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kc135topboom
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Should WN Buy DL?

Sat Sep 03, 2005 6:53 pm

I really don't think WN would want to, or even can buy an airline as big as DL. But, if they were capable of doing that, should they?
 
Udo
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RE: Should WN Buy DL?

Sat Sep 03, 2005 7:00 pm

Why should they trash their successful business model by buying a bankrupt carrier with an inefficient fleet (in comparison) which mostly focuses on both completely different markets and customers?  eyebrow 


Regards
Udo
Me & You & a Plane Named Blue...
 
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kc135topboom
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RE: Should WN Buy DL?

Sat Sep 03, 2005 7:04 pm

Well, they can get one of the better legasy carriers in the US. They get international destinations, and they get Song, as a kind of east coast and long range LCC.

After all WN once bought into another bankrupt airline, TZ, so they could lock up MDW, and get some of the B-737-800s.
 
DABTH
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RE: Should WN Buy DL?

Sat Sep 03, 2005 7:05 pm

I can not see WN overtaking DL. Dl is just too big and an international airline. WN is a LCC and has a whole different concept. What should WN do with all the new aircraft and routes? Start LC on international flights? Never happen. Just can see these two mix...

Did I miss something? Have there been some rumors about this?

regards
 
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kc135topboom
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RE: Should WN Buy DL?

Sat Sep 03, 2005 7:18 pm

Quoting DABTH (Reply 3):
Did I miss something? Have there been some rumors about this?

No. There have been no rumors of such a sale.

I was just wondering about it, and what DL would look like, if merged into WN. Do you think they would spin off Song, or keep it?

Song and the International routes seem to be the only things keeping DL flying right now.

But, then again, DL is one of the airlines providing B-737-800s, crews, fuel, and maintenance to the MSY evacuations, at no cost.
 
DABTH
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RE: Should WN Buy DL?

Sat Sep 03, 2005 7:23 pm

The more I think about this the more ridiculous this seems to me.
No way they`d ever merged.
Maybe WN could take over parts from DL such as Song which fits into its concept. But as you already said this is one of the few profitable parts of DL they won`t give it away in my eyes.

regards
 
FlyGuyClt
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RE: Should WN Buy DL?

Sat Sep 03, 2005 7:37 pm

SWA has long lived by this .

Keep
It
Simple
Stupid.


Now, does a merger or buyout with DL fit that mold?


Safe Flying  Smile
Florida Express, Braniff II and ......
 
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garpd
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RE: Should WN Buy DL?

Sat Sep 03, 2005 7:39 pm

Quoting KC135TopBoom (Thread starter):
I really don't think WN would want to, or even can buy an airline as big as DL

I can see it now. A 777 in the canyon blue livery landing at Gatwick! lol
I think we have more chance of the sun going supernova than we do seeing WN buy any of the US legacy carriers.

Infact... I'm intrigued... I'm gonna draw a WN 777 to see what it looks like.
arpdesign.wordpress.com
 
N587NK
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RE: Should WN Buy DL?

Sat Sep 03, 2005 8:04 pm

Quoting FlyGuyClt (Reply 6):
SWA has long lived by this .

Keep
It
Simple
Stupid.


Now, does a merger or buyout with DL fit that mold?


Safe Flying

FlyguyCLT,

I feel for you all at NWA, you guys have a long battle ahead of you there. I've seen/heard the proposal from your union and the company. BS if I ever have to say it 57% of F/A jobs being cut and a 16 year F/A going from 40K to 20K, its just unacceptable. I was hired by NW in the sumer of '01 well before 9/11, my class was cancelled then, I worked for another airline then that I hated "":cough cough john tague...J George Mikelsons..COUGH COUGH"

i'm at NK now, just hope you all there stand up for the rest of the industry!!!!!!!!!!!!!!1
 
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kc135topboom
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RE: Should WN Buy DL?

