Speaking of excuses, I'm not sure what excuse I can come up with for some of the stuff flying around concerning the potential US Airways/Delta deal.
Every day it seems like there are more inaccurate headlines, stories, mailings, rants, whatever, hitting my computer screen.
It's like a combination of the misinformation we saw being put out by some of the participants when ATA was in the throes of being fought over while it was in bankruptcy, and the political positioning we saw with the Wright Amendment hysteria. Wrap it up and what do you have? A mess.
The first misleading headline to hit my email box first thing last Friday morning? Dan McKenzie, analyst with Credit Suisse, sent out a research note headlined, "Delta Rejects Offer; Stay Tuned."
I read that and went, "What in the heck did we miss? Had the creditors met after both sides issued their respective press releases Thursday night?
The answer -- nothing. We hadn't missed anything.
As we talked about last week in our column on the "Perils of Bankruptcy," the decision to eventually accept or reject the offer from US Airways does not rest with the management brain trust at Delta Air Lines.
It lies with the creditors' committee.
All management at Delta did last week after hearing the US Airways presentation was come out publicly and say the same thing they have said from the get-go. Thanks, but no thanks.
If anyone seriously expected any other outcome, they were dreaming.
So yes, I found this headline on Dan's note to be somewhat misleading.
Fast forward to this weekend, when I received a copy of an email that had obviously been written by a Delta Air Lines pilot. However, the pilot was not named by name. I received a number of them -- which tells me the thing enjoyed a pretty hefty circulation. That in itself was rather appalling.
In this brilliant piece of writing, the author went to great lengths to explain why it was that David Bonderman was the real bogey man in this proposed deal. That David was calling the shots, not "Dougie," and that all he cared about was making money. Nothing more.
It went on and on, but I'll spare you the details.
The funny thing about this piece was that as hard as this guy tried to create a sense of evil conspiracy theory with his rantings -- he is obviously not aware that there is one big problem with his thesis.
Bonderman and Jerry Grinstein, CEO of Delta Air Lines, are not exactly strangers. Far from it.
Bonderman and Grinstein have both served on the University of Washington Campaign UW executive committee, (along with Bill Gates), and when Bonderman and TPG made a play to purchase Portland General Electric, which was owned by then-bankrupt Enron, Grinstein was not only a potential investor in the deal, but one of three general partners who would have sat on PGE's board.
The Oregon Public Utility Commission denied TPG's offer to buy the utility on March 5, 2005. Just about the time SimpliFares was starting to unravel, actually.
So for you Delta pilots out there who are harboring "conspiracy theory" thoughts in regard to Bonderman/America West/Doug Parker, etc., I suggest you get in touch with reality.
Then Wednesday the email box was full of comments concerning a headline that hit the tickers with a bang. The article, which seemed to be picked up by every media outlet in the world was clearly misleading.
The story in USA Today ran with the headline, "US Airways won't fight over Delta deal."
Now, I have to admit. I read this and said to myself, "Not in my lifetime could this possibly be true." It was akin to clicking on the Dallas Morning-News site last spring and reading a headline that read, "Kelleher Says Wright Amendment Can Stay As Is."
Both the headline and the lead of the story were off-base. The lead read, "US Airways will give up its proposed takeover of Delta Air Lines if management there can't be persuaded of the benefits, US Airways CEO Doug Parker said Tuesday."
Clearly, judging by the emails I received, this left readers with the impression that US Airways was going to walk away from the proposed deal unless Delta management decided to climb onboard.
What was even more unbelievable about this was that Delta apparently took the story that way as well -- as CEO Jerry Grinstein was out with a statement not too long after the story hit, saying again that the airline was determined to go it alone. As though, okay, if he says this enough -- they will simply go away.
Not surprisingly, this was then followed by a statement from US Airways in which the airline said that it fully intended to pursue the deal and that they expected due diligence to commence shortly.
What a cluster you-know-what.
Oh, and in case you're wondering what the real story is -- Parker made the comment that he would not fight Delta in bankruptcy court by submitting a reorganization plan without Delta management approval.
We have a long way to go between now and then.
Yes, this was stated in the second paragraph -- but it was still not very clear. Or at least that is the message I got from readers. And I agree. Bad headline. Bad lead.
And yep, later Wednesday, US Airways was out with a release that sought to clarify the situation, as it said the airline fully expected to pursue the proposed merger, and that it expected to begin due dilligence shortly.
Sheesh.
Then of course, there are the "positioning" efforts.
Principals from both sides are being featured in articles and interviews all over the planet.
We really hadn't read anything objectionable in this category until late Wednesday when we read Ted Reed's piece at TheStreet.com. The column was an interview with Delta ALPA MEC Chairman Lee Moak.
In this piece, Reed wrote,
"Moak spoke by phone from Crystal City, Va., site of the one-time headquarters of the former US Airways. That facility has since been shut down, idling several hundred workers.
