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PanAm_DC10
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US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:03 pm

Transaction Valued at Approximately $8.0 Billion in Cash and Stock

Provides 25 Percent Premium to Current Trading Price of Delta's Prepetition
Unsecured Claims

Merger Expected to Generate $1.65 Billion in Annual Synergies

Consumers Will Have the Advantages of a Larger, Full-Service Provider With the
Cost Structure of a Low-Fare Carrier


TEMPE, Ariz., Nov. 15 /PRNewswire-FirstCall/ -- US Airways Group, Inc.
(NYSE: LCC) announced today that it has made a merger proposal to Delta Air
Lines, Inc. (OTC: DALRQ) under which both companies would combine upon Delta's
emergence from bankruptcy. The proposal would provide approximately
$8.0 billion of value in cash and stock to Delta's unsecured creditors. Delta
creditors would receive $4.0 billion in cash and 78.5 million shares of US
Airways stock with an aggregate value of approximately $4.0 billion based on
the closing price of US Airways' stock as of Nov. 14, 2006.


Just breaking on Bloomberg via http://www.prnewswire.com

Source US Airways http://www.usair.com/awa/content/aboutus/pressroom/pressreleases.aspx

Regards, PanAm_DC10

[EDIT - To provide correct source and detail]

[Edited 2006-11-15 12:08:38]

[Edited 2006-11-15 12:18:27]
Ask the impossible to achieve the best possible
 
EWRandMDW
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:18 pm

I wonder how such a merger would work. Delta is all Boeing, US Airways is going all Airbus. From what I've read here and other places the former HP and US are still trying to integrate into the new US. US and DL both operate hourly shuttle flights between BOS-LGA-DCA; one will have to go. DL has its main hub in ATL and US about 250 miles away in CLT. DL has major intercontinental ops at JFK and US at PHL, about 100 miles away. DL is in BK, US recently exited BK.

The US government didn't allow the former version of US to merge with UA. Why would they allow this to happen?
 
NewSky
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:24 pm

US is one merger hungry airline!
 
deltagator
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:26 pm

Interesting development. We'll see what happens. I wonder what name they would keep operating under?

Quoting EWRandMDW (Reply 1):
Delta is all Boeing, US Airways is going all Airbus.

It could be dealt with over time.

Quoting EWRandMDW (Reply 1):
US and DL both operate hourly shuttle flights between BOS-LGA-DCA; one will have to go.

Why? The market can handle both now so perhaps move DL to on the hour and US on the half hour.

Quoting EWRandMDW (Reply 1):
DL is in BK, US recently exited BK.

And both of those have nothing to do with anything.

Quoting EWRandMDW (Reply 1):
DL has its main hub in ATL and US about 250 miles away in CLT. DL has major intercontinental ops at JFK and US at PHL, about 100 miles away.

Close or reduce CLT as ATL is a far superior facility. Reduce PHL and continue to fix up JFK.
"If you can't delight in the misery of others then you don't deserve to be a college football fan."
 
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chrisnh
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:27 pm

Quoting EWRandMDW (Reply 1):
The US government didn't allow the former version of US to merge with UA. Why would they allow this to happen?

I think because this is one example of 'subtraction by addition.' The industry suffers from overcapacity. They know it; we know it. If the two carriers can come together (addition) and then cut away the redundancy (subtraction) you end up with a healthier industry. If the Boards and stockholders can see it this way, the merger will go through. I can't really see the U.S. government standing too much in the way, because they also realize the need for industry consolidation.

Chris in NH
 
UAL777UK
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:31 pm

Hmm, didn't Grinstein state not so long ago they were going forward on their own!

Anyway, the consolidation now begins possibly in earnest.....question is...who is next??!!
 
tootallsd
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:34 pm

I think the West Coast / Mountain Region has a lot of issues as well:

You have Las Vegas, Phoenix, Los Angeles and Salt Lake City -- all 'relatively close' together. It seems like there would be a lot of room for practical rationalization in the region.

Is this likely to trigger a similar overture to NW by AA?
 
deltagator
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:42 pm

Quoting UAL777UK (Reply 5):
Hmm, didn't Grinstein state not so long ago they were going forward on their own!

Just because US is making the offer doesn't mean DL has to listen or respond.
"If you can't delight in the misery of others then you don't deserve to be a college football fan."
 
charlipr
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:43 pm

WOW!! Definetly did not see this one coming!! I really do not know how this one will turn out if it ever happens. I wish US would just finish fixing its own problems before they start talking merger/purchase of another airline. I would definetely hate seeing the US Airways name go.

