31 replies to this topic

[Itestwell]

[quote name='yvrusfa' date='Jan 17 2007, 01:49 PM' post='447397']
CLT-Douglas....

Good question! One my friends and I were pondering yesterday.

Who knows? My thoughts are that..yes, we should complete our merger first. However, even if the DL deal does happen, nothing will even begin happening outside of the court process until after our May full integraton is complete anyway. So that will be done by then.



You are joking, right? There is no way they will have fully, merged agreements by May with all employee groups. They have not even opened any important sections with the FA contract, and they are meeting about 6 days a month, when convenient. I give it at least another year, if not more.

They may combine rez systems, but full integration? Nowhere on the horizon. Consider this clip from DCA LECP sent today:


Building a Better Airline? Start with US first!

I took some time (and a sedative) and went to the new Company
website regarding the Delta merger. While it was filled with
press releases and news articles in favor of the merger I
couldn't really find anything about "building a better airline".
In fact all I kept on thinking of is instead of focusing all
their energy on this pending merger, why not focus on the one at
hand. The slow pace of negotiations, catering problems, crew
bases out of balance, shortage of flight attendants, continued
violations of the existing collective bargaining agreement. Is
this really how you build a better airline? I imagine it can
only be a sign of times to come which can't be good. My
suggestion would be to focus the Company time and energy on the
task at hand. This merger may not happen but we are still here
and it would appear that they have more than their hands full.



Maybe it's time for the MEC to make some noise?

[usairways85]

Well US already lost out on the opportunity to pick up some extra widebodies Austrian(i think it was them) had on the market. Something tells me there is no plan B

[USA320Pilot]

In my opinion, and I have no information on this, if US Airways does not complete the Delta merger Doug Parker will go to Plan "B" - Northwest Airlines.

US Airways' "executive suite" sees value in merging with a bankrupt carrier because of the financial flexibility available while an airline is operating under court protection in a "formal reorganization".

The Delta and Northwest merger's would be once in a lifetime opportunities to remove fixed costs that otherwise would not be available during a merger between two solvent companies.

I too thought Northwest would be a better fit, but after talking to Doug Parker and listening to Scott Kirby speak I now know the Delta combination would be the best fit. Parker's team began working on the Delta merger immediately after the US Airways "corporate transaction" was complete on September 27, 2005 because management believes it would provide the greatest profit potential (highest cost cuts, revenue gains, and economies of scale) and growth opportunity.

Regards,

USA320Pilot

[Gilding the Lily]

USA320Pilot, on Jan 18 2007, 07:30 AM, said:

In my opinion, and I have no information on this, if US Airways does not complete the Delta merger Doug Parker will go to Plan "B" - Northwest Airlines.

US Airways' "executive suite" sees value in merging with a bankrupt carrier because of the financial flexibility available while an airline is operating under court protection in a "formal reorganization".

The Delta and Northwest merger's would be once in a lifetime opportunities to remove fixed costs that otherwise would not be available during a merger between two solvent companies.


Regards,

USA320Pilot

If US was to go after your prophesied 'Plan B', then it would have to get 'Plan B' together real quick. NW is not too far behind DL in its bankruptcy; NW filed its Plan for Reorganization last Friday.

Perhaps, however, NW realized it may be a target to an unwelcome merger candidate. This could explain why NW filed its bare-bones Plan without the Disclosure Statement that usually accompanies the Plan. Without the Disclosure statement, we are in the dark as to valuation, business strategy, financial projections, and the percentage of new stock that will go to the creditors.

The omission is definitely raising my eyebrows. Obviously, they are playing the "need more time" card. The question is... why do they need that additional time? Is it to continue/enter merger discussions or is it to fine-tune the financial details/projections to all but guarantee support from the voting creditors?

Filing the plan without the Disclosure Statement is nearly pointless... in other words, what good is it to file a plan when you don't even have the details to fulfill that plan? At best, it can be considered an insufficient piece of paper that simply shows that a little progress has been made.

In my mind it is a signal that NW anticipates that something big (beyond a potential US/DL deal) is going to occur that would partially impact the details contained in the Disclosure Statement. Catch my drift?

[brokenwrench]

My opinion for what it is worth. I hope I am wrong on a couple of points, here goes.

Delta goes stand-alone after Bethune convinces the creditors that there is more value/less risk in Delta going it alone and merging with NW later. To put the creditors doubts about this at ease the DL BOD names Bethune Chairman of the Board.

US discovers that while they spent all this time and energy on a merger that did not go thru they now have a plate full of labor problems on the home front.

DL & NW merge in late 07 early 08.
UA & CO follow.
US orders a boat load of airbus wide bodies to grow their Atlantic routes on their own (what a concept). They also put in a bid for Alaska but are out bid by AA.

All the "experts" that once sang Doug's praises now criticize him for not taking care of his own before waste ting all this time and energy on a merger that did not happen.

[EyeInTheSky]

Whatever happened to "homegrown" companies? Why can't the company enlarge through internal growth? Hey, if US can get 5 billion in cash to pony up for another airline; you'd like to think they could get half that amount for a large aircraft order. There are a lot of airplanes sitting around it's time to think outside the merger box.

Later,
Eye

[gaucho99]

USA320Pilot, on Jan 18 2007, 06:30 AM, said:

In my opinion, and I have no information on this, if US Airways does not complete the Delta merger Doug Parker will go to Plan "B" - Northwest Airlines.

US Airways' "executive suite" sees value in merging with a bankrupt carrier because of the financial flexibility available while an airline is operating under court protection in a "formal reorganization".

The Delta and Northwest merger's would be once in a lifetime opportunities to remove fixed costs that otherwise would not be available during a merger between two solvent companies.

I too thought Northwest would be a better fit, but after talking to Doug Parker and listening to Scott Kirby speak I now know the Delta combination would be the best fit. Parker's team began working on the Delta merger immediately after the US Airways "corporate transaction" was complete on September 27, 2005 because management believes it would provide the greatest profit potential (highest cost cuts, revenue gains, and economies of scale) and growth opportunity.

Regards,

USA320Pilot

The problem I see with Plan B is the fact that the reason Plan A might not happen will be due to the fact DL and NW merge. Then we would have to go to Plan C which I don't know what thatis. We'd be fresh out of bankrupt carriers to go after.

[USA320Pilot]

Gilding the Lily,

Your analysis is well thought out and I agree with your comments.

Another important point is that Northwest hired I believe Evercore a few week's ago to advise the airline on "strategic alternatives".

The question remains that if "it is a signal that NW anticipates that something big (beyond a potential US/DL deal) is going to occur that would partially impact the details contained in the Disclosure Statement," but what is Northwest's objective? Furthermore, with the uncertainty surrounding the Delta - US Airways deal could Northwest be hedging their bet?

They certainly do not want to be left out of the M&A game; however, an important question is do they want to be acquired or does management want to see the business enterprise survive?

Options:

1. If US Airways is unsuccessful in its attempt to acquire Delta then merger with the Atlanta-based company. In this scenario I suspect Delta management would want to run the combined company.

2. Be acquired by American.

3. Merge with Continental. The two companies already have a broad interest/relationship with one another.

One point that I find interesting was the leak to the WSJ that Delta and Northwest are talking. Could Delta have leaked the information to the WSJ to make its creditors believe there is another M&A option, regardless of the depth of talks with Northwest, to help influence their desire to remain a standalone company? If nothing else I believe the timing is suspect.

Regards,

USA320Pilot