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ishky15
Topic Author
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Continental MAY Acquire Delta

Sat Feb 03, 2001 11:11 pm

http://washingtonpost.com/wp-dyn/articles/A20286-2001Feb2.html

Personally, I don't really care who buys who, because I'll still be flying the dominant carrier out fo Newark. But despite all the P/E ratios and ish, CO buying DL has a slightly better chace because of that whole NW deal. Whoever buys who would be fine, but the best thing would be that they would become one of the largest airlines in the world, possibly surpassing United. You have to remember that United chose to merge with a much smaller carrier, while in this situation you're merging the US's 5th and 3rd largest airlines. I have absolutely nothing against Delta as I have never flown them, but from what I've heard about all of these strikes, Gordon Bethune could help guide this company to prosperity and fortune the same way he did with Continental. I still have pretty high doubts about this deal going through, but if it did, the product would be one of the largest, best, superb airlines on the face of this earth.
 
Alpha 1
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RE: Continental MAY Acquire Delta

Sat Feb 03, 2001 11:27 pm

In such a scenario, maybe Gordon and Greg and the CO team would run such a new company, which, in my view, would be fantastic. Can you imagine what they would do for a combined CO/DL? It would be one kick-butt company. I don't know much about Mr. Mullin, but maybe some DL employees could chime and and give their two cents on such a scenario. For my money, I'd rather see Bethune and Brenneman run the show.
 
Tan Flyr
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RE: Continental MAY Acquire Delta

Sat Feb 03, 2001 11:43 pm

Several weeks ago this idea was kicked around on here and our Delta friends were pretty adamant about Dl Not being the one taken over..But stanger things have happened..ie: Texas Air buying CO about 15 yrs ago..So time will tell..The commonality of the fleet would make that part of an integration a breeze!
 
767ALLTHEWAY
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 1:06 am

Personal opinion: I like CO and I like DL, but i would really miss Delta if they got aquired.  Sad
 
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flashmeister
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 1:13 am

This seems like growth for the sake of growth -- It doesn't seem to make a helluva lot of sense to me beyond the fleet.
 
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flashmeister
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 1:16 am

By the way: I believe that CO+DL would exceed UA+US in domestic market share:

According to the article, CO+DL would give them 26+% of the US market. AA and UA would both have less tha 25%.

I'm not sure of the sheer size of the airline, however, and if it would surpass UA+US...
 
Guest

RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 2:18 am

Reuters is also reporting that if CO can't buy DL, DL would then seek an alliance with or try to buy Northwest (less preferable to DL, according to Reuters). A DL/NW combination would give the carrier 29.3% market share - bigger than US/UA or AA/TW
 
Republic
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 2:25 am

Greetings,

Here is the market share, according to the DOT:

UA/US = 26%
AA/TW/part of US = 25%
DL = 17%
NW = 12%
CO = 9%

The unstated reason by the POSSIBLE CO move toward DL is NW. It seems to me that CO is afraid that DL and NW will hook up, and then they are left with their 9% market share plus their current NW alliance. I am not sure of the exact terms of the CO/NW alliance, but it would appear that CO feels a CO/NW alliance, with 21% market share, is not the same as AA at 25% or UA at 26%. Or they feel NW can back out of this alliance if they choose.

This is the case of he who hesitates, loses. DL stood back while all the US and TW deals were going down. Now they are in this predicament. CO does not want a NW/DL deal to leave them in a similar predicament, hence the move to possibly acquire DL.

One thing is for sure. It the DOJ approves the UA/US and AA/TW deals, then:
1) either CO buys DL
2) or NW and DL merge
3) or NW/CO strengthen their existing alliance.

If CO thought their NW/CO alliance would work in a consolidated airline industry, then why would they be interested in a messy merger with DL?

My .02

Rgds,
Joe
 
Guest

RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 3:55 am

DeltaSFO seems to be very strangely quiet on this, after long denying that this scenario (which I proposed a month ago) could ever happen ... could this be because he is to embarassed to show his face?  Big thumbs up

Doubt it somehow!  Wow!  Insane

Go Gordon!!  Big thumbs up
 
deltaflyertoo
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 4:06 am

Check this article out too.


http://biz.yahoo.com/rf/010203/n03698141.html
 
Guest

RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 4:14 am

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.
 