Quoting DeltaGator (Reply 3):
Interesting development. We'll see what happens. I wonder what name they would keep operating under?

FOX News just reported that it will stay under the Delta banner!!!
 
PVDFlier
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:45 pm

USAirways Chairman and CEO Doug Parker tells CNBC they would keep the DELTA name over USAirways, because DELTA has a "slightly higher brand recognition."

He says they will also divest one shuttle operation...

[Edited 2006-11-15 12:46:22]
 
UA777300ER
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:46 pm

From yahoo finance:

AP
US Airways Looks to Acquire Delta
Wednesday November 15, 6:35 am ET
US Airway Looking to Buy Delta After It Emerges From Bankruptcy for About $8B in Cash, Stock

TEMPE, Ariz. (AP) -- US Airways Group Inc. said Wednesday it has made an $8 billion cash and stock offer for Delta Airlines Inc. in a deal that would create one of the world's largest airlines.

The offer to buy Delta once the Atlanta-based airline emerges from bankruptcy protection would give Delta's unsecured creditors $4 billion in cash and 78.5 million shares of US Airways stock.

If completed, the airline would operate under the Delta name and serve more than 350 destinations across five continents.

The merger is expected to generate $1.65 billion in annual synergies, said US Airways, which was created by the combination of US Airways after it emerged from bankruptcy and America West.

The carrier expects to realize $935 million from network synergies, predominantly from optimization of the airlines' complementary networks, including rationalization of network overlap. The merger would lead to a 10 percent cut in the combined airlines' capacity and also reduce unprofitable flying and improve the mix of traffic.

Additionally, the carrier sees $710 million in net cost synergies by combining facilities in overlap airports and eliminating redundant systems and overhead.
 
Joost
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:48 pm

Quoting DeltaGator (Reply 3):
Why? The market can handle both now so perhaps move DL to on the hour and US on the half hour.

They want to run the airline under the Delta name, so it would more likley just be a 30-minute shuttle. Good for customers.

However, then they will be the only airline serving the route. In Europe, where similar situations occurred (LH-LX on FRA-ZRH), anti-competition agencies urged the merged entity to give up slots on the route to allow competition. Would the US act the same?

All together, a very interesting bid. If they make it one entity, will they choose for SkyTeam or StarAlliance...
 
EWRandMDW
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:50 pm

Of course, things like fleet makeup and hub locations can be sorted out over time. But I recall back in the 70s DL had a problem with its fleet being divided up among different manufacturers, Douglas, Boeing, Lockheed, and Convair, with something like 10 different models, and they had to streamline or bleed to death from too-high maintenance and training costs, etc. And with all the effort and money spent by both carriers at their other hubs (CVG, SLC, JFK for DL and PHL, PHX, LAS for US) I guess I'd wonder about the jobs and infrastructure that would become redundant overnight. I know its a business, but it seems the bean counters conveniently lose sight of the human element.

Then there is the issue of real or perceived MONOPOLY, such as the BOS-LGA-DCA shuttles. That is still frowned upon here, although politicians have found ways to subvert the laws. Remember AT & T? About 25 years ago it was broken up into the so-called "baby Bells". What's happened since then -- the "New" ATT which is swallowing up the remnants of those "baby Bells" and will soon essentially monopolize communications again.

On a personal note, as my username suggests, my loyalties lie with EWR and I detest JFK and have no use for NYC in general (I lived there for about 12 yrs in 70s and 80s). If the 2 carriers were to merge, I'd much prefer PHL grow and that EWR expand with CO and other carriers.
 
UA777300ER
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:50 pm

Quoting Joost (Reply 11):
All together, a very interesting bid. If they make it one entity, will they choose for SkyTeam or StarAlliance...

I think they would go for SkyTeam. Considering the size of Delta compared to US Airways, it would be the easiest. Also, I don't know if UA would be happy to have a new (big) US Carrier in Star Alliance.
 
IADLHR
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:51 pm

Could also be that, as a result, to preserve competition in the USA, that congress will revisit the issue of raising the limit of foreign ownership of US airlines to either 49% or higher, up from the current 25%

I wont even begin to speculate if DL and US merged if it would end up in Skyteam or Star Alliance. Some how I think it would be Skyteam.

Many, many things have to play out before any serious speculation could begin. Not the least of which what would the debt load be for US after acquiring DL.

