Ezra
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DL Response To AA/US Merger?

Thu Feb 14, 2013 5:00 pm

Now that AA & US are off to see the priest, what type of competitive response might we expect to see from DL? It occurs to me that they might be hungry again now that they've finished digesting NW. Relative to other recent players in the M&A game -- UA/CO, WN/FL, and now AA/US -- Delta is pretty far out along the curve and might be in a position to absorb another large deal. What, if anything, could they be cooking up? Could they try to play spoiler to the AA/US deal and try to snatch up Miami? Maybe B6 would make for a tasty snack? And of course there are always rumors about HA and AS. Does anyone care to opine?
 
phxa340
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 5:14 pm

If anything this merger helps DL- it's one less competitor they need to compete with on price. I think DL is right sized and has a highly effective fleet, network, and employee group. I don't see DL really affected by this merger, ditto for UA besides some right sizing routes to former US hubs
 
PIEAvantiP180
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 5:27 pm

Quoting ezra (Thread starter):
Could they try to play spoiler to the AA/US deal and try to snatch up Miami?

This is a merger not an asset sale, MIA is not under any circumstances for sale. The new AA would be idiots for even entertaining an idea like that. MIA is the Latin king and making AA money, there is no way they will get rid of it. AS for DL looking to merge with another carrier, its certainly a possibility. B6 would not work because they would have to give up to much in LGA/JFK slots to make the merger or a buy out pass the DOJ/DOT approval.
 
MaverickM11
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 5:37 pm

Quoting phxa340 (Reply 1):
If anything this merger helps DL- it's one less competitor they need to compete with on price

   On the other hand, DL is now #3. They have become the new US: lots of hubs in the East, one hub in the West that doesn't really serve as a gateway to much of anything, a great operation, improving product and customer service metrics, but ultimately a challenging network. I think we'll see DL try to make headway in NYC, LAX, and SEA, to grow a network that is competitive with the new AA and UA.
E pur si muove -Galileo
 
stlgph
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 5:41 pm

If Delta has a 'concern' right now, of any other carrier, it is United. United has the best network among the airlines and is two years ahead of AMR/LCC in the merger integration process.
American doesn't even come close to United or Delta's presence in the Pacific Market.
Internally, Delta needs to teeth through their refinery operation, the investment in Virgin Atlantic, and its self-investment in New York LaGuardia and Kennedy.
if assumptions could fly, airliners.net would be the world's busiest airport
 
commavia
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 5:49 pm

Quoting MaverickM11 (Reply 3):
On the other hand, DL is now #3.

True, but all three are absolutely huge airlines. I think when you're talking about carriers that each have between 1/6 and 1/5 of the entire market, it becomes relatively less important who is in which specific position.

The key shift in competitive dynamics for Delta - and United - is that now they will have another competitor with not just the scale they have, but more importantly the network range. AA will - for the most part - be able to offer a comprehensive network across multiple, very-well-placed hubs, on par with Delta and United.

Quoting MaverickM11 (Reply 3):
They have become the new US

I wouldn't go that far. Delta today is in a far, far better position than standalone USAirways.

Quoting MaverickM11 (Reply 3):
lots of hubs in the East, one hub in the West that doesn't really serve as a gateway to much of anything

To be fair, that's essentially AA, too.

I think on balance AA's network will now be stronger than Delta's, but not by much. AA will have the entire domestic market covered except the west coast and Rockies region, with extremely dense coverage up and down the east coast, two excellent east-west hubs in DFW and ORD, plus LAX as a prime longhaul/partner gateway out west.

Domestically, the only area where Delta will still have a clear advantage vs AA will be in the Rockies, but of every region of the U.S., that's the least important - it's the least populous and least dense. Internationally, Delta will have an advantage to Asia, although I suspect the gap there between the two will be narrowing in coming years.

Quoting MaverickM11 (Reply 3):
a great operation, improving product and customer service metrics

  

Quoting MaverickM11 (Reply 3):
I think we'll see DL try to make headway in NYC, LAX, and SEA, to grow a network that is competitive with the new AA and UA.

