DeltaSFO
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DL Interested In CO Again

Wed Jan 10, 2001 10:10 pm

In an article in this morning's USA Today, it has been leaked out that Delta has renewed its interest in Continental as a merger target in the wake of all these supermergers.

Delta apparently contacted their financial consulting firm to discuss the possibility of going through with it.

WOW! I was thinking AS. If we do a Continental buyout, it will be against their wishes, but we have to do something to stay competitive. We shall see.

DeltaSFO
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USAFHummer
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:15 pm

Now DL and CO are jumping on the bandwagon! Welcome aboard!

Greg
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b757300
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:16 pm

I think Northwest still has the ability to reject any takeover attempt of Continental. Also, Continental has said not no but HELL NO to a full takeover.
"There is no victory at bargain basement prices."
 
Guest

RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:21 pm

If NW dosen't like the deak we'll buy them too.
 
Guest

RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:22 pm

If NW dosen't like the deal we'll buy them too.
 
DeltaSFO
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:22 pm

LOL yeah Spinmaster..... don't mess w/ the Big D.
It's a new day. Every moment matters. Now, more than ever.
 
Notarzt
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:24 pm

> UA/US: United States Airlines
> AA/TW: American Trans World Airlines
> DL/CO: Delta Continental Airlines

Now we have the perspective we were missing a few years back for how the market for the ten biggest US carriers may develop. Three will be left. I am eagerly waiting for a decision on what is going to happen with Northwest Airlines.

No doubt, the Delta/Continental merger would produce the most compatible fleet merger of the mega-mergers. Delta will get rid of their MD-80 and MD-90 narrowbodies, accepting Continental's B737NG orders, the medium-range segment will be operated by B757s and B767s whereas the long-range operations are being served by B767s and B777s. Different powerplants on common types - if occuring - can be replaced quite easily - if required by the new airline.

Daniel
 
steman
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:25 pm

I think it would be great such a merger (more than takeover)
I mean, DL and CO are both very dynamic carriers with similar fleets but different hubs, similar code-share agreements like the one with Air France.
In my opinion it would be better than a NW/CO merger

Ciao

Stefano
 
Guest

RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:30 pm

DLSFO...do you have aol and are you signed on??
 
DeltaSFO
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:31 pm

No... I'm at work, waiting for class to start.
It's a new day. Every moment matters. Now, more than ever.
 
DeltaSFO
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:31 pm

By the way, what concourse do you work at ATL?
It's a new day. Every moment matters. Now, more than ever.
 
Navion
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What About DAL And IAH Hubs.

Wed Jan 10, 2001 10:38 pm

Would Delta leave DAL for IAH? Kind of makes you wonder. Maybe there would be enough traffic for both hubs.
 
DeltaSFO
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 10:41 pm

I think we would. We would have way more market share in IAH than we do in DFW.

DeltaSFO
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LAXFlyer
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 11:13 pm

Gee thats funny. No one at CO knows a thing about this rumor! Just because you read something in a newspaper doesn't make it true. Until Gordon issues a statement regarding this latest. I'll stick with what he told us a few months ago. "We will never merge with DL now or ever and they do need to get a life."
 
b757300
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 11:15 pm

GO Gordon! 
"There is no victory at bargain basement prices."
 
DeltaSFO
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 11:18 pm

Bethune can talk as much as he wants, but if we tender an offer to his stockholders and they accept, then that's it.

DeltaSFO
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Notarzt
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 11:18 pm

LaxFlyer,

Basically, you are correct. The new DL interest in CO was taken from a newspaper and people are discussing about this topic as if it's already a definite fact. On the other hand, just watch those discussions on United/US Air and American/Trans World. Same situation... no final approval. All this is hypothesis.

Daniel
 
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 11:32 pm

Well, as a Continental Preferred stock holder, I can tell you my answer would be HELL NO and I believe a lot of people would share that opinion.

As for AA/TWA, TWA has filed its bankruptcy papers so it looks like it’s a done deal.
"There is no victory at bargain basement prices."
 
flashmeister
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 11:41 pm

DL would not be well-served to pursue CO in a hostile manner. If NW gets serious about them, they could defend CO, and CO would also start a poison-pill process for sure...

