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RayChuang
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DL To Tie Up With NW/CO?

Wed Jan 31, 2001 10:37 pm

Hmmm!!

Please read this article:

http://cnnfn.cnn.com/2001/01/31/deals/airlines_talks/

It appears that Delta is talking to Northwest/Continental about some sort of tie-up, whether it is code-sharing or even a possible merger.

However, I do have some BIG concerns about such a combination. The obvious one is access to New York City: between DL and CO they could put a hammerlock on the largest air market in the USA, if not the world. This could force DL to abandon much of their planned expansion at JFK or sell it off to either AA or UA.
 
Guest

RE: DL To Tie Up With NW/CO?

Wed Jan 31, 2001 11:20 pm

My wife heard about it on the radio this morning about this merger or partnership. This would give Delta a major hub at EWR and yes they would have to sell off their hub at JFK to the other two major carriers.
 
HlywdCatft
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RE: DL To Tie Up With NW/CO?

Wed Jan 31, 2001 11:24 pm

I really hope not

I don't think this stuff with American and United taking over other airlines should happen either. We are going to have Microsoft all over again. What would happen to small airlines like Frontier, Pro Air, Spirit, Midway etc?

It is bad enough that United has USairways with United now having a good strong hold on the east coast. They already have the west coast with San Fransisco, LAX and Seattle. They got a pretty good hold in central US with Denver and Chicago. Now United has east coast with Philly, Pitt, Charlotte and Washington Reagan. United already has Dulles.

American would gain St. Louis and expand furthur into JFK with American already having a hub there and would then expand into TWA's operations.

A Delta/Northwest/Continental merger could be wise from the three airline's perspective due to Delta's European routes along with Northwests and Continental's routes to Europe. Continenal has a lot of South American routes and Northwest with their almost dominating Pacific routes.

Yes a Delta/Continental/Northwest merger could be potentially dangerous for New York area, but it could even be worse in great lakes area with Detroit having the Northwest superhub, Cleveland with Continental and Cincinatti with Delta along with Northwest in Minneapolis.

Not too far down south would have Memphis, Greensboro, Orlando and Atlanta, with Houston and Dallas (with Delta's hub) to the west.

The Pacific region would probably not be too affected with Delta maintaining its Salt Lake City hub and its small hub at LAX.
 
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RayChuang
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RE: DL To Tie Up With NW/CO?

Wed Jan 31, 2001 11:30 pm

I think the issue of New York City access is the one that may derail the whole idea of a DL tie-up with NW/CO.

Remember, DL has a huge presence at JFK and an increasing presence at LGA; CO practically owns EWR. Now you know why DL combined with NW/CO isn't such a great idea, because it would severely limit access to the NYC airports in general.

I think a DL + NW/CO combination will require that DL leave JFK and concentrate on EWR exclusively. That way, the current DL gates at JFK can be divvied up between UA and AA.
 
caetravlr
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 12:29 am

My take on the whole thing is this. Airline consolidation as a whole is pretty bad. However, if UA/US, and AA/TWA go through, then a third superpower would be a good thing. I think some sort of DL/CO/NW combination would be more fiercely competitive with the other two megacarriers than the three would be by themselves total. If all three sets of agreements go through, then they may balance each other out to some extent.
A woman drove me to drink and I didn't have the decency to thank her. - W.C. Fields
 
flashmeister
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 1:38 am

I can't see how a merger here would make any sense... hubs are too close, NW's fleet is very different, and it still doesn't address the problem out west.

DL needs to look at smaller acquisitions like AS to do this right.
 
Guest

RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 2:52 am

Very interesting - this is actually something that I mooted at the beginning of the year after hearing persistent rumours about CO (a) building up a war chest to fund an acquisition; and (b) CO maybe being interested in a takeover of DL.

DL's route-structure would tie in very well with CO's. CO's CEO, Gordon Bethune, is a first rate individual and would, I believe, be able to turn around DL in a similar manner to which he has worked wonders with CO. As for hubs, DFW would be dropped in favour of IAH; JFK dropped in favour of EWR; and CLE in favour of CVG.