I agree - those will likely be the 3 main battle fronts they attempt to fight on. We'll see if their competitors choose to fight on Delta's terms or take the fight to Delta on terms of their own.
 
slcdeltarumd11
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 5:51 pm

Its good for Delta and United in the end. One less competator. Especially since US was always the one lowest last minute fares one less person to price match it will be a good thing for Delta in the end. Why does everyone keep bringing up MIA delta is not starting a hub there nor is AA/US going to leave or sell it.
 
jfk777
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 5:51 pm

Delta has a decent Pacific franchise, with AA deal happening every one is saying how " AA lacks in Asia", True, But DL is not so strong to Europe as we are led to believe, sure they fly every where but is flying to Rome, Barcelona and Athens something to brag about. We all know AA is LHR centric to Europe but why is this a hanicap ? About 40 % of all USA to Europe trips go to the UK and 98 % of those go to LHR, which is why DL purchased 49 % of Virgin. DL has a decent operation to Latin America from Atlanta and JFK to Sao Paulo (hey its JFK where they have a huge operation if they can fly 20 767 to Europe daily they can do the LHR of South America too) but its not Miami and never will be.

IN Asia DL has the Tokyo hub, but the NRT hub is not what it used to be. 777 can go to all kinds of places in Japan, China, Hong Kong and Korea as AA is doing or soon will be nonstop from ORD, LAX, JFK and DFW. Even Delta overflies Japan with its own 777 from Detroit.
 
anstar
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:13 pm

Quoting ezra (Thread starter):
Now that AA & US are off to see the priest, what type of competitive response might we expect to see from DL?

Perhaps buying VX to be their LCC? They seem to be getting cosy with Virgin Atlantic (buying 49% and foing a JV between UK and USA, Canada, Mexico).... as well as the Joint Venture with Virgin Australia?

Perhaps we could see Delta push all the Virgin;s into Skyteam??
 
rwy04lga
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:20 pm

Quoting jfk777 (Reply 7):
is flying to Rome, Barcelona and Athens something to brag about.

If other airlines had the network in Europe that Delta has, you'd bet your jet-A they'd brag about it. Delta is strong in EU, SA)">NA, SA, AS, and has presence in AF and AU. Six continents! Not too shabby for 'Number 3'!!

Since I was 15, I always wanted DL and NW to merge. They waited 35 years until I was hired by Delta to do that. Then I hoped we'd get LGA terminal C. Next on the list was getting VS. All have come to pass.

Now my sights are set on AS. SEA, here we come!!
Just accept that some days, you're the pigeon, and other days the statue
 
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TVNWZ
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:20 pm

If I were Delta I would go after Alaska. Firm up the west coast. If Delta doesn't someone else will. Consolidation is not over with Alaska still out there alone.
 
phxa340
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:24 pm

Quoting TVNWZ (Reply 10):

True and all the folks that defend AS independence to the end, if DL offers the shareholders a fantastic offer - you better believe that AS will be bought out or merge.

I don't believe that this will happen though ... I see AS staying independent for quite some time.
 
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1337Delta764
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:26 pm

I was thinking if Doug Parker decides on getting rid of IFE on AA domestic flights, perhaps DL would counter it by retrofitting more of its domestic aircraft with AVOD in effort to win loyal AA customers who enjoy having IFE on domestic flights.
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toltommy
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:26 pm

Quoting stlgph (Reply 4):
If Delta has a 'concern' right now, of any other carrier, it is United. United has the best network among the airlines and is two years ahead of AMR/LCC in the merger integration process.

Problem is that UA is 10 years behind DL in the merger integration process.    AA/US has those two mergers to learn from, one done very well, one not so much.
 
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TVNWZ
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:27 pm

Quoting phxa340 (Reply 11):
I don't believe that this will happen though ... I see AS staying independent for quite some time.

I agree with the first part. Love flying the airline. However, the market makeup may force the issue. I am not saying I want it to happen, I am saying Delta has to be thinking about it.
 
DualQual
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:30 pm

Quoting toltommy (Reply 13):

10 years might be optimistic. AA/US could very well be integrated ahead. I say that with my tounge not really all in my cheek.
There's no known cure for stupid
 
MaverickM11
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:33 pm

Quoting commavia (Reply 5):
To be fair, that's essentially AA, too.