Guest

RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 5:00 am

Yes, Ceilidh, you may have been right, and DeltaSFO as usual can't seem to admit that he might have been wrong.

In any case, the CO purchase of Delta would not by any means be a creative solution to Delta's problems. The combined debt load of these two carriers would be something like $9Billion dollars, plus whatever financing charges or additional debt the "New Continental" would have to take on to make the deal happen. Over the years, Continental and Delta, in particular, have financed much of their debt and their continued growth by encumbering their planes. So, the combined Continental and Delta would not by any stretch of the imagination be a financially flexible carrier. Delta would go from having the second best balance sheet in the business to having the worst, now behind Northwest. By comparison, United would also be a more spry financial bird; and, American would be sitting in the catbird seat with the best balance sheet in the industry, lying in wait perhaps for Alaska or Northwest if they should falter without a partner.

Then there would be the labor problems. Delta's pilots are currently paid more than their Continental counterparts. In fact, the Continental pilots have proposed asking for a pay raise in the 30%+ range to bring their pay rates on par with those of United. By comparison, the Delta pilots have been asking for a pay raise in the 17-20% range to accomplish the same parity. Other than the pilots, most of Delta's employees (i.e., ramp service workers and F/A) are non-union, whereas Continental's employees are. Will Continental be forced to unionize all of Delta's employees, and what will be the costs associated with that? Just a few days ago, Gordon Bethune was boasting that he would not have any of the labor problems of a combined AA/TWA and a combined UA/US Airways. Well, if CO buys Delta, they will not only have some of the same problems, they are likely to be much worse.

I think we also underestimate how much the networks of these two carriers overlap - JFK with Newark, Cincinnati with Cleveland, Dallas with Houston. For efficiency sake, they no doubt will have to rationalize these overlapping hub operations. Of course, regulators might press the issue first, since there are bound to be objections to the the fact alone that the "New Continental" would have two hub operations in the Greater NY area (JFK and Newark). For regulators, as I have argued before, there is no pressing political or financial reason to let this merger go through unscathed. Hence, the merger proposal of these two airlines will in all likelihood be treated even more harshly than United's proposal to buy US Airways has been.

Moreover, the combined operations of these carriers would also once again throw a spolight on what has always been a major weakness of both Continental and Delta' network, the WestCoast. Neither Delta nor Continental effectively compete with AA or UA on the transcon east-west markets and up and down the Pacific coast. That wouldn't change as a result of this merger. To be sure, Continental would gain a greater number of slots and gates at LAX, but Continental would have to do all the work to create an effective east-west and north-south route structure out of those slots. That would take an additional investment of capital that a combined Continental and Delta simply would not have. And, I don't want to hear the argument now that they could go out and buy Alaska or America West, because I began by saying that the only airline with the financial wherewithall to make acquisitions after this is all said and done would be American.

So, there we have it. Frankly, I thought they would figure out a more creative solution to their common problems. Instead, they will no doubt grab almost all of the attention, especially because unlike the two previous merger proposals, theirs will likely create an enemy in Northwest. God, isn't this going to be fun. As a friend of mine said today — You've just got to think that the people at American are the smartest people in this industry. If the UA/US Airways merger doesn't pass the regulatory muster because of the added pressure of the Delta and Continental proposal, American is still sitting pretty because its acquisition of TWA is being regarded as separate from these other deals, even by lawmakers, and almost as an act of salvation.
 
DeltaSFO
Posts: 2407
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 5:38 am

Oh..... so now we're accepting a news report as the gospel truth, eh?

I have no problem sitting back to see what happens. Unconfirmed reports of "early talks" about an extreme possibility still can't get around the fact that Continental still could not overcome the debt load it would take on by acquiring Delta.

Ceilidh.... you still didn't explain where you predicted a NW/CO buyout of DL.... you probably never will.

Ladevale...

Yes, Ceilidh, you may have been right, and DeltaSFO as usual can't seem to admit that he might have been wrong.

You have some sort of axe to grind with Delta, and apparently with me as well.....

That's okay. I don't care.