Considering where Alaska Air Group stock is at and their abysmal performance this year, they would be a better target for friendly or hostle action.
 
LAXFlyer
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 11:42 pm

These fools come in here with this bull every single day. I am so sick of seeing these posts coming from 16 to 20 year olds who probably don't even work for the airlines. Its really sad because alot of guys who actually did work for the airlines have stopped posting here. The reason? These clowns and their na na na attitude. When I see that crap DL paint scheme on our planes then I'll believe it. In the meantime SFO stop with the childish rambles.
 
b757300
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RE: Breaking NEWS.... DL Interested In CO Again

Wed Jan 10, 2001 11:45 pm

Well, it isn't just a rumor being spread around. It is an article in USA today.

Delta Again Considers Buying Continental, USA Today Reports


Washington, Jan. 10 (Bloomberg) -- Delta Air Lines Inc., the No. 3 U.S. airline, is again considering buying Continental Airlines Inc., which it tried to buy two years ago, USA Today reported.

News that AMR Corp.'s American Airlines, the No. 2 U.S. airline, is close to buying Trans World Airlines Inc. plus a part of US Airways Group Inc. prompted Delta to immediately contact its Wall Street advisers to explore a Continental acquisition, the newspaper reported, citing unnamed knowledgeable people.

Delta and Continental wouldn't comment, USA Today said.

UAL Corp.'s United Airlines, the No. 1 U.S. airline, is waiting for regulatory approval to buy US Airways. If both the UAL and American transactions take place, Delta would be left with 18 percent of the market.

Airlines rely on the size of their networks to win contracts with companies that let them carry the most lucrative passengers in the industry -- business travelers. Plus, frequent fliers prefer airlines that give them more ways to earn and use their mileage credit. Costs can be spread across a bigger network.

Jan/10/2001 7:28 ET

For more stories from Bloomberg News, click here.

(C) Copyright 2000 Bloomberg L.P.



Any redistribution of Bloomberg content, including by framing or similar means, is expressly prohibited without the prior written consent of Bloomberg L.P. Any reference to the material must be properly attributed to Bloomberg News.

The information herein was obtained from sources which Bloomberg L.P. and its suppliers believe reliable, but they do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any securities or commodities.(C) Copyright 2001 Bloomberg L.P. BLOOMBERG, Bloomberg News, Bloomberg Financial Markets, Bloomberg Television, Bloomberg News Radio are trademarks, tradenames and service marks of Bloomberg L.P.
"There is no victory at bargain basement prices."
 
Guest

RE: Breaking NEWS.... DL Interested In CO Again

Thu Jan 11, 2001 12:09 am

Hmmmm, I still suspect that this may well end up as a reversal of the scenario proposed - ie CO taking over DL. Contacts of mine both on Wall Street and the City (London) say that CO has been talking to various investment bankers recently - and Delta is starting to look somewhat weaker at the moment.

Time will tell!!
 
DeltaSFO
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Laxflyer, Ceilidh

Thu Jan 11, 2001 12:21 am

Laxflyer....

As you can see, it's an article in USA Today, not some "childish rambling." And as for your cheap attack on my credentials, next time you're at SFO, you can stop by DL SFOTR and aplogize in person.

Ceilidh......
I've already mentioned why Delta cannot be taken over.... I presume you've seen it on that thread. Your contacts are misinformed.

DeltaSFO
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thomacf
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RE: Breaking NEWS.... DL Interested In CO Again

Thu Jan 11, 2001 12:40 am

This can't happen, I live in Cleveland and know that if this goes through or a merger with NW, Cleveland will get shafted because it is to close to Cinn. and or Detroit. It would just kill the city.
 
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Sources And Accuracy...

Thu Jan 11, 2001 12:46 am

...this may all be true, or it may be another round of baseless speculation. Look at the provenance of the information as we know it now:

Bloomberg citing USA Today citing "unnamed knowledgeable people."

Just because it has been published by a reputable news outlet, doesn't make it news- or true! Ask the shareholders of Emulex.
...three miles from BRONS, clear for the ILS one five approach...
 
cdfmxtech
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RE: Breaking NEWS.... DL Interested In CO Again

Thu Jan 11, 2001 12:47 am

Now, now everyone........please enough with the soap operas. I mean, it is really the most interesting stuff to talk about....but talk about jumping to conclusions. If I didn't work in the airlines, reading these posts would have me running back and forth with all the directions that the go from one to another.