I think on balance AA's network will now be stronger than Delta's, but not by much

I think they're significantly stronger or at least have the potential to become so quickly; they're now a major player in NYC, WAS, CHI, LAX--DL is making a hard push to be a major player in two of those areas. AA can run tpac flights out of LAX/DFW/ORD for instance. DL essentially has DTW; it has had difficulty doing much out of ATL and SLC is a nonstarter. I'm not convinced by SEA either as it relies in large part on a partner over whose schedule it has no control and with whom it seems to be having a schedule tit-for-tat lately.

Quoting commavia (Reply 5):
I wouldn't go that far. Delta today is in a far, far better position than standalone USAirways.

I mean it in the sense that DL probably has the most challenging network of the three now, though it has one of the strongest management teams, after US  DL has been making a lot of excellent moves, but so was US.

Quoting TVNWZ (Reply 10):
Consolidation is not over with Alaska still out there alone.

With every merger AS seems to print more money, so I don't know that AS really needs to get involved, especially if it continues to play AA and DL off of each other.
E pur si muove -Galileo
 
lucky777
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:33 pm

Quoting MaverickM11 (Reply 3):
On the other hand, DL is now #3. They have become the new US

Laughable at best to make such a statement. Delta has a far more robust overall network than even the new AA has and certainly superior to anything US Airways or American offered on their own accord.
 
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enilria
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:37 pm

I think there is a 66% chance we will see this filed in court when others can submit reorganization plans:

"The analysis of the bid shows that US Airways is effectively paying $xyz million for American. We (Delta) are willing to pay $1 more than that for ONLY the Miami hub and if US Airways pays anything for the rest, then the creditors will get a higher % of their claims returned to them. We have included an analysis from our consultant showing our proposed asset sale coupled with the remainder being sold to US Airways should increase the claim resolution percentage from x% to y%."

Frankly, they'd be stupid not to do that...
 
realsim
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:39 pm

Quoting MaverickM11 (Reply 3):
I think we'll see DL try to make headway in NYC, LAX, and SEA, to grow a network that is competitive with the new AA and UA.

  

AA should better keep an eye on what DL is doing at LAX . I know AA is the number 1 mainline airline at LAX, but DL has now more flights from LAX to cities like SAN, SFO or LAS, and they are starting new routes, so they could end with something like what they have at LGA or JFK if AA stays idle. Who would have thought that DL would run mutilple daily LGA-ORD/DFW or LAX-SFO some years ago?

AA+US largest MSAs without non-stop service from LAX are ATL, DTW, SEA (AS), MSP and TPA, all of which are served by DL. I think it's time to enter those. Besides, the largets MSAs served by AA+US from ALL their hubs except LAX are DTW, TPA, BWI, PIT, CMH and IND. PIT and CMH, because of the large AA+US presence there, seem logical additions in my opinion.

[Edited 2013-02-14 10:41:32]
 
commavia
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:40 pm

Quoting lucky777 (Reply 17):
Delta has a far more robust overall network than even the new AA has

That's highly debatable.

Each is absent from 2 main regions of the U.S. (intra-west coast and Rockies for AA, intra-west coast and south-central for DL), but on balance I'd rather be missing the Rockies (least populous and lowest-density region of the mainland U.S.) than south-central.

Internationally, the two are now essentially tied across the Atlantic, while AA will handily dominate Latin America and Delta is huge to Asia (though with lower overall market share than AA has in Latin America).
 
diverdave
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:45 pm

Quoting phxa340 (Reply 1):
If anything this merger helps DL- it's one less competitor they need to compete with on price. I think DL is right sized and has a highly effective fleet, network, and employee group.

Delta is ecstatic.

As you note, it is one less competitor.

The new AA will have higher wage costs than the old US (as those employees are brought up to AA wage levels), and will have higher wage costs than if AA had emerged from bankruptcy stand-alone. (Thanks to the deals Parker cut with the unions.)

Richard Anderson's three largest US based competitors are all at various points in the process of difficult mergers, and yes I'm counting WN as one of the three.