DeltaSFO
 
ishky15
Topic Author
Posts: 706
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 6:40 am

I was expecting more from DeltaSFO, but I guess he's finally realized that in the big picture of life, the bashing of complete strangers on a pathetic little online aviation forum is just a waste of time.
 
EVA744
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 6:50 am

Ishky15-- That's kind of funny. "I was expecting more from DeltaSFO". I almost fell out of my chair when I read that. DeltaSFO is about as informative as the bricks outside my front door.

As for CO buying DL, I think it is a good idea for CO, but I would think that DOT would like to see some divestiture of the NY area, and some sort of arrangement with Ohio. I applaude Ceilidh for his Nostradamus-like prediction of talks starting. There is no merger yet but it is a start Ceilidh.

Good Evening
 
EVA744
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 6:54 am

DeltaSFO-- here is the Ceilidh prediction you were looking for.
Ceilidh wrote (on 2001-01-11):
Reference Thread https://www.airliners.net/discussions/general_aviation/read.main/372429/
"Why Delta acquiring Coninental?

I'd say rather the other way around - especially if DALPA takes action. Delta has sufficient cash on hand to keep itself afloat for a month - then it's sayonara! The moment DALPA takes action, Delta's stock will plummet - and that's when Bethune will swoop in to pick them up."

Here is where it began... he stated what he thought, and if you notice later your attitude kicked in (a reply or two down from his.)

Good Evening.

 
FlyPNS1
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 7:22 am

There are two schools of thought on this recent announcement:

First, the two airlines actually intend to merge. If so, then Ladevale did a great job analyzing the challenges facing the newly merged "Deltanental" or "Contidelta." I've said it before myself, this merger could get ugly and Bethune might find himself up to his eyeballs in problems.

Second, the two airlines are using this to scare the government and certain labor groups. Obviously, neither DL or CO, want the UAL/U merger to go through and this is the easiest way to create more problems. Senator McCain of Arizona is already against this merger and he may be just the right guy to create hell for UA. Remember, this is the same man who twisted arms in order to open up beyond perimeter slots for his hometown airline, America West. In all likelihood, the prospect of a CO/DL merger will really make the DOJ reevaluate the UAL/US merger. As Ladevale pointed out, AA is in better shape because TWA is going bankrupt one way or another.

Even more importantly, the possibility of a merger between CO and DL might start to make DL pilots really nervous. DL is in bitter negotiations and the chances of a strike are decent, however the DL pilots might just reconsider this if they are threatened with becoming CO pilots. Leo may very well be intentionally leaking these stories in order to improve his bargaining position with the pilots. The DL pilots are strongly unified but do they really want to end up at CO???

Regardless of which scenario happens, it will make the next few months very interesting and harrowing.
 
DeltaSFO
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 7:25 am

EVA744...

Before you post more cheapshots, read my above post again. Ceilidh/Lawyergal/SAS23 claimed to have predicted a NW/CO joint buyout of DL. Which he never predicted.

You can either apologize here on the forum, or you can email your apology to me.

All of his posts are to try to impress members of this forum rather than actually contribute anything.

I realize that many of you out there may not like what I say or the way I say it, but I simply cannot stand aside and watch the spread of misinformation.

And Ishky15, in response to your cheapshot.... it has nothing to do with bashing... I simply realized that you can't win with Ceilidh/Lawyergal/SAS23. He has a great comeback line for everything. He knows the industry jargon in and out. But when it comes time to show his stuff, to let us see if there is any substance behind the style... he deftly sidesteps the question and changes the subject.

DeltaSFO
 
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chepos
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 7:43 am

STOP MERGING AIRLINES
I dont whant to see just three airlines . Please stop the merging I wish the UA/US does not go through . And the TWA/AA either . I would extremely miss Delta please stop it , I dont whant to see such proud names leave the skies and people loose there jobs either.
 
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RayChuang
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 7:55 am

Folks,

I hate to pour cold water on this, but CO + DL is NOT going to happen.

Simple reason: New York City airport access. With CO running EWR as a "fortress hub" and DL having a increasingly large presence at both JFK and LGA, the respective governments of the NYC metro area will rightfully fear that a combined CO/DL will have -way- too much control of the gates and landing slots in and out of EWR, JFK and LGA.