As for NW, what a lot of people forget is that CO has now bought back all of its stock from them and they are no longer dependent on NW signing off on a deal - however a three way deal (DL/CO/NW) would give them a global coverage that would make them a very serious contender with both AA and UA.

In large part, DL's problem is due to its existing management and the pilots union - any strike action on their part will cause the value of their stock to sink. Wall Street is already very cautious about it as a company; its shares are trading at around its NAV, unlike those of CO.

I believe that a merger/takeover of DL by CO would result in a first class operation and one which the employees would be proud of.

Go Gordon!!  Big thumbs up  Big thumbs up  Big thumbs up
 
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iahcsr
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 2:53 am

Gee.... airlines have a little chat, and everyone has them merged already.....
CO has a employee meeting today, lets see what is said about this.
I suspect that if such talks have been held, they are of the 'what if UA/US AA/TW' type. So don't read too much into this just yet.
Working Hard, Flying Right Friendly....
 
nwa747-400
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 7:49 am

NW does have control over any proposed takeover of CO

I think NW/CO/DL are just talking about their options should these megamergers happen. I am pretty sure they are just "making friends" with each other again after the cut throat fare and customer wars of the late 90s.
 
SESGDL
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 7:51 am

Actually Ceilidh,

I heard about this too! AND, Delta would takeover Northwest or Continental, NOT CO taking over Delta!!! God, you're pretty dumb, CO would have to take out loan after loan to takeover Delta. Delta is worth around $20 Billion, the day CO can just throw away(or even have) 20 billion spare dollars will be the day that CO takes over the world!!!!!(And that ain't gonna happen)
 
deltairlines
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 7:55 am

Delta would drop the JFK flights that currently compete with CO (TLV, FRA, CDG, etc.) COs Cleveland hub will be dropped except for a few flights (New York, LAX, LGW, other key markets). Delta would drop DFW for IAH. MEM and ATL would most likely both remain, with Memphis maybe playing a more central US role.

Jeff
 
DeltaSFO
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 8:05 am

Very interesting - this is actually something that I mooted at the beginning of the year after hearing persistent rumours about CO (a) building up a war chest to fund an acquisition; and (b) CO maybe being interested in a takeover of DL.

DL's route-structure would tie in very well with CO's. CO's CEO, Gordon Bethune, is a first rate individual and would, I believe, be able to turn around DL in a similar manner to which he has worked wonders with CO. As for hubs, DFW would be dropped in favour of IAH; JFK dropped in favour of EWR; and CLE in favour of CVG.

As for NW, what a lot of people forget is that CO has now bought back all of its stock from them and they are no longer dependent on NW signing off on a deal - however a three way deal (DL/CO/NW) would give them a global coverage that would make them a very serious contender with both AA and UA.

In large part, DL's problem is due to its existing management and the pilots union - any strike action on their part will cause the value of their stock to sink. Wall Street is already very cautious about it as a company; its shares are trading at around its NAV, unlike those of CO.

I believe that a merger/takeover of DL by CO would result in a first class operation and one which the employees would be proud of.

Go Gordon!!


Keep it up Ceilidh....

Makes for great entertainment! I've showed your "work" to some of my fellow CSAs. We find it quite amusing.

DeltaSFO
It's a new day. Every moment matters. Now, more than ever.
 
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 8:07 am

Ceilidh- are you nuts? CO's just a bit too small to even dream of buying out DL. DL has considered taking over CO, but NW has the final say as to whether that happens. And unless DL agrees to continue the NW alliance *and* shift some of CO's assets their way (not to mention a large chunk of DL stock), NW wouldn't dream of giving up their big strategic partner. I can't see a three-way merger happening, though a three-way alliance isn't such a stretch. NW and CO could even wind up merging into a single carrier before all is said and done.
But CO won't, I repeat, *won't* buy DL.
 