The fact still stands:
United Airlines
American Airlines
Delta Airlines
Northwest Airlines
Continental Airlines
USAirways

There are still 6 airlines here.
 
Guest

RE: Breaking NEWS.... DL Interested In CO Again

Thu Jan 11, 2001 1:07 am

All of the same rumors emerged whenm UA and US announce their merger. Its never going to happen.

Just Rumors

Jack
 
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RayChuang
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RE: DL Interested In CO Again

Thu Jan 11, 2001 1:52 am

Delta and Continental merge? Surely you jest.  

The issue of a CO/DL merger is simple: New York City access. With DL owning a LOT of gates at JFK and CO running EWR as a "fortress hub," the DoJ will not be happy that one airline will totally dominate the #1 aviation destination in the USA. DL will have to end up selling their coveted facilities at JFK to please the DoJ, something DL will UNLIKELY do.

Now, Delta buying Alaska Airlines is a totally different story.   It gives Delta a major presence on the US West Coast, which they can leverage for more flights to Asia from LAX, SEA and possibly PDX and SFO.
 
ContinentalEWR
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RE: DL Interested In CO Again

Thu Jan 11, 2001 2:22 am

It won't happen b/c of the NW thing and logistically and regulatory-wise, it would not work. However, if it does happen, CO will be the one doing the buying. It is
in a much stronger position to do so and will be in the driver's seat. I for one, would be delighted to see the Continental name replace Delta, those ugly widgets, that stupid livery, and the global aspirations of Bubba Air.

 
Tan Flyr
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RE: DL Interested In CO Again

Thu Jan 11, 2001 2:23 am

Consider this, it is entirely possible that the remaining majors can find PROFITABLE opportunities on their own. UA & AA will spend years tripping on all the debris of the mergers(acquisitions).

I would not be running around saying that CO needs DL, NW this or that...If you look at it there some smaller things that could be done..One of them would benefit from AS. No doubt. Also There is value in Cactus at PHX. probably a better fit for CO.

The managments need to think how to operate SMARTER rather than Larger.

All the debt incurred to buy all this stuff would scare the hell out of me particularly with still high fuel and a slowing economy....poor scenario.
 
caetravlr
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RE: DL Interested In CO Again

Thu Jan 11, 2001 2:36 am

I am not sure why all you guys seem to think that DL would not be in a position to buy CO assuming they could work out all the regulatory hurdles, and that someone else like NW was not in a position to block it. I don't know the cash situation with either carrier, but if UA still has enough capital to buy US, and AA still has enough capital to buy TWA, then I am most certain that Delta is sitting on a pile of cash and willing investors big enough to buy CO. CO may not be having the same labor problems at this point, but that does not mean that they are more financially sound at this point. All DeltaSFO said was something that he saw in an article in a well respected publication. I have not red the article, but until we see some official news, no one knows what will happen.
A woman drove me to drink and I didn't have the decency to thank her. - W.C. Fields
 
nwa747-400
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RE: DL Interested In CO Again

Thu Jan 11, 2001 2:36 am

CO wants nothing to do with DL as Bethune has stated time and time again.

NW has the right to block any buyout of CO for the next 25 years.

NW/CO want to stay the way they are in the alliance and I don't think it will change.

That DOES NOT mean that NW and CO won't look to buyout other airlines such as AS and HP.

 
watewate
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RE: DL Interested In CO Again

Thu Jan 11, 2001 2:50 am

I want to address a few sentiments expressed in above posts.

It's been said that Bethune wants nothing to do with Delta. But has anyone heard from him since all this frenzy started? His words are not set in stone- I'm sure he'll do whatever is necessary to stay competitive in the business.

As for NW having the right to block any buyout of CO for next 25 years- what happens if CO decides to buy DL? Just a thought.

NW/CO's alliance is nowhere as extensive as Star, Oneworld or even upstart SkyTeam. They lack presence in the Australia and South Asia as well as Indian subcontinent. NW, CO and KLM can't go at it themselves. BTW, their so called 'alliance' doesn't even have an official name.

