of the country. Would AA (for example), rather take on the absorption of US or F9, equipment issues aside? AA gets a DEN hub which would complement ORD and DFW without stepping on the toes of their primary domestic partner AS? Since this is all pure speculation anyway, with the uncertainty of fuel prices etc...buying an LCC makes more fiscal sense than ponying up billions to buy another legacy in a zero-sum game.
Next up: STL-OAK-RNO-LAS-ICT-STL
 
commavia
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:25 pm



Quoting OzarkD9S (Reply 29):
Would AA (for example), rather take on the absorption of US or F9, equipment issues aside? AA gets a DEN hub which would complement ORD and DFW without stepping on the toes of their primary domestic partner AS?

To be honest, I don't think AMR's present management is really all that enthusiastic about an all-out merger, every other airline CEO's enthusiasm on the subject notwithstanding. I just don't think AA wants to deal with the hassle. And make no mistake - that is definitely what it would be: a hassle. There are not really any "easy" tie-ups: every one of them being discussed here comes with a new set of major challenges and potential pitfalls.

Now, if AA were able to pick some key valuable assets from the bones of a dead or merged competitor (say, a hub here or there, slots or gates at LaGuardia/Reagan, etc.) then I think they might be receptive to that.

But all-out merger? I don't see it. I suppose only time will tell, though.
 
richierich
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:54 pm



Quoting TXKF2010 (Reply 27):
I got the solution...three way mergers!

AA/DL/CO - They all are rockin the boeing metal, completely (just get rid of the A300) 737s, 757s, 767s, 777s, MD's

UA/NW/US - All have a mixed fleet dominated by airbus (get rid of the DC-9s) A320 family, A330s, 747s, 757s, 767s, 777s

everybody happy

That's funny - and I know you are half kidding. What a lot of people fail to realize in here is that fleet alone is not a barrier for a merger. The routes, hubs and network far outweighs the equipment being flown. Yes it helps when there is compatibility but it is only one minor factor. An airline can merge with another and fly two different fleet types, perhaps with the long-term view of getting rid of one or the other.
None shall pass!!!!
 
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OzarkD9S
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 1:55 pm



Quoting Commavia (Reply 30):


To be honest, I don't think AMR's present management is really all that enthusiastic about an all-out merger, every other airline CEO's enthusiasm on the subject notwithstanding. I just don't think AA wants to deal with the hassle. And make no mistake - that is definitely what it would be: a hassle. There are not really any "easy" tie-ups: every one of them being discussed here comes with a new set of major challenges and potential pitfalls.

Now, if AA were able to pick some key valuable assets from the bones of a dead or merged competitor (say, a hub here or there, slots or gates at LaGuardia/Reagan, etc.) then I think they might be receptive to that.

But all-out merger? I don't see it. I suppose only time will tell, though.

As stated, just an example.

The legacies can handle competing with each other, I was offering the scenario where they knock out some of the domestic pressure the LCC's and smaller players are giving them. At the end of the day, I think UA would rather have AA ensconced at Concourse A in DEN than F9. Again, this is just an example.
Next up: STL-OAK-RNO-LAS-ICT-STL
 
FlyPNS1
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 2:06 pm



Quoting Commavia (Reply 30):
.Now, if AA were able to pick some key valuable assets from the bones of a dead or merged competitor (say, a hub here or there, slots or gates at LaGuardia/Reagan, etc.) then I think they might be receptive to that.

But all-out merger? I don't see it. I suppose only time will tell, though.

I tend to agree with you. I think AA management is willing to pass on the merger mania and just use their cash to pick up some pieces here and there. Given AA's size and network, there's not as much of an impetus to merge. They've got five strong hubs/gateways (ORD, DFW, MIA, JFK, LAX). Even things like Asian routes won't be so hard to come by if other carriers merge. For example, if NW and DL merge and UA and CO merge, AA will be in the drivers seat for future China slot awards since the combined carriers would already be holding such a large number of slots.