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iahcsr
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 9:14 am

Ok folks, I just got home from CO's monthly employee meeting, and of course this subject was first on the list of things to talk about. Both GB1 and GB2 have an 'interesting' way with words, but I'll condense it to the basic facts: CO is NOT talking to DL, or anyone else, at this time about any 'tie up' or 'hook up' or merger. DL might be interested in such a thing, but CO is not. At the moment CO is in a postion where it doesn't need to look for outside support. Bigger is not always better: a smaller airline with happy employees and happy customers stands to do well in the long run over a larger airline with unhappy employees and even unhapper customers. Oh, and don't think that CO couldn't buy DL if it wanted to. Hundreds of large companies have been bought by 'smaller' ones. CO CAN aquire the financing to do it. But you are correct in saying it won't ... but NOT because it CAN'T.
Working Hard, Flying Right Friendly....
 
DeltaSFO
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 9:27 am

Oh, and don't think that CO couldn't buy DL if it wanted to. Hundreds of large companies have been bought by 'smaller' ones. CO CAN aquire the financing to do it. But you are correct in saying it won't ... but NOT because it CAN'T.

Actually... the D/E ratio of a combined DL/CO purchased by CO would be 5 to 1... absolutely unheard of. There is no way anybody could acquire the financing for that kind of merger.

This was pointed out to Ceilidh in a different thread by Seasonedflyer. Ceilidh, of course, chose to ignore it.

In addition, Delta pilots hold right of first refusal of a takeover of DL, and I'm sure they--probably combined with the rest of us DL employees--would match any offer. But we know now why it wouldn't come from Continental.

DeltaSFO
It's a new day. Every moment matters. Now, more than ever.
 
FlyPNS1
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 10:01 am

Where there's a will, there's a way.....and so yes it is possible for CO to buy DL. However, I agree that it is unlikely to happen.

Bethune doesn't want to deal with all of DL's problems nor all of the hassles of merging together these two airlines. The debt would be extremely burdensome and would send CO's stock down the drain quickly.

CO could also say goodbye to all of those awards for Best Airline because the merged airline would be a mess. DL employees and CO employees would not get along with each other well and the labor costs would be enormous. Remember, the CO pilots want just as big of a raise as DL...if not bigger. No one would be proud of working for this massive airline where delays, lost luggage and constant chaos would abound. Gordon is a great CEO but there are somethings even he can't do and I don't think he wants to destroy all of his work the past five years by creating this colossal giant.

Secondly, the DOJ would not be pleased with this merger. After allowing the TWA/AA and US/UA deals, there will be substantial pressure on the DOJ to stop the merger madness especially when people start to experience how poor the service is on these newly merged airlines. Secondly, one of the only reasons these mergers are being allowed is that TWA and to a lesser extent USAirways are struggling carriers. AA can pull this deal off because TWA is going to go bankrupt and UA is using the same argument with US (although I don't agree totally on that one). CO would have a real hard time convincing the DOJ that DL is approaching bankruptcy anytime soon....I can see it now..."Well your honor, they only made a billion dollars last year...so we feel that they are going to go bankrupt soon"....yeah right!!!!!

So, yes it is possible for CO to attempt a hostile takeover of DL, but IMO it would be a grand mistake for CO and would destroy everything they've worked so hard for.
 
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iahcsr
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 10:13 am

Hmmmm.... 5 to 1... that would be hard to swing wouldn't it? How about CO buying NW then?
Working Hard, Flying Right Friendly....
 
a32
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 10:30 am

I must say that many underestimated the shrewd business acumen of the NWA management. The epicenter of all future possibilities is Eagan, Minnesota.
aka NWA World Headquarters.
My personal opinion remains that AA still desired a dance with NWA.

regards
 
Iflewrepublic
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 11:44 am

We must not forget that there once was a time when a smaller airline purchased a larger airline outright. Think back to 1986, when the number seven airline, Northwest "Orient" Airlines, bought out the number six airline, Republic Airlines, leaving Northwest the surviving entity. It has happened before and it can happen again.

