NW/DL Merger "Real Possibility"

This should be fun! AA is screwed. (what a lovely mentality the AA people have, huh? "shove this, take that?!?" Karma. HA )
 
*NWA has CO Merger 'Veto' rights per DOJ stock deal.
NW has Veto right if some other Airline tries to buy or merge CO with them. But, if CO is the purchaser that super vote doesn't apply. Sure, you may say they don't have the money to buy anyone. However, a lot of people thought USAir didn't have the money to merge. There are a lot of people out there willing to pour money into a deal like UA/CO. If structured right NW would still have their vote but in essence it doesn't mean anything unless CO asks them to use it to kepp CO independent.
 
NW has Veto right if some other Airline tries to buy or merge CO with them. But, if CO is the purchaser that super vote doesn't apply. Sure, you may say they don't have the money to buy anyone. However, a lot of people thought USAir didn't have the money to merge. There are a lot of people out there willing to pour money into a deal like UA/CO. If structured right NW would still have their vote but in essence it doesn't mean anything unless CO asks them to use it to kepp CO independent.

I was lead to believe that if NWA merges with anyone they lose their veto right??

Someone please correct me here with a source....

JBG
 
Glad I was missed, NHBB.

Keep in mind that this statement was issued by the President of an airline that is owned by DL’s partner… and one whose own future is very much up in the air. It is not at all certain what role KLM will play in the world once AF and KL begin to merge their networks in a few years… and with that what role NW will play. NW’s transatlantic identity has been almost exclusively tied to KLM. AMS won’t disappear but it would make it a lot easier for KLM if they didn’t have to start over w/ a whole new partner.

I do not believe NW is DL’s 1st choice. NW and DL have relatively few transpac aircraft that could be used for immediate expansion to Asia. NW’s problem is that it didn’t see the need to expand to Asia other than to Japan sooner and now is dealing w/ all kinds of airlines trying to overfly Japan. NW is well beyond the 8 ball in defending its Asian franchise. NW also has an aged, fuel inefficient domestic fleet and the only way for it to restructure is on the backs of its employees since it has very little new revenue generating capabilities.

As for fleet, DL will be rid of 737 classics by this summer. And the combination of Airbus and Boeing equipment will not be the issue that a lot of people make it out to be if you have multiple mergers in the industry…. Newer fleets will be swapped between carriers if it makes more financial sense to maintain fleet commonality. Also, fleet commonality doesn’t mean as much when you have fleets of over 100 aircraft which DL and NW have for their largest types…. Engine compatibility is not as big of a deal as some might think….. a lot of heavy engine maintenance is contracted out now anyway.

NW/DL does not provide access to LHR nor does it provide a presence on the west coast. Granted, DL could grow a west coast presence; it had it at one time and the west coast looks pretty stable compared to the east coast right now. NW gives DL nothing to Latin America; while DL is doing very well there, it would be nice to gain greater access to S. America, esp. to Brazil and Argentina to which DL growth is restricted by treaty.

As for labor, DL has eliminated thousands of union jobs through mergers, asset acquisitions, and in hiring ex-Eastern employees. Most DL employees still do as good or better than their peers at union airlines, leaving lots of incentive for employees like at NW to jump ship for DL if given the chance.

I still think a DL/UA merger has the best chances of occurring w/ DL being the survivor. DL’s ability to determine its future is being played out right now in its restructuring; if DL demonstrates that it can successfully restructure itself and developing an industry leading position, it has a much better chance of being able to be the acquirer and to be given the resources necessary to execute a merger w/ another airline. DL and UA almost perfectly match w/ the exception of the duplicated DEN/SLC hubs.