Someone posted saying that those 16-20 are ruining the forum. This is a place where users are invited to voice their opinions. Their opinions should not be discounted based solely on their age and their lack of real experience in the industry. Sometimes the most objective opinions come from those who observe the situation from afar.
 
DeltaSFO
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RE: DL Interested In CO Again

Thu Jan 11, 2001 2:59 am

Watewate... all good thoughts, except I think I've explained about a zillion times why DL cannot and will not be taken over by another carrier.

DeltaSFO
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COTPARES
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RE: DL Interested In CO Again

Thu Jan 11, 2001 3:04 am

Why does it have to be a buyout Alliances are just as profitable without all the labor and union disputes everyone keeps their jobs and seniority. pax get increased routing and frequent flyer mileage opportunites . Competition is maintained because the CUSTOMER chooses whom they fly on where routing is
similar for example PHX-EWR-MIA customers choose to fly on CO vs HP PHX-EWR based on their personal preference on schedule or carrier. HOW SIMPLE! As far as companies needing an influx of cash companies can buy a non controlling interest in the company (NN) needing the money.EXactly like tnbe NW/CO alliance has now become!
Twelve days to Independance Day!
 
Guest

RE: DL Interested In CO Again

Thu Jan 11, 2001 4:48 am

DeltaSFO - I assure you, Delta can be taken over by anyone with sufficient resources to do so. The employees own 15% of the company - great. However, that's nowhere near enough to block any takeover - not matter how much wishful thinking there may be to the contrary.

Let me put it this way - how would you, as a Delta investor, like to find yourself in a situation where you can't benefit from a takeover bid? Not very happy, I'd bet!

So do you really think that the majority shareholders - owners of 85% of Delta's stock, whould allow themselves to be hogtied like this??

I don't think so!!

Now, if you had 51% or more (like the UAL employees) then that's a different story....
 
DeltaSFO
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RE: DL Interested In CO Again

Thu Jan 11, 2001 4:52 am

Ceilidh....

I'm sorry to disappoint you, but Delta pilots negotiated an ESOP contract with the company where they took on 15% of the company stock, and the terms of the contract dictated that as long as the pilots own 15% of the company, they would be granted right of refusal over any leveraged buy out or takeover bid. It's a legally binding contract, and the company did this intentionally, in order to protect itself from a takeover.

Please don't tell me I'm wrong, because I double and triple checked this. It's true.

DeltaSFO
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exusair
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RE: DL Interested In CO Again

Thu Jan 11, 2001 4:56 am

Bethune won't sell CO because he loves his job too much. Sleeping with the flight attendants and picking up new airplanes from the Boeing factory. He is living the Hollywood version of what an airline CEO does. The spooky part of all of this is if the merger goes through, will Bethune remain as CEO of the merged companies, with Mullin leaving? Also, which pay scale will the merged companies observe if CO ends up with the upper hand? I knew I should have been a lawyer or a doctor. For all of you parents put there, don't ever take your children into the cockpit of an airliner, you will ruin that kid for life! And for all of you parents who are already in the industry, tell your kids that daddy works at the airport, provide no specific details about what they do. Please spare your childern the future of being an airline employee!
 
Notarzt
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RE: DL Interested In CO Again

Thu Jan 11, 2001 5:07 am

DeltaSFO,

Listen good to what Ceilidh (Neil) says. He's one of the world's most successful airline entrepreneurs we have ever seen. Hmmhhh, the most recent success he had was Caledonian Wings airline that won't take-off at any time.

So sorry.  

Daniel
 
DeltaSFO
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RE: DL Interested In CO Again

Thu Jan 11, 2001 5:08 am

It would be interesting, if a DL buyout of CO happens, to see who stays on top.... Bethune has a good reputation among the troops at Delta.

Delta pay scales would be the rule, obviously.

DeltaSFO
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lax2000
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RE: DL Interested In CO Again

Thu Jan 11, 2001 5:29 am

It would be nice if CO too over DL.
 
Guest

RE: DL Interested In CO Again

Thu Jan 11, 2001 5:51 am

DeltaSFO - Right of Refusal means that they have first option to buy the company on the same terms as those offered by an outside source. What you're confusing this with is Right of Veto.