The ONLY way that CO + DL will work is that DL abandon all its gates at LGA and JFK and the combined company consolidate all its operations at EWR. Unfortunately, I really doubt DL wants to do that.  Smile

Now, I think DL should forget merging with CO and just buy out AS; DL immediately gets a major West Coast presence so DL can expand into Asia as air rights agreements with various Asian governments are renegotiated over the next decade.
 
Guest

RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 9:26 am

DeltaSFO - grow up please: you are more than well aware that my prophecy has been solely about CO taking over DL (which appears to have lots of credibility; much as you may dislike it); the NW involvement only came in a couple of days ago and as usual you are trying to cloud and convolute the issue.

Nor am I SAS23! Lawyergal I admit to, but not SAS23.

FlyPNS1 - my gut feel is that Leo is the wrong person to lead DL at this time; Gordon Bethune is a far more credible individual who moreover will stand up to the pilots (after all he is one) and will be able to mute his own pilots demands if he can trim back on those of DALPA. Win win for him all the way around.

Go Gordon!  Big thumbs up  Big thumbs up
 
DeltaSFO
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 10:05 am

- grow up please: you are more than well aware that my prophecy has been solely about CO taking over DL

Thank you. You are right. That has been your only prophecy. Maybe now you can explain this:

Username: Ceilidh
Posted 2001-01-31 18:57:41 and read 401 times.
Actually, it looks like a joint CO/NW takeover of DL will go ahead as I projected at the beginning of the year


Please enlighten me, as I am unable to find anywhere you projected anything of the sort.

Another change of the story.... yawn.

DeltaSFO

 
Guest

RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 10:51 am

Ceilidh, may have changed his story in that post, but in his defense he was right in the first place. He did predict, and I was there when he did, that CO would take over NW.

At the time that he made the pronouncement, someone objected that it could and would not happen, because no one would finance the deal considering that the debtload of the combined company would be unmanageable, a 5 to 1 ratio of debt to equity. The person who made this claim said that this kind of ratio was unheard of in the airline industry.

DeltaSFO also objected to the premise, principally because he thought that the Delta pilots would never agree to such a merger. DeltaSFO explained at the time that the Delta pilots have a provision in their contract that gives them veto power in the case of a merger. I now wonder under what conditions that provision applies.

What no one anticipated back then, including Ceilidh, is the willingness of Delta to let itself be acquired by Continental. If that turns out to be the case, the final debt load may not be much more than what it is now for both companies. So, we are probably not looking at a 5 to 1 ratio, but something less.

In any case, I remember the conversation that went on between Ceilidh and DeltaSFO. And, Ceilidh "did" predict CO would attempt to take over Delta, and DeltaSFO dismissed the possibility.

It may only be a report, but so was the news in the Washington Post a few weeks back that AA would buy some US Airways assets and TWA... And, as we know now, that came true...
 
Guest

RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 11:17 am

Yeah, sorry Pat, but you were beat on this one. Neil predicted a CO takeover of DL and thats whats in the news. Period.

Kind regards,
russell
 
Guest

RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 11:28 am

Will this merger mean the end of the unattractive Deltaflot color scheme?
 
DeltaSFO
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 11:45 am

Ladevale....

Interesting you should mention the subject of Delta pilots trying to derail anything like this.

I spoke a short while ago with a SLC-based ex Western 737-300 Captain... according to him, Delta ALPA holds veto rights over any attempted takeover of Delta, not right of first refusal.

So, contrary to what you said, I do admit that I was wrong on that issue.

I'm not sure about what, if any, restrictions there are to the veto rights. I think it is safe to say, however, that should they be able to exercise the right, they will, even if only to throw egg on the face of Mr. Mullin. Not to mention the pay cuts they'd have to take by merging into CO.

Russell....

Ceilidh may have predicted what he predicted... fine by me. I am more inclined to believe that it is pure coincidence that this showed up in the Washington Post.... I can already see Ceilidh dancing in the streets when he saw the story.

However, please remember that this is an unconfirmed report in a newspaper. Newspapers want to sell newspapers.

I have serious doubts as to the truthfulness of this report, and if it is true, whether Mr. Mullin and Company are prepared to do what the report suggests.