Sat Sep 03, 2005 9:13 pm

Quoting GARPD (Reply 7):
I can see it now. A 777 in the canyon blue livery landing at Gatwick! lol

How about a canyon blue B-767-400ER in Honolulu?

Quoting N587NK (Reply 8):
I feel for you all at NWA, you guys have a long battle ahead of you there. I've seen/heard the proposal from your union and the company. BS if I ever have to say it 57% of F/A jobs being cut and a 16 year F/A going from 40K to 20K, its just unacceptable. I was hired by NW in the sumer of '01 well before 9/11, my class was cancelled then, I worked for another airline then that I hated "":cough cough john tague...J George Mikelsons..COUGH COUGH"

Maybe start a new topic?

Quoting N587NK (Reply 8):
i'm at NK now, just hope you all there stand up for the rest of the industry!!!!!!!!!!!!!!1

Welcome to DFW!!!! Again off topic.
 
FlyGuyClt
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RE: Should WN Buy DL?

Sat Sep 03, 2005 9:33 pm

Quoting N587NK (Reply 8):

Thanks man...But. I have been around 19 years, 4 airlines, 3 strikes, 1 merger, 2 Chapter 11's. I am DONE ! ! ! If this does not work out. I have two jobs already lined up. I started downsizing my life after 9/11. I am all for a:

FAIR EQUITABLE and BALANCED giveback. (note keywords)

Safe Flying  Smile

PS. Who said I worked for them? I never did ?  Smile
Florida Express, Braniff II and ......
 
727LOVER
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RE: Should WN Buy DL?

Sat Sep 03, 2005 9:45 pm

Quoting KC135TopBoom (Reply 2):
Well, they can get one of the better legasy carriers in the US.

If they are one of the BETTER carriers...why are they almost bankrupt??????
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
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lindy field
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RE: Should WN Buy DL?

Sat Sep 03, 2005 11:12 pm

If they wanted to buy any part of Delta, I'd say they could buy the 767-300ER fleet and the hub in JFK to start an international division (to be run as a separate airline) offering the first real LCC trans-atlantic service.

I can't imagine that Southwest would want much else from Delta aside from slots.
 
sphealey
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RE: Should WN Buy DL?

Sun Sep 04, 2005 12:01 am

> I can see it now. A 777 in the canyon blue
> livery landing at Gatwick! lol

I wonder though if WN looks from time to time at setting up a subsidiary to provide a US east coast - London shuttle. Say BWI-LGW on the People's Express model. One class, minimal food, moderate fixed price. Probably partnered with one of the European LCCs. It would give them an outlet for their frequent filers (say 40 flights per freebie rather than than the standard amount) and feed their US routes.

sPh
 
BostonGuy
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RE: Should WN Buy DL?

Sun Sep 04, 2005 12:05 am

Quoting Lindy Field (Reply 12):
...offering the first real LCC trans-atlantic service.

The first real LCC trans-atlantic service was Laker Airways which commenced LGW-JFK flights in 1977.

Laker Airways (click on "History")

"Freddie Laker toasts launch of low-cost Skytrain
Sussex, England, September 26, 1977

At 5pm today, dead on time, the Laker Airways DC-10 Eastern Belle left London's Gatwick airport for New York. It marked the successful conclusion of a six-year battle by owner Freddie Laker to offer cheap fares on long-distance routes, in the face of opposition from his giant rivals.

Known as Skytrain, the no-frills Laker service costs passengers only £59 ($102) for a one-way ticket, or about $236 for a round-trip, compared with $626 for a normal economy ticket offered by Laker's rivals - prior to today. Now, having lost the fight to stop Laker despite years of court action, the major, scheduled airlines, are suddenly offering their own cut-price fares, which are just a few dollars higher than Laker's. Laker's tickets are sold on a first-come, first-served basis on the day of departure only. On this first service, hundreds of passengers queued for up to 48 hours to buy one of the 345 seats available. The return flight from New York tomorrow is believed to be fully booked. It remains to be seen if Laker can fill his aircraft for each flight.