Exusair - the pay scales will be those of whoever does the taking over; I can hardly see Bethune being wildly enthusiastic about overpaying his pilots. He's tough, but he's fair.

Notarzt - don't write off CalWings too quickly my friend ... keep watching the website for some news that will make you (and all other Euro L1011 afficionados) very happy!
 
b757300
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Continental's Reply

Thu Jan 11, 2001 6:10 am

Continental CEO sees no urge to merge


NEW YORK, Jan 10 (Reuters) - Continental Airlines Inc. Chief Executive Gordon Bethune said on Wednesday the No. 5 U.S. airline is comfortable with its position in the industry despite deals by the top two airlines to increase their already leading market positions.

Bethune said Houston-based Continental's alliance with No. 4 carrier Northwest Airlines Corp. effectively allows it to offer customers benefits competitive with American Airlines and United Airlines, even after those carriers' planned acquisitions of Trans World Airlines Inc. and US Airways Group Inc. .

Bethune was speaking with reporters at the Wings Club, a New York aviation society where Don Carty, head of American Airlines parent AMR Corp. was set to give a speech. "We're very happy with our agreement with Northwest," said Bethune, who is president of the Wings Club. He estimated the U.S. market shares of Continental at 10 percent and Northwest at about 12 percent, which together are nearly as large as the expected 25 percent for American and 26 percent for United if their deals are completed.

Through Continental's marketing agreement with Northwest, customers can accumulate frequent flyer miles usable on either carriers and share airport lounges, and the two airlines coordinate their schedule for customer connections. "That's what customers want," Bethune said.

Moreover, Northwest, through special stock, has a veto over a sale of Continental to a third party. "If Delta (Air Lines Inc. ) or any other big airline was thinking about buying us, we'd give them (Northwest Chief Executive) John Dasburg's number," Bethune said.

Bethune said Continental has not received a call from Delta to inquire about a deal. "We haven't talked with anyone about anything," he said. After United first announced its deal to acquire US Airways, many analysts envisioned linkups of American with Northwest and Delta with Continental.

Continental is always evaluating the possibilities for acquisitions, Bethune said. But he pointed out that in airline mergers, "the consistency drops off. It's a very difficult way to have consistent service."

15:47 01-10-01

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"There is no victory at bargain basement prices."
 
DeltaSFO
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RE: DL Interested In CO Again

Thu Jan 11, 2001 6:21 am

Ceilidh.....

I'm not going to waste my time discussing this with you. You and I both know that DL is in by far the strongest financial position of any U.S. carrier, in terms of profit, cash reserves, and debt/equity ratio. Continental, frankly, could not afford to take Delta over. Nobody can. And Delta pilots will not allow it. Argue all you want, play semantics all you want. Won't happen. Period.

Though you may think that Bethune can muscle CO pilots around, you are dead wrong. CO pilots know what they deserve and they will make sure they get it come contract time.

Since you bring up CalWings, I will say only this. I've done some research within the company and I know what the truth is.

DeltaSFO
It's a new day. Every moment matters. Now, more than ever.
 
Guest

RE: DL Interested In CO Again

Thu Jan 11, 2001 6:34 am

Any combination between Delta and Continental would not have the benefit of the argument that the airline being acquired, whether it be Delta or Continental, is on the verge of bankruptcy.

This is the argument that both American and United can make with respect to TWA/US Airways and USAirways respectively. And, because they can make it, it significantly raises the prospects of all of these acquisitions and mergers being approved.

What should not go unnoticed here is that American won the bidding war against Delta and Continental for the 49% stake in DC Air. That means in fact that American had more cash on hand to make the whole deal happen. Of course, it also had the idea of how to package that deal with the others, so that United's proposal to buy USAirways had a greater chance of being approved. In the end, that must have sealed its chances of the stake in DC Air.

Still, American is paying much less for the assets of USAirways, the stake in DCAir and TWA than it would have had to pay for Northwest. You've got to think that Northwest is feeling pretty silly for valuing itself so highly, when in fact all it could offer American were route authorities to Asia, but not a single viable aircraft type.