His only dark cloud is that he must rue the day he bought the Trainer refinery.  

David
 
wingnutmn
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:45 pm

Quoting jfk777 (Reply 7):

This is where your global alliance comes in and even further, your ATI with other carriers. DL has AF/KL across the Atlantic, with hubs in CDG and AMS you can go anywhere in Europe with 1 or 2 stops with 1 ticket. LHR was lacking so you buy into LHR with VS and now you have your Europe covered. Likewise Trans-pac has NRT, but it also has KE in ICN as a huge asset to the North Pacific rim and Indonesia.

AA may not have a huge Asia route, but OW has JAL that covers the entire North Pacific, and Qantas for all of the South Pacific. Where AA lacks is the Middle East. DL and UA fly there, but AA is very absent. You would need to go through LHR and connect on BA if you want that.

World domination for US airlines belongs to UA followed by DL, then AA.

Wingnut
Any landing you can walk away from is a good landing! It's a bonus if you can fly the plane again!!
 
PSU.DTW.SCE
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:45 pm

Quoting realsim (Reply 19):
AA+US largest MSAs without non-stop service from LAX are ATL, DTW, SEA (AS), MSP and TPA, all of which are served by DL. I think it's time to enter those. Besides, the largets MSAs served by AA+US from ALL their hubs except LAX are DTW, TPA, BWI, PIT, CMH and IND. PIT and CMH, because of the large AA+US presence there, seem logical additions in my opinion.

However, LAX is a true omni-directional hub, and there is signficant competition to/from LAX into those markets both nonstop and connecting service.

The routes are long mid-con type routes (MSP, DTW, ATL, TPA, PIT, CMH) that all eat up a lot of airplane time.
I wouldn't look too quickly for AA to jump on the routes. Plus, you know the minute they do then DL starts LAX-DFW, LAX-ORD
 
Bobloblaw
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:50 pm

Quoting ezra (Thread starter):
what type of competitive response might we expect to see from DL?

THERE IS NOTHING DELTA CAN DO TO STOP AA/US or Blunit it.

Quoting ezra (Thread starter):
What, if anything, could they be cooking up? Could they try to play spoiler to the AA/US deal and try to snatch up Miami?

NO, OF COURSE NOT!!!!!!!

Quoting TVNWZ (Reply 10):
If I were Delta I would go after Alaska.

A hostile takeover???? AS doesnt want to be sold.

Quoting 1337Delta764 (Reply 12):
I was thinking if Doug Parker decides on getting rid of IFE on AA domestic flights,

For the love of GOD!!!!!!!!!

Quoting realsim (Reply 19):
AA should better keep an eye on what DL is doing at LAX

DL is losing money at LAX is what Delta is doing.


SHOOT ME!!!!!! 
 
BoeingGuy
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:52 pm

Quoting TVNWZ (Reply 10):
If I were Delta I would go after Alaska. Firm up the west coast. If Delta doesn't someone else will. Consolidation is not over with Alaska still out there alone.

Yep, just what DL wants - all those small state of Alaska destinations; routes like BLI-OGG, SJC-LIH and QX.

Both AA and DL get a lot milk from AS now with the code-sharing, but without having the hassle of buying the cow.

Quoting phxa340 (Reply 11):
True and all the folks that defend AS independence to the end, if DL offers the shareholders a fantastic offer - you better believe that AS will be bought out or merge.

It depends on whether the shareholders figure that rejecting a DL offer would be more fantastic for them in the long-term.

I still believe that anyone who doesn't think most of AS's (profitable) route structure would be gone so fast it would make your head spin if DL bought them, is in denial. First DL would can all the niche routes; then they realize they don't need all those non-stops when they can start routing people through SLC and MSP, and of course DL doesn't really want to fly to Adak, Kotzibue and Wrangell either.
 
rwy04lga
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 6:56 pm

Quoting realsim (Reply 19):
AA should better keep an eye on what DL is doing at LAX . I know AA is the number 1 mainline airline at LAX, but DL has now more flights from LAX to cities like SAN, SFO or LAS, and they are starting new routes

This thread DL To Start LAX-ANC/BOS/GEG (by FL787 Feb 13 2013 in Civil Aviation) speaks of Delta doing just that.
Just accept that some days, you're the pigeon, and other days the statue
 
RyanairGuru
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:02 pm

Quoting 1337Delta764 (Reply 12):
I was thinking if Doug Parker decides on getting rid of IFE on AA domestic flights

Not happening. Parker regrets taking IFE of US planes, he learned a lot about running an East Coast business airline and doesn't plan on making the same mistakes again

Quoting bobloblaw (Reply 24):
DL is losing money at LAX is what Delta is doing.

