And so it begins..

[EMBFA]

USA Today

Report: Delta board to weigh merger with Northwest, United

Merger speculation is swirling again today, and Delta's back in the middle of the rumor mill. The Wall Street Journal (subscription required) writes on its website today that Delta's directors "on Friday will be asked to permit the airline's new chief executive, Richard Anderson, to begin formal merger discussions with both Northwest Airlines and UAL, parent of United Airlines, with the idea that Delta ultimately will choose between the two, according to people familiar with the matter." The publication claims Delta already has had "exploratory conversations" with both airlines and with Continental. For the latter, the Journal cites another unnamed source that it says has "knowledge of the situation."

The Journal says Delta's board's options are to approve the request, approve talks with only one carrier, defer while more information is gathered, or decline the request altogether. The Journal says "if Delta does embark on a two-track evaluation process with United and Northwest, that could force Continental onto the merger dance floor to avoid being left behind, according to several people familiar with the situation. Continental has repeatedly rebuffed earlier efforts by United to form a combination," the paper writes.

Delta already has been at the forefront of merger speculation today. The company's stock has soared more than 13% "following renewed speculation that the nation's No. 3 carrier may be close to inking a deal to combine with another airline," The Associated Press writes. Just yesterday, the head of Delta's pilots union –- Lee Moak -– wrote in a letter to members that "consolidation may indeed be at our door." The Atlanta Journal-Constitution (free registration) says Moak acknowledged in the letter that "we have been hearing about 'inevitable consolidation' for many years," but added "it is becoming increasingly difficult to discount these facts and other recent events as simply more rhetoric." Stay tuned ...

Posted at 01:51 PM/ET, Jan 10, 2008 in Continental, Delta, Northwest, United | Permalink | Comments14

 

[flyinawa]

But, but, but.....what about "keep Delta my Delta"?

 

[EMBFA]

They just didn't want to get involved with this trailer mess.

The big question is, if US is a player, is the west included?

What US does have going for it is that is still a pretty significant amount of capacity, mostly secondary, that is a prime candidate to be removed. Someone may be interested just to shut it down, although major mergers between the other four would probably have the same result.

 

[Art at ISP]

Somewhere along the line I still think NW and US are good dance partners--there are many good things about a combination like that--for US that is. With both carriers having significant labor issues, maybe a merger of two troubled airlines like that would give the incentive to start over and get everyone to the table. I also find it interesting that so many execs from NW have moved over to US--that would be tellling in another day and age.

That said, one possible fallout from this for US would be if UA combined with either NW or DL, perhaps they would leave the Star alliance leaving US a stronger partner in Star. Of course that would mean more pressure to get the operation/product act together, but it could mean lots more traffic for US.

I think anything is possible, but it would not surprise me unfortunately if US was left out of this consolidation dance altogether....

In any case, it's gonna be an interesting year in the airline business...

My BEST to you all..

 

[YVINTERN]

They just didn't want to get involved with this trailer mess.

The big question is, if US is a player, is the west included?

They should be...if not...screw DP


As for the Keep Delta My Delta campaign...it was really an "Keep US AIRWAYS YOUR US AIRWAYS" campaign but codenamed Delta.

 

[beachboy]

OH, that was another good one. Election 2000 Dan says "Don't bet the trailer money yet." My God, I'm quoting Dan Rather. I must have missed a pill somewhere today

 

[usairfa05]

If US is left out in the cold; the only option left would be to approach smaller carriers. US would have to approach Alaska and one of the Hawaiian carriers just to remain some kind of player. The first assurance to the other airlines would be the termination of the current US management. Maybe with a plan and a good management team several small carriers could make one new and improved national carrier. Of course the only other option would be for those not in a merger to slowly fade into the sunset.

 

[YVINTERN]

Maybe US Airways could bail Mesa out when Mesa "folds" and make it the third wholly owned subsidy...or US Airways could just buy SkyBus or Spirit out and gobble up these Airbuses and Latin America routes from FLL.

 

[EMBFA]

Maybe with a plan and a good management team several small carriers could make one new and improved national carrier.

US Airways has proved over and over and over, and over again that this just doesn't work.

 

[YVINTERN]

US Airways has proved over and over and over, and over again that this just doesn't work.

NO EMBFA...That's where you're W R O N G...if you took all the best qualities of each companies merged...not the worst like what US/HP did...It might just work if you keep the focus on...

PASSENGERS FIRST...EMPLOYEES SECOND...MANAGEMENT THIRD...SHAREHOLDERS ALWAYS ARE LAST

That will result in a very happy airline IMHO.

 

[Travelpro72]

I am in no way a fan of Parker but... Who's to say we are not talking to another carrier right now? We had absolutely NO idea about the US/HP merger when it was announced. While I'll be one of the FIRST to admit to our being trailer trash of the skies money talks. I'm no airline annalist but isn't Lakefield still here? He was the brains behind the HP/US merger. I just don't see Parker sitting idle while everyone else get in this game. I know we don't bring Pacific or South American strength to the table but we bring a whole lot of domestic and still a high percentage of east coast flying which is WHERE the money is domestically. The possibility is always there that we'll sit it out but my money is on our being involved. If we don't we'd be screwed and though the village seems filled with idiots I don't think they are THAT idiotic.

 

[EMBFA]

That sounds all well and good, but there doesn't seem to be a place for an almost all-domestic network legacy carrier. Can't compete against the megamajors or LCCs. They really need this.

 

[crusher]

The rumor mill has lots of corp travel between PHX and ORD. I wonder whether if there is any truth to this. It would not really surprise me too much , with them figuring that 3rd time is the charm.

 

[usair_begins_with_u]

No one wants LCC, its total crap.

 

[767jetz]

DL+UA will = NW+CO, and US/-Death

DL+NW and UA+CO = same.

DL+CO would put US in play because UA+NW is a no go... US needs either UA or NW.

US may need UA or NW, but it is not going to happen. If you read all the news today, and look at the big movers in stock price, it is clear that DL, NW, CO, and UA are the players.

Obviously DL is exploring a merger with UA or NW only. Either way that works out, CO will end up married to the other. A UA/NW combination would not float due to the Asian dominance and the fact that neither will give up the Pacific. Additionally, DL is not interested in a merger with CO.

US will sit this one out. As a few other's have noted, DL's "Keep Delta My Delta" campaign was really about "Keep US YOUR US" and about not being forced into a merger under someone else's terms. Other's have speculated that if US wants to increase it's reach it will have to look at other regional airlines, like maybe Alaska, or Frontier, or AirTran.

To add to the speculation, LH may have grabbed control of Jet Blue's reigns in order to keep it out of the consolidation game in advance of this merger frenzy that is at our doorstep. I don't know if that means UA would stay in Star or go to Skyteam, but my guess is Star simply because of the advantage of the larger network.

Unfortunately for US (and perhaps fortunately for others) they will be watching this round from the outside. Nowhere in any of the news today, or in the investment community has there been any mention of USAirways.