Unfortunately for everyone else, Northwest included, American just bought the last discount ticket on this merger flight. If Delta now wants to buy Continental, it is going to have to pay an unheard of premium, especially since it must buy out Northwest before it even considers buying Continental, who may or may not be hostile to any takeover attempt. If it becomes hostile, that will likely raise the price Delta has to pay even higher. One also has to wonder what would be in it for Northwest, since by agreeing to any deal with Continental it would basically relegate itself to a third tier carrier, and maybe even bankruptcy if it can no longer compete with the mega-carriers.

In the meantime, however, none of the remaining carriers are anywhere close to bankruptcy. So, the DOJ is not likely to operate under the urgency that jobs might be lost and access limited if one of these carriers didn't succeed in taking over the other. What that means in effect is that the scrutiny on any merger between Continental, Delta or Northwest is likely to be more objective than it has been or is going to be for American/TWA/DC Air and United/US Airways.

I remember reading in the Chicago Tribune about a month ago that American has always been regarded as the most innovative carrier in the market, and that all along this has been the advantage that it has leveraged against the slightly bigger United. Well, it seems that American decided to share some of that brainpower with United, and carve up the playing board so that whatever anyone else tried to do to catch up to them would be two or three times as expensive and more likely to trigger the kind of scrutiny and to cause the kind of consolidation problems that mergers usually do.
 
B-787
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RE: DL Interested In CO Again

Thu Jan 11, 2001 7:01 am

To hell with a DL/CO merger, I mean this is absurd CO is my favorite airline.
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DeltaSFO
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RE: DL Interested In CO Again

Thu Jan 11, 2001 7:06 am

In the long run, I think you're right B-787. Doubt that a DL/CO merger would happen. Way too much overlap. Too much risk.

DL/AS is guaranteed to work. While it's a much less extravagant acquisition, the Pacific Coast States are where Delta's network is sorely lacking. Problem solved instantly. Much less capital required in this acquisition. It fits beautifully into the Asia plan.

And it puts us right up there with UA/US and AA/TW.

DeltaSFO
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RayChuang
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RE: DL Interested In CO Again

Thu Jan 11, 2001 7:15 am

DeltaSFO,

I think DL buying out AS is a GREAT plan.

There are some big advantages to this plan:

1. DL and AS have a very good overlap of the type of planes in their fleet. Both airlines have substantial investments in MD-80 and 737 models, so integrating the two won't be a big problem. In fact, once DL takes over AS, DL might even expand on the 739 order for possible use on NE Corridor Shuttle and high-capacity regional flights.

2. DL gets lots of gateways to Asia (SFO, PDX, SEA and ANC).

3. DL will get the western USA presence it sorely needs.
 
cba
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RE: DL Interested In CO Again

Thu Jan 11, 2001 7:49 am

CO and DL would be a good team, but I a merger/buyout would be bad. An alliance like the one CO has with NW would work, but DL is tied to Skyteam and NW is tied to KLM. Skyteam is not nearly as big as the powerhouses, Star and One World. NW, KLM, and CO could join Skyteam. This would give Skyteam more power in Europe (AF+KLM), USA, (NW+CO+DL), Asia (NW), and in South/Central America (CO, Aeromexico).

It probably won't happen, but it would work out nicely.
 
ScottB
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RE: DL Interested In CO Again

Thu Jan 11, 2001 8:18 am

DeltaSFO-

You really ought to get your facts right when you talk about Delta's financial position. When you look at the 2000Q2 numbers from USDOT, you see that Southwest is in a stronger position in all three categories you stated:

Profit (Operating):
DL - $577.4 million = operating margin of 14.5%
WN - $314.6 million = operating margin of 21.5%
"The operating profit margin rose 0.7 percentage points to 21.5 percent, still the highest among all majors exceeding the next closest major (Delta) by 7 percentage points."

Cash Reserves (in days):
DL - 33.5 days
WN - 57.4 days
(note that CO had 59.0 days of cash coverage)

Debt to equity: (higher is worse)
DL - 52.6%
"Total debt soared a major group high $2.84 billion to $5.52 billion, more than offsetting growth in total equity, causing the debt-to-investment ratio to jump 15.2 percentage points to 52.6 percent."
WN - 22.5%