A CO/NW is the best for the industry, although I doubt if CO wants to mess w/ NW. CO is probably best positioned to remain as a standalone carrier or to merge w/ someone like Alaska or even US which AA could do as well. AA could acquire NW but there would be huge hurdles because domestically NW and AA overlap too much in the Midwest; no lawmaker is going to support a combination that will certainly result in significant job and service cuts. Besides, AA needs a dramatic expansion into Asia now and would have to build a beyond NRT system just like DL would have to do with NW. AA does have the advantage of having a huge 777 fleet and more west coast strength but they tie up half of their 777ER fleet flying to Europe where the 777 is way more aircraft than is needed. NW’s A330s would replace AA’s 777s nicely to Europe.

I don’t see UA reaching a point financially where investors will see it as the surviving airline in a merger… in fact, I doubt if you will see anything happen w/ UA until it goes through chapter 11 again. All of the current airlines have gone through BK with the intention of surviving as standalone carriers. Some will do a better job than others at restructuring themselves than others. US’s restructuring really was not completed even in its 2nd C11 but HP’s management was able to convince investors of the value of a combined airline with what had been achieved so far even though US and HP are still very different airlines today.

I wouldn’t make much of this rumor but it does say that there are lots of forces that want consolidation in the industry. I think AA, CO, and DL will be survivors and acquirers while NW, UA, and the new US will eventually be acquired or merged w/ other airlines.
 
I think AA, CO, and DL will be survivors and acquirers while NW, UA, and the new US will eventually be acquired or merged w/ other airlines.
WT, in your grand vision, how do you see the alliance affiliations playing out? Either the 'surviving' CO or 'surviving' DL will not be in SkyTeam and will instead be in Star. Do you really see DL being the survivor in a UA merger and leaving the Star Alliance? If DL and UA end up as dance partners, I think you'll still see the United brand and the carrier in Star.
 
I do not believe that US is going to be acquired by anyone. They are in th emidst of mergin with America West. After that who knows but may be they would go for ALaska or may be not. As for DL/NW It doesnt sound too terribly good. I dont think DL would want the low morale at NWA but as far as merging, would the DOT allow it?
 
WH,
alliances are secondary to the overall management and finances of an airline. DL and UA along w/ every other US airline is still predominantly domestic - revenue which alliance partners cannot touch.

As for how alliances shake out in a an AA, CO, DL world, I'm guessing that AA and DL stay w/ their respective partners and CO goes to Star.

UA will only be the surviving airline in any merger if it demonstrates that it is running the best airline in the business and thus most worthy of being entrusted with the billions of dollars it will take to make a merger among the big six work. Right now, UA has failed to take a leadership role in the industry as a result of its trip through bankruptcy. AA and CO aren't in bankruptcy and are respected as being fairly well run. DL is obviously poised to pull off one of the most dramatic turnarounds in the industry. Those three will likely be given the opportunity to convince investors they can be entrusted w/ the billions needed to consolidate carriers.

No one is expecting consolidation to happen for another 18 to 24 months and when it does happen it will probably be tied to a downturn in the overall economy. Historically, economic downturns and upswings often happen close to changes in the Presidency. I believe we will see consolidation in the US industry take place in the 2008-2009 period.

US is doing a good job of integrating two airlines but don't forget they are pulling off their merger with investment money and their core business is still very much under attack by low cost carriers. They also are overshadowed on the east coast by much larger carriers that are getting their costs down or have good business fundamentals. There still are alot of states between US east and west's route systems and there is no plan at least publically revealed to help fill in those holes. The premise of US's existence was that it would be the largest, most expansive low cost carrier. Problem is that some of the legacies are getting their costs down to levels as low as US's but they have much more expansive route systems and the ability to dominate markets much better than US can; and US's costs are not as low as the traditional low cost carriers.

I don't slight the hard work that US has done but I don't think it is revolutionary or distinctive enough to ensure US's success.
 
WH,
alliances are secondary to the overall management and finances of an airline. DL and UA along w/ every other US airline is still predominantly domestic - revenue which alliance partners cannot touch.

As for how alliances shake out in a an AA, CO, DL world, I'm guessing that AA and DL stay w/ their respective partners and CO goes to Star.