So, for the sake of argument, let's pretend it's true.

Employees in general will throw a fit. If the pilots can, they will indeed block the merger.

Continental still faces serious financing problems. Regardless of whether Delta is for or against the merger, the D/E ratio will still be extraordinarily high, given the fact that all Delta equity will become Continental debt.

A merger of this sort would require serious divesture of resources to prevent monopoly in certain areas, namely JFK/EWR, CLE/CVG, and DFW/IAH.

Northwest would do all possible to block the merger. They would argue in court that their right of veto applies whether CO is buying or being bought.

It would be impossible to get this thing past DOJ. Imagine trying to convince DOJ that Delta could not survive without being bought.... remember, we're talking about the airline that made more money last year than any airline in history.

At any rate, I doubt this story has any substance to it, given the difficulties associated with such an operation. Most likely, DL will have to settle for NW.

DeltaSFO
 
Alpha 1
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 12:07 pm

If DL has to settle forNW, then I can see CO going after AS for a larger presence in the west. It isn't a blockbuster like DL/CO or DL/NW, but it gives CO a truly national presence that it still lacks in the west. I don't see CO going after HP, thought, despite their past relationship. CO has taken back a lot of cities that HP operated for us in the last year: LAS, SEA, ELP, I believe. Why? Because our complaints in those cities run by HP employees were astronomical, and delays were rampant. Since CO took back over those stations, complaints have plummeted, and on-time performance skyrocketed. CO is tired of HP and how they do things.

The point being that all will not be lost for CO if they don't get a partner to dance with here. It's still interesting to discuss, though.
 
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RayChuang
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 1:13 pm

Actually, CO + AS could actually work.

The reason is simple: CO and AS share a lot of fleet commality--both airlines fly 737's and MD80's.

I'll say this though: whoever gets AS will become the next airline to have an extensive Pacific route network once the US renegotiates its air treaty rights with various east Asian nations in the next ten years.
 
TWA902fly
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 1:51 pm

N N OOO
NN N O O
N N N O O
N N N O O
N N N O O
N N N O O
N NN O O
N N OOO


-TWA902fly
Chicago Illinois
 
watewate
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 4:58 pm

Arguing is pointless. The bottom line is, NO ONE knows what's going on inside the Bethune & Co and Mullin & Cos' heads. It doesn't matter whether you work for DL or CO- because as CSA or reservation agent or pilot of f/a, you're not privy to any inside information. There're always ways to get around financing problems through creative ways and I doubt DL/NW/CO are all going to sit and watch while AA and UA gobble up market share. That is not to say that it's the rigt time for these massive consolidations- all signs point to cooling economy and recession is not out of the question. It would be not a bad idea for the remaining airlines to see in which direction economy is heading before making mega deals.
 
Guest

RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 10:26 pm

Gotta love DeltaSFO. For some reason he believes the only way the merger could happen is if DL acquires CO. Yet all he can base his ideas is "unconfirmed report[s] in a newspaper[s]. Newspapers want to sell newspapers."
 
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RayChuang
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 10:49 pm

Watewate,

However, with the prospects of several interest rate cuts from the Federal Reserve and very likely a tax cut later this year, I expect the US economy to be on the rebound by 2002.

At that point, we will be watching with GREAT interest how the US airlines will handle more growth again, especially on international flights to Asia, which has begun to shake off the effects of the Asian financial crisis of the late 1990's.

DL needs to be ready to take on the combined UA/US and AA/TW. That may require DL right now have to purchase an airline with a strong US West Coast presence (hello, AS!  Smile ); this will allow DL to take on UA and NW in the Pacific market when the landing slot rights between the USA and Japan, Korea, Hong Kong and China are renegotiated over the next decade.
 
HlywdCatft
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 11:08 pm

The best way for NW/DL/CO to solve this is a three way mutual merger- but mutual seems to be a dead word in the airline industry.

Again I despise mergers!!!  Pissed

As one person stated their would be only 3 airlines, everyone else would be swallowed up. What would happen to the Frontier's, Jet Blue's, Spirits, Pro Air's, Midway's etc???? Damn right they would be swallowed up and we would have super high prices that no one could afford, let alone it wouldn't be as fun watching only 3 airlines at the airport.