They are also losing money at LGA, but I don't expect them to vacate that market either  
Worked Hard, Flew Right
 
rwy04lga
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:06 pm

Quoting BoeingGuy (Reply 25):
all those small state of Alaska destinations; routes like BLI-OGG, SJC-LIH and QX.
Quoting BoeingGuy (Reply 25):
DL doesn't really want to fly to Adak, Kotzibue and Wrangell either.

DL could keep the SEA hub and some 737s, let QX fly the intra-AK and ex-SEA flights and let them keep the AS name. All Delta really wants is the SEA hub. All of this, is of course, MVHO. Don't ask for a link or a source.
Just accept that some days, you're the pigeon, and other days the statue
 
Bobloblaw
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:06 pm

Quoting RyanairGuru (Reply 27):
They are also losing money at LGA, but I don't expect them to vacate that market either

At some point you cant lose money at both.
 
rwy04lga
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:07 pm

Quoting RyanairGuru (Reply 27):
They are also losing money at LGA, but I don't expect them to vacate that market either

Eh cue me? Please enlighten me.
Just accept that some days, you're the pigeon, and other days the statue
 
DTWPurserBoy
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:12 pm

I just wonder how fractuous this merger will be. It took US and HP YEARS to integrate and AA is well known for its intractable unions. Unless handled carefully, this could be a real mess. Settle the seniority issues IMMEDIATELY and work from there. That is the biggest stubmbling point in any merger.

Since I have many friends at both companies I wish them all well. Keep your cool, ignore rumors and deal realsitically.
Qualified on Concorde/B707/B720/B727/B737/B747/B757/B767/B777/DC-8/DC-9/DC-10/A319/A320/A330/MD-88-90
 
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1337Delta764
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:18 pm

Quoting RyanairGuru (Reply 27):
Not happening. Parker regrets taking IFE of US planes, he learned a lot about running an East Coast business airline and doesn't plan on making the same mistakes again

Are you sure about this? I find this hard to believe, since even on IFE-equipped aircraft, US doesn't use the IFE systems on any domestic route other than Alaska and Hawaii; I had an A330 on CLT-SJU and a Hawaii-equipped 752 on CLT-PHX this past holiday season, and the only things the IFE systems were used for were the safety video, and in the case of the A330, the moving map on the supplemental monitors. If Doug Parker really regrets removing IFE on domestic routes, he would allow the use of the systems on the IFE-equipped aircraft.

Considering Doug Parker's arrogance against customers, I think it is indeed possible, if not immediately likely, that he will order the IFE systems to be removed from all of AA's domestic aircraft.

[Edited 2013-02-14 11:20:15]
The Pink Delta 767-400ER - The most beautiful aircraft in the sky
 
luv2fly
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:23 pm

Is US and HP finally combined or is it still East and West? Remember it still has to pass the DOT and there is a 50/50 chance that it could not pass mustard. ATT and T-Mobile got shot down, this could very well happen as well.
You can cut the irony with a knife
 
cessna2
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:25 pm

Quoting DTWPurserBoy (Reply 31):
I just wonder how fractuous this merger will be. It took US and HP YEARS to integrate and AA is well known for its intractable unions. Unless handled carefully, this could be a real mess. Settle the seniority issues IMMEDIATELY and work from there. That is the biggest stubmbling point in any merger.

Since I have many friends at both companies I wish them all well. Keep your cool, ignore rumors and deal realsitically.

It will still take years. US and HP are still not fully integrated. Now you'll have multiple unions to integrate. This could take a while.
 