On a side note, it would have been interesting to see how things would have turned out had we accepted American's offer to "dance."

Iflewrepublic
Aviation is proof that, given the will, we have the capacity to achieve the impossible.
 
Guest

RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 11:57 am

I think everyone is looking at this all wrong... If I know Delta, they probably are too...

It can't just be a deal where Delta goes to Northwest and asks them "How much do you want for your stake in CO?" It must be a deal where the interests of all parties are served, or it is not going to happen.

The brilliance of American's move to purchase the US Airways assets was that it went to United with a plan of how to solve some of the potential drawbacks of the latter's original deal, including all of the F100's and MD-80's that United was going to get with the purchase of US Airways. Goodwin and Wolf were also looking for a PR man and found it in Carty. Carty was able to make the case that Goodwin and Wolf failed to make with regulators and the public, because on top of mitigating some of the effects of the US Airways deal he found a poster child for all of the transactions in TWA and its employees.

If Delta approaches the problem as creatively as American did — and, I know I may be asking for the impossible here, they might be able to craft a solution that leaves both Continental and Delta happy. I stipulate these two and leave Northwest out of the final product, because I firmly believe that there is a greater will at Continental and Delta to remain viable brands than there is at Northwest. To the extent that this might be true, it would be easier for Northwest to sell itself to both Continental and Delta than for Delta to buy Continental, or vice-versa. This would work, provided Delta and Continental could figure out an equitable way of splitting Northwest's assets.

We know from American's plans to buy Northwest that there are some major stockholders at Northwest who want to sell out. They just overestimated how badly American needed to do something with them. If they still want to sell, and would be willing to take that money from both Delta and Continental, there might be a good chance that Delta and Continental could each get something out of the deal that would keep them competitive with UA and AA. One perhaps could get the routes to Japan, the other the routes to China, one the Minneapolis Hub, the other the route authorities to India.

Together, Delta and Continental could probably come up with the $10 billion that Northwest wanted from American. They could also seek to renegotiate the price; or, they could seek to bring in some additional buyers for those Northwest assets that wouldn't have any value to either of them in order to come up with the $10 billion in total. If they were not able to sell assets like the Detroit Hub and the Memphis Hub, then, 10 billion dollars would be too high a price to pay, since I don't see how some of the remaining assets would fit into Delta's or Continental's network.

Obviously, from Delta's point of view splitting Northwest's assets would not be as good a deal as buying Continental outright... But, Continental doesn't want to put itself on the table or on the chopping block. Take Bethune's words quite seriously. He likes playing the airline game much too much to give it up. On the other hand, Northwest doesn't have such an ego.

Now, do I think Delta is capable of thinking this up all by themselves?... Probably not!... In any case, this idea came to me from studying the UA/US Airways/AMR/TWA deal. There two airlines came together to solve their mutual problems. Both of them may have wanted US Airways at one time, but given the reality that UA got there first the people at AA were smart enough to figure out how they could salvage something from US Airways, combine it with TWA, and get everything and more that they might have gotten from the Northwest deal, all for a much lower price. Plus, it is very clear that some major stockholders at Northwest have been getting antsy about all of the Northwest shares in their portfolios, and they want out. Remember that is what got the ball rolling in the original United/US Airways deal.

©ladevale
 
notdownnlocked
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 1:56 pm

Speaking of a smaller company buying a larger one, how about CO buying DL or NW and renaming themselves Texas International. Imagine 747's flying the Lone Star all over the world. So does anybody know who owns the Texas International Airlines trademark or is TI still flying except in CO colors? Big grin
 
toxtethogrady
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Ol' Frank Lorenzo Played So Many Shell Games...

Thu Feb 01, 2001 2:23 pm

It's impossible to know who is who. I think they're all named 'Eastern'....

CO issued a very terse 'no comment' press release about their situation...which usually means the talk is more than talk.

