NW/DL Merger "Real Possibility"

[Busdrvr]

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!

Actually a$$ pimple, I consider myself a critic of the current management. The differance is I'm not some idiot so consumed with hatred for being turned down by UAL that I spin up and show the world just how much of a complete puss and bile infested imbecile who pops off without even having a clue what I'm talking about. Small point, you started it again here with your ignorance WRT UAL 757 fleet.

Busdrvr Said:
And if it matters, UAL will report a profit in 2006 that EXCEEDS $10 BILLION.

a$$ pimple responded:
Please, PLEASE: Somebody kindly remember this and rub Pompous Ass' face in his ludicrous prediction when January '07 rolls around...
As usual, what an IDIOT!

So I'm guessing that unless UAL losses over $13 BILLION over the last 2 Q's of 2006, you'll be on here delivering your mea culpa? Doubtfull, you'll retreat to the darkness where the rest of the vermin lives.

 

[WorldTraveler]

"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.

No they are not. DL is larger domestically in terms of cities served and enplaned passengers. UA is #1 only in Asia and #4 to both Europe and Latin America. DL is #1 to Europe and #2 to Latin America. Being #1 in just one reason is hardly justification to keep the United name.

We'll see how UA and DL both compare to the rest of the industry by the time 2Q2006 results come out. They could very well indicate the future of both of these carriers.

 

[Fly]

You seem to keep missing the point. Being the biggest and best to the future financial center of the world is a lot more important than being the best to an area any other carrier can fly to if they desire.

In this case, apparently, we'll have to agree to disagree. The results will become clearly apparent within the next couple years. I believe, without a doubt, that the United name will thrive regardless of who the CEO of the company is. The United and Delta names are well known in all of Europe and S. America but only one of those names (UNITED) is known in Asia.

BUT.....I also believe that United won't be a dance partner with Delta, so I guess it's unimportant. In that case, the Northwest name will survive and you still won't be able to go the the Delta board any longer. Face it...the Delta name is toast.



UAUA $31.48 DALRQ $0.75

 

[whlinder]

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.

Alliances are secondary to the overall strategy, but if you merge DL and UA, you've got a merged airline with anti-trust immunity with LH and AF/KL. No way that will fly in Europe. It will have to pick one or the other. Would DL as the survivor really pick LH anti-trust immunity and Star? I firmly believe Star is the best place for both a merged UA/DL and a merged UA/CO.

I also firmly believe that despite UA's inferior market share to Latin/South America and Europe compared the DL, that their worldwide brand recognition is stronger than DL's.

I had always thought UA/CO would be a merger made in heaven, filling the holes in UA's network quite well with EWR and IAH. However, the idea of UA/DL has grown on me recently. I think it would be really interesting to see what a merged UA/DL would do with all the 767s at their disposal. UA & CO's widebody fleet are spoken for, while DL is trying to find an international market for every 767 they have. I can see those 767s opening up a bunch of new intl routes out of current UA hubs, or replacing 777s to allow those 777s to open up new routes...

 

[WorldTraveler]

During BK, UA had the option to deploy their surplus aircraft on int'l routes but chose to relinquish some of the aircraft during their C11 proceedings with only a few new int'l routes. There is something to be said for cutting costs but if you demand lower lease rates than the market will bear, you can't be surprised when the lessors want the planes back.

Also, UA put itself in a no fleet growth position for several years after C11, a position DL said it will not be in. Given that the only way to keep costs down is to grow, UA will have problems with costs going up while revenues shrink - exactly the formula that will land them bank in bankruptcy.

 

[PhxMama]

You seem to keep missing the point. Being the biggest and best to the future financial center of the world is a lot more important than being the best to an area any other carrier can fly to if they desire.

In this case, apparently, we'll have to agree to disagree. The results will become clearly apparent within the next couple years. I believe, without a doubt, that the United name will thrive regardless of who the CEO of the company is. The United and Delta names are well known in all of Europe and S. America but only one of those names (UNITED) is known in Asia.

BUT.....I also believe that United won't be a dance partner with Delta, so I guess it's unimportant. In that case, the Northwest name will survive and you still won't be able to go the the Delta board any longer. Face it...the Delta name is toast.
UAUA $31.48 DALRQ $0.75

I have to tell you I love the penguins! Its hard to concentrate on your post, my eyes keep shifting over to them. Too darn cute!!!

 

[NewHampshire Black Bears]

I have to tell you I love the penguins! Its hard to concentrate on your post, my eyes keep shifting over to them. Too darn cute!!!

===========================================================

"You GO Girl" (PhxMama) !!

I've been telling FLY the same thing, about those Penguins,for Dam* near a YEAR now, and THANKFULLY FLY agrees.

I suggested(names) that we call them "Waddles" and "Lefty", although "Lefty" keeps swinging with his "RIGHT", and poor ol' "Waddles" keeps gettin' a involuntary Mud Bath

NH/BB's

 

[Ch. 12]

UAUA $31.48 DALRQ $0.75

Fly-

Using your measure, UA died long ago. To illustrate how irellevant using in-bankruptcy stock quotes, did you know that UAL's stock was below the current DL price for more than 3 years? UAL Stock

But I wouldn't have considered that negative for UAL just as the DAL stock is not a negative. You are comparing the uncomparable as any savvy investor (I would hope ANY investor) knows that the stock gets wiped out at the end of BK and new stock is issued and divvied to the pre-petition secured creditors. So I sure would hope that DAL stock was not very high just as I would expect that UAL's stock was so low during BK. Please don't try to pass the irrellevant as rellevant.