My guess is that this will not happen.
 
fewsolarge
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:51 pm

If this moves forward at all, expect counter offers.
 
JMV
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:57 pm

While Delta's management may not be interested in a merger, its creditors may find this of interest...

"Under the terms of the proposed transaction, Delta's creditors would receive $4 billion in cash and 78.5 million shares of US Airways stock with an aggregate value of about $4 billion, based on the Nov. 14 closing price of US Airways' stock. Under the proposal, the companies would combine upon Delta's emergence from bankruptcy, and would operate under Delta's name." WSJ 11/15/2006
Google begins where my brain ends! ©
 
akjetBlue
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 8:57 pm

This isn't set in stone yet, it's just a proposal... remember that folks...

So, just for giggles...


  • What will the combined Airline be called ? Who's name is kept, both very well known
  • Obvious problems with 738 vs the A32x family - but look at AA, they only operate certain aircraft into certain cities lowering MX cost.
  • Long haul - B777 or A330? Which would they keep?
  • With focus cities so close to each other LAS/PHX, CLT/ATL, PHL/JFK/BOS would the new combined airline maybe look to open a new focus city in the Northwest or Midwest? I know the DL has CVG but maybe go in and focus on STL, MCI, SEA or reopen PDX or something...really beef up SLC?
  • Since their would be overlap on routes to Europe maybe they can focus on Asia now since they both are lacking in that area?
  • MCO used to be a hub/focus city for both DL and US - combined together they could operate out of the Airside 4 DL terminal and use MCO as a Latin America spring board much the way AA does with MIA.


This is an interesting idea of merging the two airlines. I wouldn't have thought of it and when I read it online it reminded me of airplane at B6 named "Outta the Blue" as I don't think anyone expected this merger idea between DL and US to pop up.
Save a horse! Ride a Cowboy!
 
walter747
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:02 pm

yey that means they'll get T7's and MD's yey. They'll get a shit load of 767's.

They'll get the asian routes too.



Gooo US airways!!!
Hussel, Hussel, Husel, Grind, Grind, Grind
 
UA777300ER
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:02 pm

Quoting AkjetBlue (Reply 17):
What will the combined Airline be called ? Who's name is kept, both very well known

The articles mention that the Delta name will be kept
 
anstar
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:02 pm

Quoting AkjetBlue (Reply 17):
What will the combined Airline be called ? Who's name is kept, both very well known

I thought the Delta name was being kept
 
akjetBlue
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:05 pm

Didn't US buy the Trump Shuttle giving it the BOS-LGA-DCA run? Some how I was thinking that it was held as a different airline, would US sell that to come up with some cash?

I remember when US was having money issues that was one item that talked about being sold.

Just a thought...they would still have the DL shuttle which I think is now run with the MD-80s...
Save a horse! Ride a Cowboy!
 
walter747
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:05 pm

They wouldn't be able to merge until they come out of Ch. 11.

Would this mkae them a member of SKY or STAR?

Maybe this is the new look their talking about.

When are they gonna come out of Ch.11 anyways?
Hussel, Hussel, Husel, Grind, Grind, Grind
 
deltagator
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:06 pm

Quoting EWRandMDW (Reply 12):
I know its a business, but it seems the bean counters conveniently lose sight of the human element.

I believe that is the number one requirement to be a bean counter.

Quoting EWRandMDW (Reply 12):
the "New" ATT which is swallowing up the remnants of those "baby Bells" and will soon essentially monopolize communications again

As an employee of the new AT&T I have to disagree a little bit here. You'll always be able to get local phone service from another vendor in the area. It's not like us buying BellSouth is going to do anything different for me. Living in ATL I couldn't go and get service from SBC or PacBell if I wanted it. Same goes for LD with the many options available. Anywho...didn't mean to hijack the thread but your local service really doesn't change other than the name.

Quoting IADLHR (Reply 14):
I wont even begin to speculate if DL and US merged if it would end up in Skyteam or Star Alliance. Some how I think it would be Skyteam.

I'd like to see Star Alliance as it can get me almost anywhere in the world I can think of right now.

Quoting IADLHR (Reply 14):
Many, many things have to play out before any serious speculation could begin. Not the least of which what would the debt load be for US after acquiring DL.

And debt load was one of the things that got the airlines into trouble in the first place.
"If you can't delight in the misery of others then you don't deserve to be a college football fan."
 