This is my solution-Break up these monopolies!!

American/TWA break back up to several carriers- American,TWA, Reno Air, Air California etc.

United and USAirways- United, USAirways, Piedmont, PSA etc.

Northwest-Northwest Orient, Republic (maybe even break down furthur-Southern, Hughs Airwest and North Central

Continental- New York Air, Continental, Texas International, (we already have a Frontier), People Express and Eastern

Etc Etc

Deregulation all over again dude!!!  Smokin cool

 
calpilot
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RE: Ceilidh

Sun Feb 04, 2001 11:39 pm

Let me say I thought the idea of my company buying DL could never happen. But then again thats why I fly the airplanes, and G&G never seem to call and ask my opinion.

I'm sorry, it seems you were right on this hunch.

I still belive this is a far strech though.

However, as Holly noted on Planebusiness, CO might be planing a IPO on COEX. Humm???? How much money would that raise? Couple hundred million? Nice down payment amount?
 
sushka
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RE: Continental MAY Acquire Delta

Sun Feb 04, 2001 11:42 pm

I sure hope that they do!
 
Guest

RE: Continental MAY Acquire Delta

Mon Feb 05, 2001 2:41 am

The laws of supply and demand in a free market dictate that if three airlines gang up and dominate the air travel market in the US, that smaller and more nimble airlines will fill in the gaps. Midwest Express, Air Tran, Alaska Airlines, Midway, even Southwest. People thought that DL would take over ATL after Eastern shut down. Take a look at the success of ValuJet and Air Tran. It can happen.

People always complain about airlines raising fares. That is the nature of the beast. If you don't like paying $100 on CO to change a ticket then fly WN. If ticket prices are too high, nobody is going to fly, hence prices will come down. At least if you suscribe to the Darwin theory of evolution.

It was theorized once that in the end there would only be one airline left in the US. That airline is Southwest. God help us, no first class!

By the way Ray Chaung, CO does not have a fortress hub in EWR. They only have just under 60% of the flights/passengers. They dominate, but they don't have a fortress. UA, AA, DL and US have a large presence in EWR.

I think that we are putting too much credence in the West Coast factor of airline mergers. To a post ages ago on the problems with West Coast hubs, AS, WN, and UA already control the market. The yeilds are low with high cost in LAX and SFO. The money is in the East. The West is just a stopping point for flights to Asia and South Pac and O&D pax from the rest of the US.
 
notdownnlocked
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Joined: Sun Sep 03, 2000 1:45 pm

RE: Continental MAY Acquire Delta

Mon Feb 05, 2001 4:32 am

Although I have said before I think that there will be no further mergers after AA/TW due to competitive issues and the government being cognizant of this, if and only if they are allowed I would hope CO would buy DL and the new company could be named Deltaco. (pronounced Del-Taco) Yes the same name as the Mexican restaurant chain located in the Southeast US. The name rights could be bought from the restaurant and different pictures of Mexican food items could be flown on the tails of the aircraft such as animal photos are flown around on the Frontier planes. Imagine a burrito on one side and a plate of nachos on the other!!! Hopefully Gordon would be in charge.
 
Republic
Posts: 541
Joined: Thu Dec 27, 2012 12:39 am

Wpr8e

Mon Feb 05, 2001 7:13 am

Greetings,

In response to your post, the airline industry does not operate in a complete free market. Slots and gates and airports are restricted. If I were a new start up reacting to the marketplace and decided that I wanted to have 10 gates at ORD, 5 at LGA, 5 more at SFO, and throw in 4 at LHR, do you think the free market would allow my start up to have these? Or are there restrictions and finite space at these airports, with the major consolidated airlines controlling most of them? Last time I checked, this was the case.

Rgds,
Joe
 
ContinentalEWR
Posts: 5573
Joined: Wed May 24, 2000 2:50 am

RE: Continental MAY Acquire Delta

Mon Feb 05, 2001 8:56 am

Ishky15, well said!

Personally, I'd rather not see this merger go through.
Delta and Continental are probably (along with WN),
the best managed carriers. Let UA digest US, AA do
the same to TW. Their service standards will slip all
the more and CO and DL will be able to win more
accolades and more interest.