I, however, would find this merger combination about as anticompetitive as the AA/TW combination or the UA/US linkup. I would even be suspicious of a DL/CO/NW alliance, which would be a merger with all three carriers remaining independent. I don't think Houston would benefit; as long as CO was independent, they could be counted upon to boost air service, especially from IAH to Mexico. DL would not share the same commitment to IAH...
 
notdownnlocked
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RE: Ol' Frank Lorenzo Played So Many Shell Games...

Thu Feb 01, 2001 2:55 pm

Lorenzo's legacy is still alive and well. One of the reasons we are discussing this very DL/CO/NW topic is in a way related to him. If you can remember it was TW that ran with open arms to Icahn in order to avoid being taken over by Lorenzo which got TW in the mess they are in today and we are just seeing the fallout 20 years later with the airline industry now in turmoil. Either way TWA was screwed with the choices they had at the time. TWA still made the right choice as they gained another 20 years to their life although not the best. To change the topic can anybody make one of those computer drawings of a Texas International 747-400? It would be nice to see.
 
notdownnlocked
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 3:46 pm

Thursday February 1, 1:43 am Eastern Time
U.S. Congress to quiz airlines about consolidation
By John Crawley

WASHINGTON, Feb 1 (Reuters) - Chief executives from American Airlines (NYSE:AMR - news) and Trans World Airlines (AMEX:TWA - news) face congressional scrutiny on Thursday as lawmakers zero in on proposed airline industry consolidation.

American Chairman Donald Carty and TWA President William Compton top the witness list of industry executives, antitrust experts and lawmakers from both houses of Congress for the Senate Commerce Committee hearing.

American's plan to widen its reach by purchasing TWA for $500 million plus $3 billion in debt as well as some assets of US Airways (NYSE:U - news) has triggered a new round of fears on Capitol Hill and elsewhere about the impact of industry consolidation.

Compton, in an interview with Reuters on Wednesday, said he would stress to Congress the value of an American purchase to the industry, TWA employees and consumers.

``Something needed to be done to rescue TWA,'' Compton said of the financially ailing carrier. ``It is more appropriately looked at as a rescue.''

The TWA deal, which required TWA to file for Chapter 11 bankruptcy protection last month, is widely viewed as a catalyst for satisfying antitrust concerns over plans by United Airlines (NYSE:UAL - news) to purchase US Airways for $4.3 billion.

A beefed-up United, the world's biggest airline, and a stronger American, the second-biggest, would have about half the domestic market to themselves.

The two companies' plans may set the stage for a possible third merger involving midsize carriers like Delta Air Lines (NYSE:DAL - news), Continental (NYSE:CAL - news) or Northwest (NasdaqNM:NWAC - news), which may be looking to get bigger to compete domestically or shift their focus overseas.

Congress has expressed frustration with record airline delays, lost baggage and other problems that affect service and industry performance. Several members of the Senate and the House of Representatives are pushing passenger rights bills that, among other things, would give travelers legal recourse against the airlines for poor service.

LAWMAKERS WORRY ABOUT SERVICE

Some lawmakers say industry consolidation will only hurt service and plan to raise that issue at Thursday's hearings.

But Compton said there would be plenty of competition in the airline industry and dismissed assertions that bigger carriers would deliver less for consumers.

For example, he said, a larger airline with numerous routes may be able to offer passengers better options for avoiding delays due to bad weather than a smaller carrier with limited service could. The airline industry endured record delays in 2000, mostly due to bad weather.

The Commerce Committee passed a nonbinding resolution last year that opposed the United deal because of competition concerns. But not all members of Congress oppose airline consolidation, especially if it helps their constituents.

House Democratic leader Dick Gephardt and Democratic Sen. Jean Carnahan, who also is a member of the commerce panel, have publicly supported the TWA deal as good for Missouri. Both represent that state, home to St. Louis-based TWA.

The Justice Department plans to make a decision this spring about its antitrust concerns with United's plan. TWA hopes to have its deal with American completed in the coming months, but it remains unclear how the Bush administration will view any antitrust questions raised by that deal.