Air380
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:07 pm

This is what Parker writes on the website and I find this quite amusing:
"Our experience with the America West/US Airways merger in 2005 has taught us a quite a bit."
 
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jetfuel
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:13 pm

I hope it happens.....
Where's the passion gone out of the airline industry? The smell of jetfuel and the romance of taking a flight....
 
COERJ145
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:13 pm

Damn, I was hoping for a NW/US merger, the fleet/hub issues should be interesting if DL/US merges. I wish both carriers the best if DL accepts and they merge.
 
777STL
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:18 pm

Quoting AkjetBlue (Reply 17):
What will the combined Airline be called ? Who's name is kept, both very well known

I'd keep DL's name, DL has an international prescence that US/HP doesn't. And DL has arguably a better name stateside as well.

Quoting AkjetBlue (Reply 17):
Obvious problems with 738 vs the A32x family - but look at AA, they only operate certain aircraft into certain cities lowering MX cost.

I don't think that's as big of a problem as some people make it out to be. I would imagine any merger would also involve a fair bit of contraction of the combined entity to reduce redundancy, perhaps the aircraft could be disposed when this takes place.

Quoting AkjetBlue (Reply 17):
Since their would be overlap on routes to Europe maybe they can focus on Asia now since they both are lacking in that area?

I believe DL would still be the main driver of any expansion into Asia.

But, I suppose we shouldn't be talking about this as if it has already happened. It's just a proposal, how many times a year does x airline issue a proposal to y airline?
PHX based
 
CIDFlyer
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:18 pm

I'm really suprised by this, I would have thought a US/NW link up would be a better idea, seems like too much overlapping of US/DL on the east and west coats, but still a little weak in the middle
 
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N328KF
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:21 pm

Quoting AkjetBlue (Reply 17):
Long haul - B777 or A330? Which would they keep?

There is no way some of the existing Delta routes could be served by the A330. With that said, Delta doesn't have a ton of them.
“In the age of information, ignorance is a choice.”
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777STL
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:23 pm

Quoting N328KF (Reply 29):
There is no way some of the existing Delta routes could be served by the A330. With that said, Delta doesn't have a ton of them.

And DL's future expansion plans necessitate the T7(LR), they wouldn't be going anywhere. I don't imagine the A330s would be going anywhere near term either.
PHX based
 
dtwclipper
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:28 pm

Quoting DeltaGator (Reply 3):
Quoting EWRandMDW (Reply 1):
US and DL both operate hourly shuttle flights between BOS-LGA-DCA; one will have to go.

Why? The market can handle both now so perhaps move DL to on the hour and US on the half hour.

Deltagator is correct, if such a merger were to occur one would go.

When Texas Air (re: Frank Lorenzo) purchased Eastern, they controlled both the New York Air and Eastern Shuttles. They were forced to sell one, I would assume this logic would prevail again in 2006.


Here is how it went down:
Eastern Shuttle---Trump Shuttle--- UsAirways Stuttle

New York Air Shuttle---Pan Am Shuttle----Delta Shuttle
Compare New York Air, the Airline that works for your Business
 
avconsultant
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:28 pm

Quoting UAL777UK (Reply 5):
Hmm, didn't Grinstein state not so long ago they were going forward on their own!

Anyway, the consolidation now begins possibly in earnest.....question is...who is next??!!

Gerry is consistent- he made the same statement to Western & whatever railroad he came from.

Quoting DeltaGator (Reply 7):
Just because US is making the offer doesn't mean DL has to listen or respond.

US would not go to this lengths without talking to DL. We have no idea what DL mgt has committed to creditors. DL turn around has been the most aggressive compared to other bankruptcies. Gerry and team might not have a choice. Something else could be driving this, as in a separate merger.

Quoting Charlipr (Reply 8):
FOX News just reported that it will stay under the Delta banner!!!

Delta to become a Low Cost Carrier.
 
ImperialEagle
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:32 pm

Wow!

This one is very interesting.

Trying to rationalize the fleet and parts stores would be a challange.

The local media is really "buzzing" here in ATL this morning, so it will be interesting to hear what Grinstein will have to say.
"If everything seems under control, you're just not going fast enough!"
 
TL8490
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:33 pm

Does anyone know the next step??

I would imagine the credit commitees would look at the value of the merger versus the projected value of Delta when they emerge...But have no idea ....
 
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ERJ170
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:34 pm

Contemplating this merger.. It would be hard as Hell to work out.. there are way too many differences in the companies to make it work. And if US/HP thought their current employee mergings were difficult, then add DL to the mix.. OMG..