Now from a more pessimistic viewpoint, AA is also a less desirable candidate to merge with. AA's debt load is high, they have a larger fleet replacement issue than any other carrier, plus they have higher labor costs which show no signs of declining. Without using the bankruptcy system to clean some of these issues up, AA is not exactly the prettiest girl at the party.
 
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STT757
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 2:08 pm



Quoting SLCUT2777 (Reply 20):
Would DL then have the "Golden Share" NW now has with CO? Or would NW being acquired by DL nix that?

Golden share goes away if NWA merges with anyone, or outsiders buyout NWA. The Golden Share is non transferable.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
gsosbee
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 2:58 pm



Quoting DL767captain (Reply 9):
They are both in the same alliance and DL could really turn NW around. But fleet commonality is horrible and would be a nightmare to fix.

Fleet commonality for a large carrier is a non-barrier to combination. In fact it creates competition between the aircraft makers. The acquired fleet would come with spares and crews so revenue will be generated while the issue settles out over a long period of time.

Quoting LAXdude1023 (Reply 16):
All of the talk about being a standalone carrier was crap. DL just wanted to be in control, but they seem to mind merging with anybody.

Delta is doing what they said they would do. The system is broke and everyone knows it. All Delta is saying is that they want to be a survivor after the next shake-out.
 
ThePinnacleKid
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 3:02 pm



Quoting FlyPNS1 (Reply 33):
Without using the bankruptcy system to clean some of these issues up, AA is not exactly the prettiest girl at the party.

but one of the most respected... even with current issues... one has to admire a company that pulled off the huge downturn without doing the BK dance... and now can show profits....
"Sonny, did we land? or were we shot down?"
 
Alitalia744
Topic Author
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 3:13 pm

All this talk about DL management turning their heads on the notion of consolidation and now talking out of both sides of their mouth...

DL never said they were against consolidation, or a merger. They said they were against that particular merger, or a merger that doesn't make sense.

It was clear than and is clear now that if consolidation happens, Delta wants to be in charge, an acquirer, keeping the Delta name...

Fleet issues are not as big a deal as people make them out to be especially when you consider the size of the fleet that is coming in.

Couple with DL TechOps is now certified to service CFM56-5s - the CFMs hanging on many A320s.
Some see lines, others see between the lines.
 
NW7E7
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 3:18 pm



Quoting Airstud (Reply 5):
What people are not expressing proper concern for is the fact that when a merger occurs, one airline's corporate identity goes away, which means fewer airline paint schemes plying our airways.

...and this is why we have delta, seeing as they change c/s every couple of years...  biggrin 
 
mspdl
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 3:30 pm

I would put money on a DL/NW merger or some kind of consolidation.

I think we are going to see some of the biggest changes in more than 10 years.

People look at the signs on the road..

There are too many coincidences.. for example..

Richard Anderson former CEO of NWA, by the way the man is constantly in and out of MSP. Ed Bastian has passed thru. Why would DL want a former CEO of NWA?

Same court for bankruptcy? Why the same court?

Both in Skyteam, which makes a smoother transition for Skymiles and Worldperk members.

The questions I do have are these:

What do you do about the different kinds of aircraft? Airbus and Boeing? Does it really matter though? The airlines are salivating for $$$... sell them off? What do you do about the hubs or focus cities of DL/NW. Keep who, git rid of who?
Its all about the money.. who gets the most.

It will be very interesting to see what our airline industry looks like in the next 5 years!
 
avek00
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 3:58 pm



Quoting ThePinnacleKid (Reply 36):
but one of the most respected... even with current issues... one has to admire a company that pulled off the huge downturn without doing the BK dance... and now can show profits....

AA already did the merger dance back in 2001, and it nearly brought the airline to the brink of bankruptcy despite the relatively low purchase price for TWA (only $640M or so to acquire, but over $1.5 BILLION spent by AA to integrate TWA, which was effectively lost once 9/11 came and TWA's entire operation became effectively worthless in any context). The next merger AA attempted would probably finish the job of getting the airline into Cahpter 11 within 18-24 months fo consummation.
Live life to the fullest.
 
avek00
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 4:03 pm



Quoting DL767captain (Reply 9):
DL gets Asia routes, UA already does pretty well in europe but would get more routes.