BoeingGuy
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:28 pm

Quoting rwy04lga (Reply 28):
DL could keep the SEA hub and some 737s, let QX fly the intra-AK and ex-SEA flights and let them keep the AS name. All Delta really wants is the SEA hub. All of this, is of course, MVHO. Don't ask for a link or a source.

Oh yeah, I'm sure that would benefit the AS shareholders - pare out the most major parts of the AS network to DL and keep the leftovers under AS.
 
HPRamper
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:28 pm

Quoting TVNWZ (Reply 14):
I agree with the first part. Love flying the airline. However, the market makeup may force the issue. I am not saying I want it to happen, I am saying Delta has to be thinking about it.
Quoting MaverickM11 (Reply 16):
With every merger AS seems to print more money, so I don't know that AS really needs to get involved, especially if it continues to play AA and DL off of each other.

AS has so much more leverage right now than DL does. The only way DL could force a buyout is if they were somehow able to come to a backroom agreement with AA to cut off all codesharing with AS, giving AS the option to either accept buyout or wither on the vine. AA would never go along with that, so DL's hands are tied. And now with US tying up with AA, that is even more network feed to funnel into the AS network via the AA codeshare.

Quoting wingnutmn (Reply 22):
Where AA lacks is the Middle East. DL and UA fly there, but AA is very absent. You would need to go through LHR and connect on BA if you want that.

World domination for US airlines belongs to UA followed by DL, then AA.

Is it in the cards for AA to start up something like JFK- or PHL-DXB? Maybe even jump back into CAI?

Quoting 1337Delta764 (Reply 32):
Considering Doug Parker's arrogance against customers, I think it is indeed possible, if not immediately likely, that he will order the IFE systems to be removed from all of AA's domestic aircraft.

From all I've been reading and seeing, more and more passengers are choosing to bring their own devices rather than rely on aircraft IFE. A better option might just be to install power outlets in every seat and offer the free headphones.
 
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1337Delta764
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:33 pm

Quoting HPRamper (Reply 36):
From all I've been reading and seeing, more and more passengers are choosing to bring their own devices rather than rely on aircraft IFE. A better option might just be to install power outlets in every seat and offer the free headphones.

On DL, based on my experience, more people still use the AVOD systems than using their own devices. While it is true that some people now use their own devices, they are still a minority when it comes to AVOD-equipped aircraft.
The Pink Delta 767-400ER - The most beautiful aircraft in the sky
 
delimit
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:36 pm

I haven't sen it mentioned, but DL can't be sad to watch the rationalization that will happen between CLT and the AA network. Not only is DL losing a competitor, but they are.going to become stronger in the SE as a result.
 
BoeingGuy
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:37 pm

Quoting HPRamper (Reply 36):
The only way DL could force a buyout is if they were somehow able to come to a backroom agreement with AA to cut off all codesharing with AS, giving AS the option to either accept buyout or wither on the vine. AA would never go along with that, so DL's hands are tied.

That would also be illegal collusion AFAIK. One competitor making a secret backroom agreement with another competitor to force a third one to sell out or wither on the vine doesn't sound legal, even for this legal non-expert.

I do agree that AS has more leverage.
 
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United787
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:38 pm

Quoting toltommy (Reply 13):
Problem is that UA is 10 years behind DL in the merger integration process. AA/US has those two mergers to learn from, one done very well, one not so much.

They could also learn from their own past mergers AA/TW and US/HP, not done so well...

Quoting DTWPurserBoy (Reply 31):
I just wonder how fractuous this merger will be. It took US and HP YEARS to integrate and AA is well known for its intractable unions. Unless handled carefully, this could be a real mess. Settle the seniority issues IMMEDIATELY and work from there. That is the biggest stubmbling point in any merger.
Quoting cessna2 (Reply 34):
It will still take years. US and HP are still not fully integrated. Now you'll have multiple unions to integrate. This could take a while.

No doubt that the DL/NW merger is a model for all and that UA/CO hasn't been so smooth...but UA is over the hump and this should be a much better year (if they can only get their 787s flying)...even the unions are making progress...
 
wingnutmn
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:44 pm

Quoting rwy04lga (Reply 28):
DL could keep the SEA hub and some 737s, let QX fly the intra-AK and ex-SEA flights and let them keep the AS name. All Delta really wants is the SEA hub. All of this, is of course, MVHO. Don't ask for a link or a source.