 
Guest

RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 5:06 pm

DeltaSFO - I've shown your postings to a few people too - they also find them most amusing. Ever heard of something called leverage?

Iahscr - actually, the combined D/E ratio would be just over 1.7 which is very manageable: what DeltaSFO is overlooking is that the assets of the company being acquired accrue to the new merged operation. In fact, a perfect example of David acquiring Goliath would be the Texas International acquisition of Continental!

Whilst the Delta employees may hold the right of first refusal to buy the company (which earlier DeltaSFO had confused with a right of veto - nice to see he has got his facts straight at last) it's not very likely that they would be able to come up with the financing for a buyout - Wall Street wasn't very impressed with the employee-owners of UAL this past summer!!  Insane

Ladevale - NW no longers owns any CO stock: it was repurchased by CO and all CO employees received an 'Independence Day' bonus of US$100 in recognition of this!

As I have said many times before, this is pure conjecture - however the more I hear and the more I read from various sources the more convinced I am that it has merit.
 
DeltaSFO
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RE: DL To Tie Up With NW/CO?

Thu Feb 01, 2001 9:31 pm

DeltaSFO - I've shown your postings to a few people too - they also find them most amusing. Ever heard of something called leverage?

Iahscr - actually, the combined D/E ratio would be just over 1.7 which is very manageable: what DeltaSFO is overlooking is that the assets of the company being acquired accrue to the new merged operation. In fact, a perfect example of David acquiring Goliath would be the Texas International acquisition of Continental!

Whilst the Delta employees may hold the right of first refusal to buy the company (which earlier DeltaSFO had confused with a right of veto - nice to see he has got his facts straight at last) it's not very likely that they would be able to come up with the financing for a buyout - Wall Street wasn't very impressed with the employee-owners of UAL this past summer!!

Ladevale - NW no longers owns any CO stock: it was repurchased by CO and all CO employees received an 'Independence Day' bonus of US$100 in recognition of this!

As I have said many times before, this is pure conjecture - however the more I hear and the more I read from various sources the more convinced I am that it has merit.



LOL.....

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

RE: DL To Tie Up With NW/CO?

Fri Feb 02, 2001 2:16 am

Ceilidh,

CO/NW buying DL and the d/e goes down? What are you smoking?

Remember, all of the DL equity becomes debt for CO/NW, it doesn't remain equity. Your 1.7 is closer to 5 because you have to ADD DL's equity (now debt) and debt to CO/NW's debt.

As I said in another thread, do the research yourself and present the numbers here if you want to be believed.
 
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iahcsr
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RE: DL To Tie Up With NW/CO?

Fri Feb 02, 2001 2:32 am

Ya know, this whole discussion has fried my poor little brain. So I'm going to stop thinking about it and go on a two week vacation. I have every reason to believe CO will still be CO when I get back. If not, well, I'll be like a Borg and adapt.
Working Hard, Flying Right Friendly....
 
Guest

RE: DL To Tie Up With NW/CO?

Fri Feb 02, 2001 2:36 am

Seasonedflyer - ever heard of recapitalisation - which just happens to be what CO is currently getting shareholder approval for....
 
COTPARES
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RE: DL To Tie Up With NW/CO?

Fri Feb 02, 2001 3:02 am

Why buy when we can ally?
CO Doesn't want to buy anyone.
CO doesnt want to be bought by anyone!

repeat as necessary!
The NW alliance which has proven beneficial to both Co and NW is on till 2025.
If you remember your history this resulted because DL and Co could not come to terms with how employees/ labor would be handled.
NW was more flexible and agreeable to an alliance.
Perhaps DL has learned from this... Gordon certainly has!!!
He knows he does't have to rush into any merger. he can sit back and evaluate
and decide the terms of an alliance. An aliance doesnt cost money, An alliance
will not cause labor disputes (at CO anyway). and bigger isnt always better!

No one has mentioned that CO has a small quiet litte Codeshare alliance with
American Eagle in LAX .Commutair was a US airways alliance now allies with CO.