Freddie Laker has always been the champion of the less affluent traveller, who would probably not be able to fly at all except for lower fares. He may be hated by the big airlines, but he is loved by his passengers, who see him as a champion of the underdog."
 
1MillionFlyer
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RE: Should WN Buy DL?

Sun Sep 04, 2005 12:21 am

The fact that all the bankrupt airlines grew and merged too quickly for the stock market and managed to ruin their business plan keeps getting lost.

WN should do what they are doing, it has worked for all these years, why change?

A.net is great for these kind of crazy threads.
Golf Foxtrot you are cleared for departure
 
N200WN
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RE: Should WN Buy DL?

Sun Sep 04, 2005 12:57 am

Quoting KC135TopBoom (Reply 2):
After all WN once bought into another bankrupt airline, TZ, so they could lock up MDW, and get some of the B-737-800s.

Wow...I work for WN and was completely unaware of this. Maybe I need to read the company website more often.

As for Southwest buying Delta...it is interesting to think about but we all know it will never happen. However, I think it is in the realm of possibility and a much better fit for Southwest and Airtran to hook up. Airtran's -700's with the coming winglets would fit right in, and the 717's are manageable. ATL would fill a big hole in WN's route map.
 
FlewGSW
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RE: Should WN Buy DL?

Sun Sep 04, 2005 1:12 am

The only part of DL the WN should buy is Comair, so they can use those RJs with <=56 seats to fly from DAL to any airport outside the WA restrictions.
 
ejmmsu
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RE: Should WN Buy DL?

Sun Sep 04, 2005 2:27 am

WN buying DL right now would be like the USA invading the Soviet Union in the mid 80's. Let Delta die under the pressure of its own weight, then WN can take advantage of the opening.
"If the facts do not conform to the theory, they will have to be disposed of"
 
luv2fly
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RE: Should WN Buy DL?

Sun Sep 04, 2005 2:38 am

Quoting Ejmmsu (Reply 18):
WN buying DL right now would be like the USA invading the Soviet Union in the mid 80's. Let Delta die under the pressure of its own weight, then WN can take advantage of the opening.

Finally the voice of reason. Though in honesty what will happen is several years of Bankruptcy protection just like UA!
You can cut the irony with a knife
 
777STL
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RE: Should WN Buy DL?

Sun Sep 04, 2005 2:38 am

Quoting KC135TopBoom (Reply 2):
After all WN once bought into another bankrupt airline, TZ, so they could lock up MDW, and get some of the B-737-800s.

WN didn't actually take possession of any of those 738s. The way I understood it, WN shunned the 738 because it required an additional F/A and therefore went against fleet commonality.

The buy-in was more for real estate/gate space than for anything else. WN now has a strangle hold over MDW.
PHX based
 
jetdeltamsy
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RE: Should WN Buy DL?

Sun Sep 04, 2005 5:36 am

If Southwest were to purchase Delta, i'm sure it would be only for the assets. They'd sell equipment and real estate. There would never be a merger of the two.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
comorin
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RE: Should WN Buy DL?

Sun Sep 04, 2005 5:45 am

Here's a simplistic viewpoint on why WN won't buy Delta:

1. Delta's market cap on Friday was a mere $158M USD. For this WN could buy an airline with 1000+ planes, 61.950 employees, facilities, routes and so on - not a bad buy. The could also spend the $158M on a single B747 as a baseline!

2. They would buying assets of $21.8B, and liabilities of $27.3B. So the intangible value of DL would need to be $5.5B (today or present value) for this purchase to make sense.

3. The capital obligations of Delta are about $4B/year, which would have to be serviced from WN's combined operating income or 'rolled' over in a financing transaction. Also, most of Delta's debt is fully collateralized, so there are no free assets to convert to cash.