They also want LAX. They could increase capacity significantly to Asia with AS feed to LAX. Also, it would take away a codeshare with AA

Quoting DTWPurserBoy (Reply 31):

I just wonder how fractuous this merger will be. It took US and HP YEARS to integrate and AA is well known for its intractable unions. Unless handled carefully, this could be a real mess. Settle the seniority issues IMMEDIATELY and work from there. That is the biggest stubmbling point in any merger.

I think that if AA pilots feel they can gain something, this deal would get done quickly. If it is just to get US up to AA standards for pay, then I see it taking a while. The only gain for AA in the last scenario is Union Dues paid to APA. Doug Parker is best to keep them fractured, because the pilots at US are an absolute bargain right now at their current pay.

Wingut
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TVNWZ
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:45 pm

Quoting MaverickM11 (Reply 16):
With every merger AS seems to print more money, so I don't know that AS really needs to get involved, especially if it continues to play AA and DL off of each other.

AS doesn't need to get involved. But, DL may get involved to protect itself.

Quoting diverdave (Reply 21):
Delta is ecstatic.

As you note, it is one less competitor.

It is not the number of competitors, it is the strength and reach of the competitors. A combined AA/US could be a bigger headache than the two seperately.

Quoting diverdave (Reply 21):
His only dark cloud is that he must rue the day he bought the Trainer refinery.

Or the other airlines will have wished they bought a refinery. Too early to tell, though.

Quoting bobloblaw (Reply 24):
A hostile takeover???? AS doesnt want to be sold.

And AA wanted to come out of bankruptcy without merger. Can't always get what you want. Times, and competition, always change.

Quoting BoeingGuy (Reply 25):
Yep, just what DL wants - all those small state of Alaska destinations; routes like BLI-OGG, SJC-LIH and QX.

Both AA and DL get a lot milk from AS now with the code-sharing, but without having the hassle of buying the cow.

Maybe they could get more milk by owning the cow. But, more factually, keep AA from milking the cow.

I believe AS is a logical target. It's one of the biggest out there.
 
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:49 pm

Quoting HPRamper (Reply 36):

From all I've been reading and seeing, more and more passengers are choosing to bring their own devices rather than rely on aircraft IFE. A better option might just be to install power outlets in every seat and offer the free headphones.

  

Quoting 1337Delta764 (Reply 32):
Considering Doug Parker's arrogance against customers, I think it is indeed possible, if not immediately likely, that he will order the IFE systems to be removed from all of AA's domestic aircraft.

Can we just drop the IFE nonsense? If IFE mattered VX would be printing money, while AS/G4/NK were losing billions, but it's the exact opposite. What is Parker's "arrogance against customers"? US' network is heavier on flow traffic, ie passengers have a choice over what carrier/hub they flow over, and they have continued to choose US regardless of what IFE they are or aren't offering, and US continues to make money. Sounds like passengers have spoken (again) loud and clear that IFE is not something they're willing to pay for.
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BoeingGuy
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 7:50 pm

Quoting TVNWZ (Reply 42):
Quoting bobloblaw (Reply 24):
A hostile takeover???? AS doesnt want to be sold.

And AA wanted to come out of bankruptcy without merger. Can't always get what you want. Times, and competition, always change.

AA was in bankruptcy and can't always get what they want. AS is healthy, profitable, successful and has a very loyal customer following. They certainly can get what they want right now.
 
HPRamper
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 8:11 pm

Quoting wingnutmn (Reply 41):
Doug Parker is best to keep them fractured, because the pilots at US are an absolute bargain right now at their current pay.

Parker I think just made a sacrifice of this bargain, because at the first vote, the pilot contracts will be set.

Quoting TVNWZ (Reply 42):
AS doesn't need to get involved. But, DL may get involved to protect itself.

DL should be fine. Nothing to protect, really.