Its completely within thw realm of possibility CO will expound upon that Alliance, or develope others
 
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Jacobcal
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RE: DL To Tie Up With NW/CO?

Fri Feb 02, 2001 8:12 am

I'm a flight attendant for Continental and I was wondering in the event that DL did buy CO how would a work group who is union merge with another who was not? All CO f/a's are union and from what I understand DL f/a's are not, but I may be wrong about that. How would that work?

Thanks,

Jacob  Smile
 
a32
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RE: DL To Tie Up With NW/CO?

Fri Feb 02, 2001 9:16 am

Ceilidh
NWA owns a large chunk of CAL stock. The difference is that this is no longer class A stock with 3 to 1 voting power which previously gave effective corporate control to NWA. The new preffered stock carries no such supermajority. The veto power still exists over any CAL consolidation or buyout by a third party.

JacobCAL

The post merger group continues under their respective contract terms until a certification vote is completed. If the certification ( of the combined group) results in union representation then great for you. If not then the unionization battle will continue. The post merger group will then be employed by the rules of employment at said non unionized carrier.

regards
 
Guest

RE: DL To Tie Up With NW/CO?

Sun Feb 04, 2001 4:19 am

Woops, DeltaSFO and buddies ... it appears that you are wrong (as usual)... Big grin  Big thumbs up

Saturday February 3, 1:19 am Eastern Time

Delta Airlines talking merger with Continental - Post

WASHINGTON, Feb 3 (Reuters) - Delta Air Lines Inc (NYSE AL - news) and Continental Airlines (NYSE:CAL - news) are in very early talks about a possible merger in which Continental would acquire the much larger Delta, the Washington Post reported on Saturday.

The negotiations ``are very informal and they're still in the very early stage,'' a source told the Post.

The newspaper reported that both sides are exploring options should the federal government approve a plan by No. 2 American Airlines (NYSE:AMR - news) to buy financially ailing Trans World Airlines (AMEX:TWA - news) and the proposed merger of No. 1 United Airlines (NYSE:UAL - news) and US Airways

The Continental-Delta talks have focused on the smaller company possibly acquiring the larger one because of a complicating role played by Northwest Airlines (NasdaqNM:NWAC - news) , the Post said.

Northwest has veto power over any takeover of Continental by a third airline. The veto control is the last vestige of Northwest's former controlling ownership of Continental.

But Delta and Continental do not believe the veto power applies if Continental is the acquiring airline. It was not clear who would control the new airline if Continental were to acquire Delta, the Post said.

Neither Delta nor Continental would comment on the talks.

The Continental and Delta talks began last week, the Post reported. The newspaper said Delta Chairman Leo Mullin met with Northwest Chairman Gary Wilson on Jan. 26 to explore Wilson's reaction to a Delta-Continental merger and whether Northwest would try to veto a Delta bid for Continental.

Wilson told Mullin that Northwest was not interested in waiving its veto power under any circumstances, said a Post source with knowledge of the meeting. ``The meeting was to gauge each other's interests. The ball is now in Delta's court,'' the source said.

Sources told the Post that Northwest officials are confident they can block a merger even if Continental initiates the deal.

If efforts to link up with Continental fail, sources said, No. 3 Delta would seek some form of alliance or merger with Northwest, a less preferable option.

A Continental-Delta merger would give the combined airline 26.7 percent of the airline passenger market. A merger of Delta and Northwest would capture 29.3 percent of the market.

American and United would control about 50 percent of the domestic market if their deals went through.
 
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RE: DL To Tie Up With NW/CO?

Sun Feb 04, 2001 4:27 am

Don't believe everything you see and read that is put out by the media. Can you really trust it?

Down with George W.
 
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RE: DL To Tie Up With NW/CO?

Sun Feb 04, 2001 9:43 am

Well, this ties in with a lot of insider info I have received from both CO and Wall Street over the last two months ...  Big thumbs up  Big thumbs up

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