I predict a no-go.. these two do not synergize as well as HP/US did..

US needs to look somewhere else.. like in the Midwest.. at the red apple-bomb.. and synergize NW.. their narrowbody fleet would be the same.. and they would be getting some 787 early in the game and can get out of their 350 deal without much problem... They would also get more 330 and have slots to Japan AND China in one fail swoop without having to go through FAA/DOT..

Their hub situation would basically pan itself out.. PHX, CLT, PHL, DTW with LARGE Secondary hubs at LAS, MSP, NRT, AMS...

MEM, PIT, DCA, LGA would remain focus cities.. but MEM would be GREATLY reduced..

DL needs to keep it real and go for it alone. They are working on a decent turn-around and much like the merged US/HP.. I believe they will make it.
Aiming High and going far..
 
PapaNovember
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:41 pm

Does anyone else think that $8 billion sounds like a pittance for Delta Airlines? How much is Delta's fleet worth? Wouldn't their B777's be worth almost two billion themselves? And how many 767's are there??
 
UA777300ER
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:43 pm

Quoting PapaNovember (Reply 36):
Does anyone else think that $8 billion sounds like a pittance for Delta Airlines? How much is Delta's fleet worth? Wouldn't their B777's be worth almost two billion themselves? And how many 767's are there??

You also have to take into account Delta's debt burden and the fact that they are currently making a loss (on an annual basis at least, I don't know how there finances were the last quarter).
 
deltagator
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:43 pm

Quoting Dtwclipper (Reply 31):
Deltagator is correct, if such a merger were to occur one would go.

I was saying they wouldn't need to get rid of one unless they wanted to do so. If both carriers operate on the hour and do good on the route then why reduce capacity? Let the DL portion run flights every hour on the hour and the US portion run flights every hour on the half hour. I'm sure someone though will make a fuss about it being a monopoly though and part of it will go.
"If you can't delight in the misery of others then you don't deserve to be a college football fan."
 
dtwclipper
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:47 pm

Quoting DeltaGator (Reply 38):
I was saying they wouldn't need to get rid of one unless they wanted to do so. If both carriers operate on the hour and do good on the route then why reduce capacity? Let the DL portion run flights every hour on the hour and the US portion run flights every hour on the half hour. I'm sure someone though will make a fuss about it being a monopoly though and part of it will go.

I'm sorry, qouted the wrong person.....

I still don't think they would be allowed to operate both...historicly speaking.
Compare New York Air, the Airline that works for your Business
 
dartland
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:50 pm

Quoting ERJ170 (Reply 35):

I predict a no-go.. these two do not synergize as well as HP/US did..

Doesn't necessarily matter. As someone said above -- if the creditors like it, you never know!

What I really want to know more than anything is who would be next! If DL so much as suggests they are seriously entertaining the offer -- it will get some of the others VERY ancy to do the same (and by some of the others, I mean UA and NW. I don't think AA or CO is interested in anything -- but CO could certainly be the subject of a takeover bid.)

Overall though, I can't disagree that DL at first seems like a bad fit for US. HP brings a lot to the picture for DL, but the US/DL systems are very redundant. I imagine Parker's betting that combining redundant systems is the way to go where you can consolidate market share and cut down on capacity. It's a different tactic than maximizing route structures which we usually talk about (like a UA/CO merger), but potentially very sound logic.
 
Indy
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:51 pm

A CNN story says this...

"US Airways on Wednesday is making an apparently hostile $8 billion offer for larger competitor Delta Air Lines, under which the companies would combine after Delta's emergence from bankruptcy."

Note the term "hostile". Is there any significance to this?

http://money.cnn.com/2006/11/15/news...us_airways_delta/index.htm?cnn=yes
IND to RDU to OKC in 18 months. This is what my life has become.
 
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falstaff
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 9:57 pm

Quoting Tootallsd (Reply 6):
Is this likely to trigger a similar overture to NW by AA?

That way AA can screw over all the NWA employees the way they did to the TWA people. According to an article I read in Airways Classics about TWA; AA's unions didn't give much seniority to TWA people because TWA had been bankrupt and therefore the employees didn't have much of a future anyway. I would hate for that to happen again.

Quoting DeltaGator (Reply 23):
I believe that is the number one requirement to be a bean counter

Mergers usually help the bottom line, but end up screwing the employees and usually a customer or two. Not all business mergers work out for the best either.