4. In its best years, DL earned about 6+% on assets, which would be $1.4B on 04 assets. This year, DL lost about $3B (normalized) on revenues of $15B. DL would need a 25% increase in revenue to breakeven, as other costs have been already cut to the bone (my assumption).

5. To get to a 25% revenue increase, given a 92% breakeven load factor and industry overcapacity in 04, would imply a scenario where either a lot of capacity goes off the market, or there is a huge spike in economic demand. The probability of this happening is too low for a rational investor to bet on.

6. The only alternative for Delta (IMHO!) would be to have its debt restructured, with minimal principal, interest and lease payments for 5 years. Creditors get 100 ownership of Delta and keep it a going concern. This is what will happen in bankruptcy proceedings anyway.

So I don't think it makes sense for anybody but the lenders (or a distressed debt private equity firm) to take a position in DL. If they feel that they can turn around the airline and sell it for a profit later, it would make sense. If not, the assets (like Song) will get sold to cover senior lenders.

The markets have spoken. At current equity prices, DL should file this weekend (Ch XI, not VII), unless they are waiting for Gandalf to show up...


Caveat: This is a layman's analysis, e&oe - comments welcome
 
gearup
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RE: Should WN Buy DL?

Sun Sep 04, 2005 6:18 am

Just a quick question, is WN's workforce unionized? If not, can you imagine how DL's unions would react in the unlikely event such a merger were to occur?

GU Big grin
I have no memory of this place.
 
cslusarc
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RE: Should WN Buy DL?

Sun Sep 04, 2005 6:49 am

I'm glad I'm not the one who asked this question.

To me it doesn't make sense for ANYONE to buy DL in its current state BEFORE it FILES for Chapter 11. Anyways I think that WN is the wrong "life partner" for DL. After DL files the only assets I think that WN might be interested in are DL's 757s and non-ER 763s. I think that the 757s will give WN the advantage to help it lower its CASM. (WN doesn't need any long haul widebody aircraft.) [Note: DL's MD80s/MD90s are not compatable with this plan, DL's 732s/733s/733Gs/762s are old, and the 738s are not perfectly sized for WN's all economy operation. Forget about Commair -- the CRJ100/200s will be "exported" to the rapidly growing markets in Asia.]
--cslusarc from YWG
 
peachair
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RE: Should WN Buy DL?

Sun Sep 04, 2005 7:18 am

Quoting Gearup (Reply 23):
Just a quick question, is WN's workforce unionized? If not, can you imagine how DL's unions would react in the unlikely event such a merger were to occur?

Gearup,

What were you thinking? Delta has one of the largest non-union workforces in the entire airline industry. I think even WN has some sort of union representation on the ramp and DL does not. I think you've got it backwards.
 
Amy
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RE: Should WN Buy DL?

Sun Sep 04, 2005 7:33 am

I think the REAL question is will Sri Lankan buy BA?

 Yeah sure
A340-300 - slow, but awesome!
 
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garpd
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RE: Should WN Buy DL?

Sun Sep 04, 2005 7:38 am

Quoting Sphealey (Reply 13):

I wonder though if WN looks from time to time at setting up a subsidiary to provide a US east coast - London shuttle. Say BWI-LGW on the People's Express model. One class, minimal food, moderate fixed price. Probably partnered with one of the European LCCs. It would give them an outlet for their frequent filers (say 40 flights per freebie rather than than the standard amount) and feed their US routes.

I can't see that working. It didn't for People Express.

Besides, the K.I.S.S. guideline has worked so well for WN. Ain't no sense in ditching it now.
arpdesign.wordpress.com
 
Guest

RE: Should WN Buy DL?

Sun Sep 04, 2005 8:53 am

Am I the only one that can't believe some of you are actually discussing this?

First Delta should sell their 764's to Air Canada...

Now Southwest should buy Delta...

I got one: "Should Delta order the TU204?"

I mean, seriously, where do you people come up with this stuff?

