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airportplan
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Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 5:54 pm

According to Crains Chicago Business, a hedge fund that’s a large shareholder in Delta Air Lines and United Airlines is urging a merger between the two.

http://www.chicagobusiness.com/cgi-bin/news.pl?id=27128

[Edited 2007-11-14 09:55:16]
 
pilotboi
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RE: Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 6:00 pm

This is getting rediculous! Why doesn't every airline just merge into one? That would eliminate all these rumors/suggestions/theories about merging any airlines.

That being said...I don't think Delta should merge with anyone. Let's stick with what we got and work on this right now.
 
Cubsrule
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RE: Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 6:00 pm

There's a (somewhat longer) article in the New York Times about this...

http://www.nytimes.com/2007/11/14/business/15air-web.html

It actually makes some sense. Dump SLC and CVG like bad habits, keep ATL, LAX, SFO, DEN, and JFK. The only big question mark would be IAD, though what would probably happen is ATL would become more of a Latin America hub and IAD would become more of a Europe hub, owing to the stronger TATL O&D at IAD. The widebody fleets are obviously complimentary. Narrowbodies not so much, but UA seems to make out OK with 737s and 32xs now.

The problem is with completely different philsophies. UA has become all about product diferentiation. They are a 3-class airline, arguably 4 with E+. P.S. does well. Ex-Plus does well. Ted has stuck around. DL is none of those things. Is that an insurmountable obstacle? I don't know.
I can't decide whether I miss the tulip or the bowling shoe more
 
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kc135topboom
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RE: Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 6:05 pm

Thier different routes would work well for both. I would guess the Delta name would be kept, since DL would aquire UA, and DL is older anyway.

The wide body fleet and B-757s match well, except for the WB engines. The NB fleet doesn't match very well becaues of the MD-88s, A-319s and A-320s. UA's B-737 fleet is classics while DLs B-737s are NGs
 
incitatus
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RE: Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 6:06 pm



Quoting Cubsrule (Reply 2):
It actually makes some sense. Dump SLC and CVG like bad habits, keep ATL, LAX, SFO, DEN, and JFK. The only big question mark would be IAD, though what would probably happen is ATL would become more of a Latin America hub and IAD would become more of a Europe hub, owing to the stronger TATL O&D at IAD.

In that case maybe UA+DL should delete the SFO hub, which will be a low-cost-carrier blood-bath rink and focus on building a much larger hub at LAX. UA+DL would be a very good thing.
I do not consume Murdoch products including the Wall Street Journal
 
Cubsrule
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RE: Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 6:09 pm



Quoting Incitatus (Reply 4):
In that case maybe UA+DL should delete the SFO hub, which will be a low-cost-carrier blood-bath rink and focus on building a much larger hub at LAX. UA+DL would be a very good thing.

I would argue that they ought to make SFO similar to what DL has done with JFK, just TPAC instead of TATL. SFO is a great hub for Asia, just as JFK is a fantastic hub for Europe, but the competitive environment makes JFK (and might make SFO) a poor place for a lot of domestic flying.
I can't decide whether I miss the tulip or the bowling shoe more
 
bucky707
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RE: Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 6:12 pm

the hedge fund doesn't care if the merger makes sense. They only care if they stand to make money on the transaction.
 
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asuflyer05
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RE: Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 6:12 pm



Quoting Incitatus (Reply 4):
In that case maybe UA+DL should delete the SFO hub, which will be a low-cost-carrier blood-bath rink and focus on building a much larger hub at LAX. UA+DL would be a very good thing.

Because LAX doesn't have low cost carriers?
 
masseybrown
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RE: Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 6:27 pm

Such a merger could only be approved by the government under onerous conditions.

Possible conditions that the government might impose on a DL/UA combination could require the sale of either the DEN or the SLC hub, the sale of either the ORD or the CVG hub, as well as the sale of either the IAD or JFK hub and one or the other's LAX operation. While a couple of these choices might seem obvious, the outcome of airline mergers always seems to be 2+2=3.

I can see a buyer for IAD (NW?) and part of LAX (US? CO?), although buyers for CVG and SLC, assuming they would be the other choices, might be difficult to find at a decent price. Neither airline, as a public company, could afford the asset write-offs associated with just dumping the investment in a couple of hubs - it would wipe out too much equity. It would have to be done as part of an LBO.

Presumably UA has looked at selling itself off in pieces and decided the whole is more valuable.

Personally, I doubt there can be any merger among AA, DL, or UA. The mergers have to involve the smaller guys - either with each other or with one of the 3 biggest lines.

[Edited 2007-11-14 10:44:19]
 
quagmire123
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RE: Shareholder Urges United Merge With Delta: WSJ

Wed Nov 14, 2007 10:07 pm

Just saw this article tonight relating to this thread:

http://biz.yahoo.com/ap/071114/delta_united.html

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