...but at the end of the day, this would mean little. How does a bunch of TPACs ex-SFO or ex-ORD actually help the Delta brand, whose strength is largely east of the Mississippi? Similarly, United's bread-and-butter could care less about nonstops to Europe via ATL or CVG -- they want nonstop flights from LAX/SFO/ORD/IAD to Europe.

I challenge a.netters to go beyond the Wall Street hoopla and hype and look closely at what a merger scenario would really bring to the airlines invovled. If you really want to know why legacies haven't been merging, you'll find the answer there.
Live life to the fullest.
 
jfk787nyc
Posts: 478
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 4:45 pm

What is wrong with a
CO/NW real merger? I do not understand why no one has said this before.

Fleet will not be such a problem as both carriers will start recieving 787s in 2008-2009.

CO/NW will have a fleet together of 43 787s and an extra 50 options sitting on order.

They would have
96 757-200ER
33- 757-300
16- 747-400
20- 777-200ER
16- 767-400
10- 767-200
32- Airbus A330 Northwest will obviously sell off these planes when 787s come on line.

208- 737s 900er, 900, 800, 700 series, retire remaining Continental 737s- 300 and 500 which is already starting

137- Airbus a319,a320 Northwest can figure out what to do with these

Northwest can retire all DC9s

CO/NW would need to place orders eventually for 25-30 Boeing 777

At the same time Delta merges with Jetblue & Alaska and gets JFK and West Coast and Skyteam emerges the most powerful alliance in the world.
 
UAL777UK
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 4:49 pm

A hedge fund has come out today and wants to push for a DL/UA Merger!

http://online.wsj.com/article/SB1195...6992875.html?mod=yahoo_hs&ru=yahoo
 
avek00
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Joined: Mon Oct 25, 2004 5:56 am

RE: Delta May Start Merger Mania

Wed Nov 14, 2007 4:56 pm



Quoting JFK787NYC (Reply 42):
What is wrong with a
CO/NW real merger?

The fact that the carriers receive substantially all the benefit of a potential merger within their existing alliance relationship, with virtually none of the hassles and burdens associated with a merger.
Live life to the fullest.
 
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CV880
Posts: 936
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 5:09 pm



Quoting UAL777UK (Reply 43):
A hedge fund has come out today and wants to push for a DL/UA Merger!


DL+UA=PA
 
flydl2atl
Posts: 115
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 5:27 pm

All the rumors on this board plus what you read about in the news makes me believe that a DL + UA combination is almost inevitable. So is the name going to be Delta-United?
 
EXAAUADL
Posts: 1740
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 5:30 pm

Again:

This is about making a few people rich at the expense of employees, passengers and airports. THERE DOESNT NEED TO BE ANY MERGERS..they never work!!!!
 
DiscoverCSG
Posts: 517
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 5:31 pm



Quoting MSPDL (Reply 39):
Same court for bankruptcy? Why the same court?

...and don't forget they filed on the same day.
 
ScottB
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RE: Delta May Start Merger Mania

Wed Nov 14, 2007 5:32 pm



Quoting SLCUT2777 (Reply 20):
Quote:
In a dig at Delta's resistance to the US Airways takeover bid, Parker said everybody would be better off had the effort succeeded. "We offered $11 billion for a company now worth $7.5 billion. People are upset about it," he said. Also, the merger has reduced industry capacity by 4%.

Parker is just venting that his bid failed and now the stock of his company is only half of what it was a year ago when this ill advised bid was launched.

Not only that, but he's made a dishonest comparison between the value of the US Airways offer for Delta in January with Delta's worth today. If one were to value the improved US Airways offer for Delta made in January ($5.0 billion in cash plus 89.5 million US Airways shares) with the current share price for LCC ($22.78), you get $7.04 billion -- far less than the $11 billion he claims.

Quoting Etops1 (Reply 1):
it sounds more like usairways will start another merger .

US Airways needs to fix its own operation and finish America Westing the operation before they merge with anyone else. Can you imagine what a cluster**** ATL would have been with the botched reservations system migration they did?