B

[Edited 2005-09-04 01:59:49]
 
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kc135topboom
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RE: Should WN Buy DL?

Sun Sep 04, 2005 8:57 am

Quoting N200WN (Reply 16):
However, I think it is in the realm of possibility and a much better fit for Southwest and Airtran to hook up. Airtran's -700's with the coming winglets would fit right in, and the 717's are manageable. ATL would fill a big hole in WN's route map.

Now there is an idea. Will their combined routes put serious pressure on B6?

Quoting Comorin (Reply 22):
The markets have spoken. At current equity prices, DL should file this weekend (Ch XI, not VII), unless they are waiting for Gandalf to show up...

Then why did DL commit to the MSY evacuations this weekend?

Quoting Amy (Reply 26):
I think the REAL question is will Sri Lankan buy BA?


There is a real LOL.  Wink
 
cainanuk
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RE: Should WN Buy DL?

Sun Sep 04, 2005 9:04 am

In a word.....

No.
Cainan Cornelius
 
777STL
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RE: Should WN Buy DL?

Sun Sep 04, 2005 9:05 am

Quoting NonRevKing (Reply 28):
Am I the only one that can't believe some of you are actually discussing this?


I think it's idiotic, though I try to keep my opinions to myself after I was banned for voicing a dissenting opinion.

Quote:
Just a quick question, is WN's workforce unionized?

It's a common misconception for people to think WN is not unionized. Though in reality, WN is one of the most unionized airlines out there right now.
PHX based
 
gearup
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RE: Should WN Buy DL?

Sun Sep 04, 2005 9:31 am

Quoting Peachair (Reply 25):
What were you thinking? Delta has one of the largest non-union workforces in the entire airline industry. I think even WN has some sort of union representation on the ramp and DL does not. I think you've got it backwards.

Yes, I do have it backwards, you learn something new every day, thanks Peachair!

GU
I have no memory of this place.
 
flybyguy
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RE: Should WN Buy DL?

Sun Sep 04, 2005 10:25 am

Quoting Ejmmsu (Reply 18):
WN buying DL right now would be like the USA invading the Soviet Union in the mid 80's. Let Delta die under the pressure of its own weight, then WN can take advantage of the opening.



Quoting Comorin (Reply 22):
Here's a simplistic viewpoint on why WN won't buy Delta:

1. Delta's market cap on Friday was a mere $158M USD. For this WN could buy an airline with 1000+ planes, 61.950 employees, facilities, routes and so on - not a bad buy. The could also spend the $158M on a single B747 as a baseline!

2. They would buying assets of $21.8B, and liabilities of $27.3B. So the intangible value of DL would need to be $5.5B (today or present value) for this purchase to make sense.

3. The capital obligations of Delta are about $4B/year, which would have to be serviced from WN's combined operating income or 'rolled' over in a financing transaction. Also, most of Delta's debt is fully collateralized, so there are no free assets to convert to cash.

4. In its best years, DL earned about 6+% on assets, which would be $1.4B on 04 assets. This year, DL lost about $3B (normalized) on revenues of $15B. DL would need a 25% increase in revenue to breakeven, as other costs have been already cut to the bone (my assumption).

5. To get to a 25% revenue increase, given a 92% breakeven load factor and industry overcapacity in 04, would imply a scenario where either a lot of capacity goes off the market, or there is a huge spike in economic demand. The probability of this happening is too low for a rational investor to bet on.

6. The only alternative for Delta (IMHO!) would be to have its debt restructured, with minimal principal, interest and lease payments for 5 years. Creditors get 100 ownership of Delta and keep it a going concern. This is what will happen in bankruptcy proceedings anyway.

So I don't think it makes sense for anybody but the lenders (or a distressed debt private equity firm) to take a position in DL. If they feel that they can turn around the airline and sell it for a profit later, it would make sense. If not, the assets (like Song) will get sold to cover senior lenders.