ContinentalEWR
 
twa
Posts: 819
Joined: Sun Sep 19, 2010 10:59 pm

ContinentalEWR

Mon Feb 05, 2001 9:09 am

I Totally agree with you on that.

TWA
 
ishky15
Topic Author
Posts: 706
Joined: Tue May 30, 2000 12:02 am

RE: ContinentalEWR

Mon Feb 05, 2001 9:34 am

Wow, for once.......
 
DeltaSFO
Posts: 2407
Joined: Fri Nov 03, 2000 11:22 am

RE: Continental MAY Acquire Delta

Mon Feb 05, 2001 9:49 am

ContinentalEWR.....

Amen bro!

DeltaSFO
 
Guest

RE: Continental MAY Acquire Delta

Mon Feb 05, 2001 10:04 am

Frankly, I dispute the charge that service standards will drop as a result of the proposed mergers...

That is wishful thinking on the part of those who are standing on the sidelines... Just because Gordon Bethune says so doesn't mean its true...

Service standards for instance have been rising at AA with "more room in coach" and more overhead storage room. Furthermore, AA has spent the last five years upgrading (e.g., Los Angeles, New York, Dallas, LHR) and planning to upgrade all of their facilities (e.g., Miami and Boston). For business travelers alone, AA has raised service standards by introducing a first class suite product on its 777's, providing free and unlimited upgrades on Y fares to its top tier frequent flyers, and offering more seats in first class on important trunk routes like LAX to Chicago so that its frequent flyers have a greater chance of upgrading.

The changes at United haven't I admit been as dramatic or as widespread, but give credit where credit is due. They were the first US carrier to introduce EconomyPlus seating for their full-fare coach and their elite level frequent flyers. Meanwhile, Continental and Delta have more or less stood on the sidelines, hoping that their load factors hold up in view of how better it has become to fly on American and United.

Granted AA and UA aren't currently at the top of the ladder when it comes to on-time arrival, but because there is no carrier whose flights arrive 100% of the time on time it really doesn't make much of a difference in the mindset of the average passenger. In effect, delays and cancellations have become such a fact of life that unless they reach such horrendous levels as they have lately at America West, it really does not lead to a competitive disadvantage.

The good thing for United and AA is that they decided to make certain service enhancement before their merger plans were complete. So, even if things get somewhat messy as a result of the merger, they've given their current passengers some reason for choosing them over the competition.

True, there are bound to be challenges with union integration, with systems integration, with flight schedule changes, etc.. But, from my point of view, these challenges will not put these two carriers at a competitive disadvantage. To be sure, the challenges at United will be greater because of the mess that US Airways operations are now, but UA will continue to have the most far-flung operations of any US carrier, and the most masochistically loyal, frequent-flyers.

Meanwhile, the people at American will be helped by the fact that people at TWA are generally looking forward to their new employee life at American and the fact that TWA more or less is a one hub operation which despite TWA's financial problems has operated quite efficiently, perhaps even more efficiently than American's other Mid-America hubs, if on-time arrival is the standard.

So, my message for Gordon Bethune is you're going to be quite surprised when things don't turn out so badly for United and American. The merger might in fact reinvigorate United, and it might make American's network as far-flung domestically as United's has always seemed.
 
SESGDL
Posts: 3191
Joined: Sat Jan 13, 2001 6:25 am

RE: Continental MAY Acquire Delta

Mon Feb 05, 2001 11:53 am

A little info for all of ya'll,

Northwest wouldn't let CO takeover DL, NW likes their position in the NW/CO (NW being larger than CO), If CO got to be the largest airline in the world, that leaves NW still at a lagging 4th. After a merger like this, CO could just cancel the alliance, they would no longer need NW, and therefore NW would be totally left behind. Sorry, but also, you think the Government will let this happen? Come on............
 
notdownnlocked
Posts: 986
Joined: Sun Sep 03, 2000 1:45 pm

Sesgdl

Mon Feb 05, 2001 12:06 pm

I have said all along that the US government will allow no other mergers to take place after the AA/TW tieup. I'm wondering how many people have watched the latest Senate hearings and think that mergers of profitable airlines will go forward. This includes the UA/US/AA transactions. The DL/CO proposed merger/buyout is a future smokescreen meant to derail UA/US and the AA/US transactions. While there may be mergers of smaller players in the US market, larger profitable airlines will not be allowed to align and I think this is a good thing. I would be willing to bet money on this. As I have said before US is not in such a predicament as TW is and therefore will have to go alone as a going concern. Let me know you opinions.
 
toxtethogrady
Posts: 1867
Joined: Sat Dec 23, 2000 12:33 pm

The Hubs?