'This is the definition of synergies,' he said. 'We will keep your name but close down your facilities, terminate, furlough and use attrition to get rid of your employees, and somehow that's best for the airline industry.' He said several thousand Delta employees, including some pilots, would lose their jobs in a merger with US Airways.'"
I'm sorry. But can I put on my boots now?
Both Lee and Ted need to be horsewhipped over this baloney. This reminds me of the press release that talked about DFW International Airport officials holding a press conference in the "darkened halls" of the airport. This was to go along with the idea that the airport was doomed to fail if the Wright Amendment was changed. Remember that whole theatrical performance?
Well, looks like we're in for more of it.
If Lee Moak wants to put this type of stuff out in a press release that's fine. But for Ted to write it as though it was "news" -- without any reporting of the facts to go along with it -- that's another issue.
Two things I am reminded of as all this "positioning" is slung out there.
One, the ATA bankruptcy. Accurate reporting on that process was hard to come by as well. Two, the recent political madness over changes to the Wright Amendment.
My suggestion to employees of both airlines? Read everything with a healthy bit of skepticism, and most importantly, educate yourself on the finer points of the bankruptcy process. And no, not how we watched it practiced with United Airlines. That was an exception to the rule.
Think more like how we saw it come down with ATA. Or with the (old) US Airways.
Also understand that this has now become a "political" fight for Delta management. And, it appears, for Delta's ALPA MEC. I'm still trying to figure out how the MEC there could come out against the proposed deal before they even saw it. But that's another issue.
This process should be more of an ongoing evaluation of what is truly the better path for the long-term financial success of the airline. But I fear egos have taken over the process. Unfortunately, when that happens, often times the best decisions are not made. And emotions can tend to rule the day.
So, just to recap. US Airways continues to pursue the deal. I expect we'll see due diligence begun here shortly.
Oh, one more tidbit.
I had a number of subscribers write me this week in regard to Delta's announcement concerning new Boeing aircraft. Short and sweet? The notes were all along the same lines. Did this news represent a belief by Boeing that Delta will remain independent and/or was it a kick in the face of US Airways?
Negative. Or at least that is what our Boeing source confirmed to us late Thursday.
While he wouldn't comment further about the aircraft orders and modifications, my assumption is that the aircraft involved would be aircraft that US Airways would be looking at anyway -- if they were to be successful in their proposal. In fact, I believe US Airways said something to that effect late Thursday.
Every day it seems like there are more inaccurate headlines, stories, mailings, rants, whatever, hitting my computer screen.
It's like a combination of the misinformation we saw being put out by some of the participants when ATA was in the throes of being fought over while it was in bankruptcy, and the political positioning we saw with the Wright Amendment hysteria. Wrap it up and what do you have? A mess.
The first misleading headline to hit my email box first thing last Friday morning? Dan McKenzie, analyst with Credit Suisse, sent out a research note headlined, "Delta Rejects Offer; Stay Tuned."
I read that and went, "What in the heck did we miss? Had the creditors met after both sides issued their respective press releases Thursday night?
The answer -- nothing. We hadn't missed anything.
As we talked about last week in our column on the "Perils of Bankruptcy," the decision to eventually accept or reject the offer from US Airways does not rest with the management brain trust at Delta Air Lines.
It lies with the creditors' committee.
All management at Delta did last week after hearing the US Airways presentation was come out publicly and say the same thing they have said from the get-go. Thanks, but no thanks.
If anyone seriously expected any other outcome, they were dreaming.
So yes, I found this headline on Dan's note to be somewhat misleading.
Fast forward to this weekend, when I received a copy of an email that had obviously been written by a Delta Air Lines pilot. However, the pilot was not named by name. I received a number of them -- which tells me the thing enjoyed a pretty hefty circulation. That in itself was rather appalling.
In this brilliant piece of writing, the author went to great lengths to explain why it was that David Bonderman was the real bogey man in this proposed deal. That David was calling the shots, not "Dougie," and that all he cared about was making money. Nothing more.
It went on and on, but I'll spare you the details.
The funny thing about this piece was that as hard as this guy tried to create a sense of evil conspiracy theory with his rantings -- he is obviously not aware that there is one big problem with his thesis.
Bonderman and Jerry Grinstein, CEO of Delta Air Lines, are not exactly strangers. Far from it.
Bonderman and Grinstein have both served on the University of Washington Campaign UW executive committee, (along with Bill Gates), and when Bonderman and TPG made a play to purchase Portland General Electric, which was owned by then-bankrupt Enron, Grinstein was not only a potential investor in the deal, but one of three general partners who would have sat on PGE's board.
The Oregon Public Utility Commission denied TPG's offer to buy the utility on March 5, 2005. Just about the time SimpliFares was starting to unravel, actually.