And as far as this thread goes...I sure would hope that such a merger (NW/DL) would never happen. It is just an alliance CEO speaking in hopes that they (AF/KL) would only have to deal with 2 US carriers rather than 3. But a NW/DL merger would be sure to shrink the industry if it did happen b/c there is no way that the merged company would survive (in other words...cross off two current majors from the list if it were to go down.)

 

[Deleted by Moderator]

Wrong. UA's average BK stock price was over $1.00 almost the entire 3 years. (fyi- UALAQ was the stock symbol)

 

[PhxMama]

===========================================================

"You GO Girl" (PhxMama) !!

I've been telling FLY the same thing, about those Penguins,for Dam* near a YEAR now, and THANKFULLY FLY agrees.

I suggested(names) that we call them "Waddles" and "Lefty", although "Lefty" keeps swinging with his "RIGHT", and poor ol' "Waddles" keeps gettin' a involuntary Mud Bath

NH/BB's

Ya know I like those names but maybe we could do a naming contest. Vote on the best. Lefty and Righty remind me of "the boys"(due to my gender I am without these) so Im not sure that would work. I would love to smack PHX Papa around like that(only once in a while!!) They still make me laugh no matter what we will call them!

 

[Ch. 12]

Wrong. UA's average BK stock price was over $1.00 almost the entire 3 years. (fyi- UALAQ was the stock symbol)

Tell that to the markets that thought it was UALZQ. That was the OTC symbol b/c it no longer traded on the markets.

Regardless of whether it was $1.00 or $0.75, would that even matter? Are you saying that it is relevant to look at pre-emergence stock prices? I think it is kind of pointless to argue about a 25 cent difference when it means nothing and isn't even the argument. Let's not tread away from the real issue that I brought up. I don't care if UAL stock was $5 for 3 years of BK...it was no measure of their post-BK situation nor their chances to survive BK...just as DL's current price is not. You and Fly can point out meaningless figures as much as you like but they are just that...meaningless.

 

[Fly]

Do you really believe a NW/DL merger would be bad? I honestly think that if they did merge, just as a UA/CO merger, would bring about the necessary consolidation and would also bring the power to survive to all 4 airlines. Not to forget that it would put AA into a serious situation of not having access to Asia.

fyi - I realize that the stock price of a bk carrier is worthless....it was more to shut up one of your customers who likes to act as if this bk is a well thought out managerial masterpiece rather than proof that they failed to run the airline in the manner that was required for their shareholders. If he'd just remove the cheerleading outfit and admit that they aren't infallible, it would be easier for others to take him more seriously.

 

[Busdrvr]

Fly,
I think NWA DAL would cause big problems and would lack the west coast presence they'd need to effectively counter UAL's pacific aspirations. In some respects, I think they would be basically two airlines sharing a bank account, and thereby not resulting in real synergies needed to be successful.

Additionally, I think there is at least one HUGE obstacle to a UAL, CAL marriage: PENSIONS. They have them, we don't. How do you make that work? How do you get a single contract for all? It's those type issues that have caused problems in the past. In all honesty, I think a UAL/DAL merge would be the least contentious. They already are on the way to having very similar contracts, as well as having very similar seniority lists. But because it makes sense, Glenn will surely make a play for CAL.

BTW, I'd stay with UAL for the name merely because "Delta" has no real meaning overseas. For all they know, It's a Egyptian airline named for the nile delta. But the other side of me says who the h*ll cares. All I want is a strong industry with the right number of large airlines that can price rationally. I could care less who signs my paycheck....as long as it's signed.

 

[Bear96]

Additionally, I think there is at least one HUGE obstacle to a UAL, CAL marriage: PENSIONS.

Does CAL still have defined benefit pensions for a lot of their workers? I didn't think they did. I could be wrong though.

 

[WorldTraveler]

This summer will be very telling in regards to who will be a survivor and who will not. If DL and NW for that matter are able to show significant operational profitability, then talk about DL being a survivor will be very meaningful. I still don't see NW as a long-term survivor in a consolidated industry but if they are able to demonstrate consistent profitability, they will have some control over their future which means they get to pick who they dance with.

Who would NW want to merge with (which means what scenario provides the current creditors/future owners) with the best scenario? Probably DL but CO isn't a bad scenario either. OTH, if DL demonstrates industry leading profitability, then DL could well play a leading role in industry consolidation. DL's balance sheet will clearly be cleaner than AA's or UA's or even CO's so the primary driver will be which one demonstrates the greatest profitability. Consolidation within the industry will have to be supported by outside investors like we saw w/ US/HP. Investors will most like the airline that has the cleanest balance sheet and the best profitability of their existing company. Presumably any serious bidder could put together a potentially winning business case. It's entirely possible we could see DL acquire UA and CO acquire NW. Both acquirers would probably be fairly benevolent to their acquirees given the relatively little overlap and their mutual desire to build a worldwide route network.

The other component that will have to happen is for the economy to falter as it does every 7-10 years and is ripe to do within a couple years. No carrier is sick enough that they will fail in the current economic environment. It's hard to think that anyone here is hoping for a downturn in the economy in order to see industry consolidation.

Let's see how the summer plays out and then we can talk w/ a little more certainty about what will happen. Given how quickly DL is turning its ship around, I believe they will be a shaping force in the industry which means they will get to choose what they want to acquire. But I will not make any more firm predictions until we see how the summer turns out.