Mon Feb 05, 2001 12:11 pm

DFW gets folded into IAH, CLE is scaled back in favor of CVG, ATL is, well, ATL, and CO enjoys the good fortune of having hubs in JFK and EWR.

If there are assets to sell, DL has some MD-90's and MD-11's that are expendable, and AA would covet DL's gates at DFW. Is the $9 billion debt manageable? Perhaps, but then how much cash do both carriers have together?

The positive in this deal is that Bethune would be in charge, not Mullin.

Curious item: on Friday DL's stock stayed flat while CO's stock went up $2.50. The market must be interpreting this as a purchase of CO by Delta.
 
QantasA330
Posts: 304
Joined: Tue Dec 05, 2000 1:57 am

RE: Continental MAY Acquire Delta

Mon Feb 05, 2001 12:26 pm

I have always stayed neutral on this subject. While this CLEARLY states that CO could take-over DL, that DOES NOT mean that it would happen.

DeltaSFO - CO may be able to take over DL, but I am NOT going to let any of this information go to my head. Newspaper writers NEED to sell papers - They will do ANYTHING to sell them.... this story may or may not come to truth. I personally hold no objections to it, however; I do NOT see this merger going through. Until I see the first DL plane painted in CO's livery, or get VIABLE confirmation on the matter; I am going to hold none of this to the truth. - - - Therefore everybody needs to hold their breath on the DeltaSFO/Ceilidh thing. Until there IS A MERGER, everybody should lay off DeltaSFO.... and Ceilidh (for that matter).

Kindest Regards,
 SmileQantasA330 Smile
 
toxtethogrady
Posts: 1867
Joined: Sat Dec 23, 2000 12:33 pm

On That Basis, QantasA330...

Mon Feb 05, 2001 12:33 pm

I have my doubts UA will be allowed to acquire US Airways...

But we just had a change in administrations, and the new guy seems to think the more monopoly concentration you have in an industry, the more competition you get (e.g. oil companies, electric utilities, record companies, ad nauseam).

If any of these mergers goes through, I would urge the US to junk the cabotage restrictions and end the 25% cap on foreign ownership, so that Virgin can bring its low-fare carrier to these shores!
 
Guest

RE: Continental MAY Acquire Delta

Mon Feb 05, 2001 6:53 pm

QantasA330 - quite right!  Big thumbs up As I have said all along, this is pure pure conjecture on my part based on various whispers I picked up in December. As we all know, there's a long way to go from first discussions to the disappearance of an airline's livery; and along the way there are many, many hurdles to be overcome.

Don't forget that Dubyah comes from Texas - and is on first class terms with the good ol' boys at IAH!
 
EVA744
Posts: 147
Joined: Wed Oct 11, 2000 1:11 am

RE: Continental MAY Acquire Delta

Tue Feb 06, 2001 2:18 am

DeltaSFO-- I wonder how many times you can reiterate the information that was already given to you by myself and others in the forum. It seems that when someone else points out that you were wrong, that you believe it. Please reference the above thread that I so neatly pointed out to you in plain english, and you will see that Ceilidh did correctly predict the talks that are occuring. I don't believe anything I read unless I see it somewhere else, and that starts with your replies. You have demonstrated the same misinformative nature as Ceilidh did in the past on numerous occasions often blinded by your dream. (See CalWings for Ceilidh, and See Delta Pilot for DeltaSFO.)

This will be miy final post here on airliners.net because I see myself becoming just like you and others on this forum and I do not like it one bit. Shallow and condescending, doubtful of communal information and allowing yourself to think you are better than others (I have not gotten there yet, but I see you (DeltaSFO) like that and I can not allow myself to go there. Goodnight and Good Luck with your PNRs.

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