The markets have spoken. At current equity prices, DL should file this weekend (Ch XI, not VII), unless they are waiting for Gandalf to show up...

I want to agree with Ejmmsu, but I have always fancied Southwest simply buying out a large competitor and just liquidating for cash and taking similar assets for it's own use. However, after Comorin's interesting post it seems that Delta would have very few assets that aren't collateral. However, as Cslusarc suggests it would be wiser to buy an airline like Delta once they file Chapter 11 so that all of their remaining assets are no longer collateral to creditors, then Southwest can buy Delta and liquidate it entirely. By doing this, they completely eliminate a major competitor in the southeast and if they play their cards right they can make a profit or break even from selling all of Delta's owned assets. Then I guess they can move into Atlanta or forge an alliance with AirTran to dominate the southeastern market.

I feel for an airline like Southwest there's no need for fancy international routes or airplanes that aren't 737s. All they need is to bury their competitors and keep it relatively simple, quick and hopefully cost effective.

But something tells me what I suggested isn't particularly legal.
"Are you a pretender... or a thoroughbred?!" - Professor Matt Miller
 
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coronado
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RE: Should WN Buy DL?

Sun Sep 04, 2005 11:28 am

What assets? All a/c, trucks, carts, tugs, everything is used as collateral for their debt. Bankruptcy does not discharge this kind of debt. The lender has full rights to repossess those assets. Chapter 11 does not change an asset from being collateralized to being non colleteralized.

Do you think a consumer who files for bankruptcy gets to keep his or her car if there is still an auto loan on it (i.e. a collateralized loan) and fails to continue making payments on it? Of course not miss a payment and the car is repossessed. Sure the consumer can usually get the judge to discharge unsecured debt such as credit cards, but tell me in the case of Delta (or NW or for that matter UAL, AA, CO, etc) how much unsecured debt to any of them have? The only way they have been able to borrow money in the last several years has been by pledging all assets as collateral including in the case of the international carriers any internatioal route authorities they hold. I can tell you that the american airlines serving London LHR certainly have those rights pledged to their bankers as collateral.

Why the heck would WN have any interest in taking over these debt laden carriers even if they could buy out 100% of the stock with their petty cash account!

The reason a WN can continue to dictate the fare environment in much of the country is not just their fuel hedging and efficient fleet management and high productivity. If this weren't enough of an edge consider the following: DL has to dedicate well over 10% of its gross revenues to just paying interest on their horrible debt load. This will not change following bankruptcy unless the lenders agree to slash their interest rates A WN at most uses less than 3% of its revenues to cover interest costs. This spread in interest costs means that DL will alwayhs be in catch up mode. Perhaps bankruptcy can lead to negotiations with the secured lenders to lower their interest rates but at some point if the only way to make DL viable is to slash interest rates so massively, the lenders make a business decision and simply reposses the asset if they think they can place the asset elsewhere at a better return.
The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
 
comorin
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RE: Should WN Buy DL?

Sun Sep 04, 2005 2:30 pm

Quoting KC135TopBoom (Reply 29):
Then why did DL commit to the MSY evacuations this weekend?

Why not? DL management knows it's over, so the least they can do is use the airline for compassionate purposes. The battle's over, the need to save the last penny no longer exists, so it must feel good to at least be helping people in dire need.

Quoting Flybyguy (Reply 33):
I feel for an airline like Southwest there's no need for fancy international routes or airplanes that aren't 737s. All they need is to bury their competitors and keep it relatively simple, quick and hopefully cost effective.

Exactly. It never made sense for WN to look at Delta - so contrary to their core values.

Quoting Coronado (Reply 34):
What assets? All a/c, trucks, carts, tugs, everything is used as collateral for their debt. Bankruptcy does not discharge this kind of debt. The lender has full rights to repossess those assets. Chapter 11 does not change an asset from being collateralized to being non colleteralized.