Quoting EWRandMDW (Reply 1):
DL is in BK, US recently exited BK.

Nothing like to BK companies merging. Penn Central ring a bell. Not all transportation mergers are successful.
My mug slaketh over on Falstaff N503
 
Mainland
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RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 10:02 pm

Quoting Indy (Reply 41):
Note the term "hostile". Is there any significance to this?

Hostile normally means they have not sought the approval of the target (Delta's) board of directors before making the offer. I'll be looking for the SEC filings today for more information.
You don't need a passport to know what state you're in...
 
bobnwa
Posts: 4514
Joined: Fri Dec 22, 2000 12:10 am

RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 10:02 pm

Quoting PapaNovember (Reply 36):
Does anyone else think that $8 billion sounds like a pittance for Delta Airlines? How much is Delta's fleet worth? Wouldn't their B777's be worth almost two billion themselves? And how many 767's are there??

Delta's fleet might be worth a lot but it is not owned by Delta. How many of its aircraft do you think DL owns outright? By this I mean no lease and no loan.
 
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STT757
Posts: 14221
Joined: Tue Mar 28, 2000 1:14 am

RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 10:03 pm

Wow, big news.

The thing that jumps out at me is they have already secured $7.2 Billion from Citigroup for the merger, which gives this proposal total legitimacy.

There would be a couple of issues involving anti-trust rules to get around.

1.)nLaguardia slots, gates and the Shuttle of one of the carriers wouldnhave to be sold off. They are not going to be allowed to have twonterminals, two shuttles and a boat load of landing and take off slotsnat the Country's premier business airport.

2.) Northeastngateway, they will most likely move almost all their Trans-Atlanticnoperations from JFK to PHL for two reasons. Lack of adequate facilities at JFK, and competition from AA, B6, CO.

3.)nSoutheast hubs, I doubt they would operate two major hubs in thenSoutheast so close to each other. They could sell the Charlotte hub tona carrier like CO or AA, the best scenario would be if they could makena deal with FL to move the majority of their Southeast operations fromnAtlanta to Charlotte.

4.) Mid-West hub, Cincinnati out Pittsburgh in (IMO).

5.) West Coast hub, Salt Lake City out Phoenix and to a lesser extent Las Vegas in.

Will be watching.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
warreng24
Posts: 575
Joined: Fri Nov 18, 2005 9:38 am

RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 10:03 pm

The question is now....

Which alliance would the new HP/US/DL be in?

Star Alliance?

SkyTeam?


But, can you imagine how nice the 767-400ER will look in the new US livery?
 
flyboyaz
Posts: 2077
Joined: Sat Sep 13, 2003 11:32 am

RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 10:04 pm

Ok this is a shocker. We have heard NOTHING about this at work....can't wait to see the reaction when I get in today. I literally almost pewked when I read the story.....

I would think they would at least wait until after we have our current merger complete...then have to start all over again. It is going to make a lot of people feel very displaced. Of course US did that with PSA and Piedmont...look at the problems that caused. Now I believe it wouldn't be so bad...I think the management teams are better prepared than back then.
Catch a ride on a smile!
 
UALPHLCS
Posts: 3232
Joined: Thu Jun 28, 2001 5:50 am

RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 10:06 pm

Quoting EWRandMDW (Reply 1):
I wonder how such a merger would work.

I agree this is going to get a really hard look by regulators.

Besides I don't see the route structure fit. As has been pointed out PHL-JFK, CLT-ATL, PHX-LAS-SLC, PIT-CVG. Delta's routes mirror US/HP's routes.

In my opinion if your going to buy someone buy a company that compliments your route network not duplicates it.
A little less Hooah, and a little more Dooah.
 
FlyPNS1
Posts: 5518
Joined: Wed Dec 01, 1999 7:12 am

RE: US Airways Proposes Merger With Delta

Wed Nov 15, 2006 10:14 pm

The odds of this merger happening are extremely slim.

First, DL's management has said repeatedly that they aren't interested in merging. The only way this will likely be successful is if it is a hostile takeover.

Second, this merger really has no network benefits as there is significant overlap between the two airlines domestic hub. There is really no compelling case for the DOT/DOJ to approve this merger.

Third, the merger would likely be a disaster as the employee groups wouldn't combine well. The fleets are completely disparate and the overall corporate culture is quite different.

The only thing I see feeding this merger is Doug Parker's mega ego.

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