So for you Delta pilots out there who are harboring "conspiracy theory" thoughts in regard to Bonderman/America West/Doug Parker, etc., I suggest you get in touch with reality.
Then Wednesday the email box was full of comments concerning a headline that hit the tickers with a bang. The article, which seemed to be picked up by every media outlet in the world was clearly misleading.
The story in USA Today ran with the headline, "US Airways won't fight over Delta deal."
Now, I have to admit. I read this and said to myself, "Not in my lifetime could this possibly be true." It was akin to clicking on the Dallas Morning-News site last spring and reading a headline that read, "Kelleher Says Wright Amendment Can Stay As Is."
Both the headline and the lead of the story were off-base. The lead read, "US Airways will give up its proposed takeover of Delta Air Lines if management there can't be persuaded of the benefits, US Airways CEO Doug Parker said Tuesday."
Clearly, judging by the emails I received, this left readers with the impression that US Airways was going to walk away from the proposed deal unless Delta management decided to climb onboard.
What was even more unbelievable about this was that Delta apparently took the story that way as well -- as CEO Jerry Grinstein was out with a statement not too long after the story hit, saying again that the airline was determined to go it alone. As though, okay, if he says this enough -- they will simply go away.
Not surprisingly, this was then followed by a statement from US Airways in which the airline said that it fully intended to pursue the deal and that they expected due diligence to commence shortly.
What a cluster you-know-what.
Oh, and in case you're wondering what the real story is -- Parker made the comment that he would not fight Delta in bankruptcy court by submitting a reorganization plan without Delta management approval.
We have a long way to go between now and then.
Yes, this was stated in the second paragraph -- but it was still not very clear. Or at least that is the message I got from readers. And I agree. Bad headline. Bad lead.
And yep, later Wednesday, US Airways was out with a release that sought to clarify the situation, as it said the airline fully expected to pursue the proposed merger, and that it expected to begin due dilligence shortly.
Sheesh.
Then of course, there are the "positioning" efforts.
Principals from both sides are being featured in articles and interviews all over the planet.
We really hadn't read anything objectionable in this category until late Wednesday when we read Ted Reed's piece at TheStreet.com. The column was an interview with Delta ALPA MEC Chairman Lee Moak.
In this piece, Reed wrote,
"Moak spoke by phone from Crystal City, Va., site of the one-time headquarters of the former US Airways. That facility has since been shut down, idling several hundred workers.
'This is the definition of synergies,' he said. 'We will keep your name but close down your facilities, terminate, furlough and use attrition to get rid of your employees, and somehow that's best for the airline industry.' He said several thousand Delta employees, including some pilots, would lose their jobs in a merger with US Airways.'"
I'm sorry. But can I put on my boots now?
Both Lee and Ted need to be horsewhipped over this baloney. This reminds me of the press release that talked about DFW International Airport officials holding a press conference in the "darkened halls" of the airport. This was to go along with the idea that the airport was doomed to fail if the Wright Amendment was changed. Remember that whole theatrical performance?
Well, looks like we're in for more of it.
If Lee Moak wants to put this type of stuff out in a press release that's fine. But for Ted to write it as though it was "news" -- without any reporting of the facts to go along with it -- that's another issue.
Two things I am reminded of as all this "positioning" is slung out there.
One, the ATA bankruptcy. Accurate reporting on that process was hard to come by as well. Two, the recent political madness over changes to the Wright Amendment.
My suggestion to employees of both airlines? Read everything with a healthy bit of skepticism, and most importantly, educate yourself on the finer points of the bankruptcy process. And no, not how we watched it practiced with United Airlines. That was an exception to the rule.
Think more like how we saw it come down with ATA. Or with the (old) US Airways.
Also understand that this has now become a "political" fight for Delta management. And, it appears, for Delta's ALPA MEC. I'm still trying to figure out how the MEC there could come out against the proposed deal before they even saw it. But that's another issue.
This process should be more of an ongoing evaluation of what is truly the better path for the long-term financial success of the airline. But I fear egos have taken over the process. Unfortunately, when that happens, often times the best decisions are not made. And emotions can tend to rule the day.
So, just to recap. US Airways continues to pursue the deal. I expect we'll see due diligence begun here shortly.
Oh, one more tidbit.
I had a number of subscribers write me this week in regard to Delta's announcement concerning new Boeing aircraft. Short and sweet? The notes were all along the same lines. Did this news represent a belief by Boeing that Delta will remain independent and/or was it a kick in the face of US Airways?
Negative. Or at least that is what our Boeing source confirmed to us late Thursday.
While he wouldn't comment further about the aircraft orders and modifications, my assumption is that the aircraft involved would be aircraft that US Airways would be looking at anyway -- if they were to be successful in their proposal. In fact, I believe US Airways said something to that effect late Thursday.