Thanks for the clarification. Usually the senior lender files a UCC lien against the corporation, so I suppose that would exclude loans by other lenders that are tied to specific collateral.


As for Srilankan buying BA, a few more uncatered flights from LHR ...
 
Bluewave 707
Posts: 2794
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RE: Should WN Buy DL?

Sun Sep 04, 2005 2:41 pm

Uhh ... how should I say this ... NO!

It goes against the WN business model like earlier mentioned. They would go from profits to debts in a flash, because they'd have to assume some of DL's debts.
"The best use of your life will be to so live your life, that the use of your life will outlive your life" -- D Severn
 
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garpd
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RE: Should WN Buy DL?

Sun Sep 04, 2005 7:21 pm

Well here's what a DL 777 would look like is WN bought them


Modified Airliner Photos:
Click here for bigger photo!
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kc135topboom
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RE: Should WN Buy DL?

Sun Sep 04, 2005 7:23 pm

Quoting Coronado (Reply 34):
What assets? All a/c, trucks, carts, tugs, everything is used as collateral for their debt. Bankruptcy does not discharge this kind of debt. The lender has full rights to repossess those assets.

That isn't what happened in the UA bankruptcy. The BK Judge let UA keep their leased B-767-300ERs, but the creditors finally won that battle on appeal.
 
cloudy
Posts: 1613
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RE: Should WN Buy DL?

Mon Sep 05, 2005 3:35 am

Quoting Peachair (Reply 25):
Gearup,

What were you thinking? Delta has one of the largest non-union workforces in the entire airline industry. I think even WN has some sort of union representation on the ramp and DL does not. I think you've got it backwards

For the umpteenth time...

Southwest is one of the most unionized airlines in the US. Almost every Southwest employee is represented by a union.

Delta is one of the LEAST unionized airlines in the US. Last time I checked, only the pilots are unionized.

This is one of the most common misconceptions about Southwest versus its competitors. The mainstream press nearly always gets it wrong on this one, even though a simple check on yahoo finance, etc. could get the right answer in a few minutes.

Southwest buying Airtran is REMOTELY plausible. Southwest buying Delta will never happen. Yes, one should never say never. But it is about as improbable as say, Donald Trump becoming a monk or Supreme Court Justice Scalia joining the ACLU. Its so unlikely that its not really worth talking about.
 
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coronado
Posts: 1278
Joined: Sat Jun 26, 1999 9:42 am

RE: Should WN Buy DL?

Wed Sep 07, 2005 1:42 pm

KC135TopBoom

Regarding lease rates--the airline's management can propose lower lease rates and ask the judge or mediators to try and convince the lessors to go along, but the bottom line is that while a judge may try to twist and convince the leasing companies to go along, that is all they can do-try to convince. If the leasing companies don't want to accept a lower rate they don't have to --can take the a/c back --heck as a lease the title to the a/c is in the name of the leasing company. The main difference to a secured (i.e. collateralized) loan is that the lender (i.e. banker) has to go thru a bit more proof that the loan was properly extended and that the lien was properly filed securing the collateral. Once that is documented they can take the asset back if payments are not made in full.

If you have a car and you have a car loan I suggest you send let 's say 70% of your regular payment amount because your fuel bills have increased. They may not reposses your car in 3 months. They will certainly reposses your car in 4 months whether or not you have filed for bankruptcy. They only way they will go along is if they think getting 70% of the contractual payment is a better deal for the bankers than taking back the car and trying to resell it. A.C are no different other than a few extra zeros added on the the valuations.!
The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
 
Lono
Posts: 1136
Joined: Sun Apr 04, 2004 5:47 pm

RE: Should WN Buy DL?

Wed Sep 07, 2005 1:49 pm

WN has been very successful following their business plan... I am sure they have a plan when DL scales back in B/R... this is getting very interesting.. the ""new" LCC's will be hurting soon.... WN will have nothing to do with a failed 70's business plan that is DL...
Wally Bird Ruled the Skys!

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