Quoting TVNWZ (Reply 42):
It is not the number of competitors, it is the strength and reach of the competitors. A combined AA/US could be a bigger headache than the two seperately.

And it will be. However, I think ultimately it is UA that will feel the bigger impact, from the loss of the US codeshare with nothing to take its place.
 
phxa340
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 8:22 pm

Quoting HPRamper (Reply 36):

As far as IFE goes, I know a lot of people who say that no one pays the fees for the service and hand helds are taking over. While growth might be stagnant, worldwide revenues for 2012 from IFE was 936 million. So while not a drastic number - IFE units are getting lighter, more reliable, and advertisers are willing to pay quite a bit for that captive audience. IFE is probably not going away - but it will definitely need to be tweaked to offer more value to the consumer. I agree 100% with you in that Doug Parker is a very smart guy so if you see IFE on the new American there is obviously a business case.
 
diverdave
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 8:27 pm

Quoting TVNWZ (Reply 42):
Or the other airlines will have wished they bought a refinery. Too early to tell, though.

There was a smiley after my comment. Richard Anderson is a smart businessman, and I expect the refinery to succeed for Delta.

David
 
jetlanta
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 8:29 pm

Quoting MaverickM11 (Reply 3):
On the other hand, DL is now #3. They have become the new US: lots of hubs in the East, one hub in the West that doesn't really serve as a gateway to much of anything, a great operation, improving product and customer service metrics, but ultimately a challenging network. I think we'll see DL try to make headway in NYC, LAX, and SEA, to grow a network that is competitive with the new AA and UA.

No matter what anyone thinks of the communities they serve, ATL, DTW and MSP are FORTRESS HUBS that offer far more than their fair share to support the profitability of Delta. Delta would not trade its position in DTW/MSP for UA's ORD/DEN operations or AA's ORD/PHX operations.

And I'm not just talking about domestic markets. AA wishes its ORD hub could support what DTW can. MSP is light years stronger than UA's DEN hub.

The point is that these carriers will all be about the same size. Each will have strengths and weaknesses. To classify a carrier that has over 450 daily departures from NYC as "the new US" is just silly. There is little challenging about Delta's network. Three strong fortress hubs, one smallish but geographically isolated fortress hub, a strong #2 and growing position in NYC. A balanced global network. What is the challenge? Certainly it is not more challenging than having a fortress hub in CLT, which isn't much bigger than Cincinnati. Or being a distant #2 at ORD. Or a distant #3 in NYC. Let's be real, they all have their strengths and weaknesses. Not one of these carriers is at a significant advantage. And the revenue data proves it.

DL may be #3 today, but it may not be a year from now. The variance in revenues is pretty small and Delta's unit revenue growth has been outpacing the others. As AA/US spend the next five years working out the kinks, Delta will be doing exactly what you suggest, making headway in NYC, LAX and SEA. They'll also be expanding equity stakes in international carriers like VS.

At the end of the say...its a three-way draw. Now lets see who can run the better airline.

Quoting bobloblaw (Reply 29):
At some point you cant lose money at both.

Delta DOES NOT lose money at LAX. I don't know where people come up with that.
 
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RE: DL Response To AA/US Merger?

Thu Feb 14, 2013 8:30 pm

Quoting delimit (Reply 38):
I haven't sen it mentioned, but DL can't be sad to watch the rationalization that will happen between CLT and the AA network. Not only is DL losing a competitor, but they are.going to become stronger in the SE as a result.

No they wont. They will become slightly weaker but not much. When UA was looking at US in 2000, there was going to be west coast point of sale traffic going to the SE that would have shifted from DL to UA. I expect the same but on a slightly lesser scale. CLT will not get substantially smaller and the overall growth of AA will result in some share shift away from DL to AA.

Quoting 1337Delta764 (Reply 32):
Considering Doug Parker's arrogance against customers, I think it is indeed possible, if not immediately likely, that he will order the IFE systems to be removed from all of AA's domestic aircraft.

AA isnt going to remove their IFE.

Quoting luv2fly (Reply 33):
Is US and HP finally combined or is it still East and West? Remember it still has to pass the DOT and there is a 50/50 chance that it could not pass mustard.

??????????????????????sigh