UA will only be the surviving airline in any merger if it demonstrates that it is running the best airline in the business and thus most worthy of being entrusted with the billions of dollars it will take to make a merger among the big six work. Right now, UA has failed to take a leadership role in the industry as a result of its trip through bankruptcy. AA and CO aren't in bankruptcy and are respected as being fairly well run. DL is obviously poised to pull off one of the most dramatic turnarounds in the industry. Those three will likely be given the opportunity to convince investors they can be entrusted w/ the billions needed to consolidate carriers.

No one is expecting consolidation to happen for another 18 to 24 months and when it does happen it will probably be tied to a downturn in the overall economy. Historically, economic downturns and upswings often happen close to changes in the Presidency. I believe we will see consolidation in the US industry take place in the 2008-2009 period.

US is doing a good job of integrating two airlines but don't forget they are pulling off their merger with investment money and their core business is still very much under attack by low cost carriers. They also are overshadowed on the east coast by much larger carriers that are getting their costs down or have good business fundamentals. There still are alot of states between US east and west's route systems and there is no plan at least publically revealed to help fill in those holes. The premise of US's existence was that it would be the largest, most expansive low cost carrier. Problem is that some of the legacies are getting their costs down to levels as low as US's but they have much more expansive route systems and the ability to dominate markets much better than US can; and US's costs are not as low as the traditional low cost carriers.

I don't slight the hard work that US has done but I don't think it is revolutionary or distinctive enough to ensure US's success.
UA will only be the surviving airline in any merger if it demonstrates that it is running the best airline in the business and thus most worthy of being entrusted with the billions of dollars it will take to make a merger among the big six work.

I still think a DL/UA merger has the best chances of occurring w/ DL being the survivor.


I don’t see UA reaching a point financially where investors will see it as the surviving airline in a merger… in fact, I doubt if you will see anything happen w/ UA until it goes through chapter 11 again.

OK, I give up. Just where are you on the fence about this?
 
I still think a DL/UA merger has the best chances of occurring w/ DL being the survivor.


If history has taught us anything, it's that there is NO SURVIVOR in the new merger's. Investors come together and supply ALL the $$$.

I seriously doubt that UA/DL will be dance partners but if they are, the United name will remain simply because of it's strong Asian presence and name recognition in that part of the world. I seriously doubt they'd drop the name for a completely unknown company in the most important financial area of the world. (and he calls himself a 'World Traveler'....HA)

What exactly does Delta bring to the table? NOTHING! (but the staple job on the non-union Delta employees would be interesting) I doubt anyone would bother with that merger. CAL on the other hand.......... B)

We shall see but I'd bet you'll see United prosper in the end. UAUA $31.48 DALRQ $ 0.75 :up:
 
Yep. 'cept for those! Guess I try to forget about UAL thanks to a few of their arrogant cheerleaders on here...not you, of course!

Ah the a$$ pimple shows his face. Last time we talked you made yourself look like an idiot scoffing at the notion of a $10 billion paper profit at UAL. I guess I was wrong, it was over $20 billion.... :shock:

MGA 707 (aka a$$ pimple) said
"Not only are you (as always) a TOTAL a-hole, but an absolute lunatic as well.
Do you even know what ten/eleven BILLION is?
Even oil companies don't earn a fraction of that!

$10 billion profit--what a joke!"
 
"DL is obviously poised to pull off one of the most dramatic turnarounds in the industry."

...based on what? They're just as poised to fail miserably. In a DL/UA merger, UA better be the survivor if there's any hope of the merged entity surviving long term. Not only is United stronger in Asia, but they're MUCH stronger domestically. Their hubs will be the main survivors (SFO, DEN, ORD) with ATL and some Atlantic/Latin strengths being Delta's contribution.
 

Re: UAL's arrogant cheerleaders--
One of the two prime examples, as EVERYBOBY HERE knows!
What a sad, PATHETIC piece of crap you continue to be.
Back to your UAL hole, Pompous Ass! And stay there!
 

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