The Noose tightens on Gerry

[DLFlyer31]

Let's switch gears for a second. Pretend you are Boeing. One of your biggest customers (with hundreds of millions of dollars of future business already on the books) is the target of a hostile takeover by a carrier with huge ties to your biggest competitor.

Abe

I wouldn't necessarily rely on Boeing. The relationship between Boeing and DL has significantly soured over the past few years. DL has NOT been a good Boeing customer.

Remember when DL was crying poor to Boeing and defering aircraft deliveries, while at the same time spending billions on CRJ's that were being used to replace those Boeings. Between now and 2009, DL is only scheduled to take delivery of a whopping 15 planes from Boeing.

This might explain why Boeing has chosen to remain neutral so far. If Boeing really thought an independent DL was going to generate a significant number of orders, I'm guessing they would have already sided with DL. However, Boeing just isn't sure of that given DL's history.

While I don't think this merger is a good idea, I wouldn't count on Boeing to be DL's savior.

 

[abe]

I wouldn't necessarily rely on Boeing. The relationship between Boeing and DL has significantly soured over the past few years. DL has NOT been a good Boeing customer.

Really? Here's my rough count of the aircraft Delta has bought from Boeing from 1998-2002 (this doesn't include leased aircraft, or aircraft bought from other carriers):

8 777's
21 767-400's
24 767-300's
71 737-800's

Definitely not Boeing's biggest customer, but nothing to sneeze at either. Many Billions worth, to be sure!

Remember when DL was crying poor to Boeing and defering aircraft deliveries, while at the same time spending billions on CRJ's that were being used to replace those Boeings. Between now and 2009, DL is only scheduled to take delivery of a whopping 15 planes from Boeing.

I do remember that, but I also remember when Airbus was trying to break into the US market with their 330/340 and narrow body fleet. They made sweetheart deals with severals US carriers, including AWA and US Airways. Things were looking bleak for Boeing...in fact they slipped to #2 for a few years.

Delta not only chose Boeing then with big orders for 777's, 767-400's and 737NG's, they decided publicly that they would be a Boeing-only airline going forward.

My understanding about the current deal is that Delta is still buying those -800's. Sure, they going to turn around and sell them (and maybe lease them right back, who know's?)....but they are still honoring their committment to buy them:

http://news.delta.com/article_display.cfm?article_id=10478

Looks like 65 firm orders over the next 4 years. The 777LR's are $140 million or so a copy...that's a lot of $$$!

This might explain why Boeing has chosen to remain neutral so far. If Boeing really thought an independent DL was going to generate a significant number of orders, I'm guessing they would have already sided with DL. However, Boeing just isn't sure of that given DL's history.

While I don't think this merger is a good idea, I wouldn't count on Boeing to be DL's savior.

Boeing won't be Delta's savior. But they will help squash this deal, in my opinion. Boeing and the other creditors haven't even seen the other deal(s) yet....why should they weigh in now? When buying a car, is it smart to go to one dealership, ask the price, then decide on the spot? They want to visit a few other dealerships first, then form an opinion.

Let's see the other deals on the table, then it will be clear who holds the advantage.

My bet is that anything looks better to Boeing than having Delta become an Airbus carrier.

What do you (and Boeing execs) think will happen to these Billions of dollars worth of orders if Parker get's control while Delta is still in BK?

They have the orders already...why would they want to worry about the uncertainty of Parker cancelling them all for Airbus...despite what he's probably telling them?

Actions speak louder than words:

http://www.aerolawgroup.com/news%20us%20ai...20announced.htm

http://www.findarticles.com/p/articles/mi_...29/ai_n15888202



Abe

 

[wings396]

The jest of this Boeing deal, is that they will still have buyers for their A/C if the merger goes forward or not. Boeing has nothing to lose, and everything to gain with the US offer that is on the table. They can collect most of the cash that is owed to them, and continue to sell A/C to the merged Airline. As I have said before, the only reason that the old US management went with the Airbus fleet was due to delivery backlogs that they would have been up against with Boeing. CO, AA,UA & DL had just placed multiple orders with them, and US would have had to wait several years before taking delivery of any A/C from them. Wolfe did get a sweet deal from Airbus, and then sold the A/C soon afterwards for a profit to a leasing company. He then leased them back, and used the profit to line his pockets before bailing out after the failed UA merger..

 

[757inthebarrel]

The jest of this Boeing deal, is that they will still have buyers for their A/C if the merger goes forward or not. Boeing has nothing to lose, and everything to gain with the US offer that is on the table. They can collect most of the cash that is owed to them, and continue to sell A/C to the merged Airline.

I would say this is a no-brainer from Boeing's standpoint:

- Merged airline
-- Smaller than two independent companies. A smaller company buys fewer aircraft
-- Floods the market with used aircraft.

- Independent companies
-- One loyal Boeing buyer with huge fleet replacement needs in the future. Future fleet plans call for only two aircraft types. Boeing narrowbody (737NG/797) and Boeing widebody (787).

-- One loyal Airbus customer with new Airbus narrowbody fleet that may or may not order Boeing aircraft in the future.

- They have nothing to gain by a merger as DL has already settled with them and agreed to buy the remaining aircraft orders some of which they will resell.

- They have much to lose from the combination as they trade a sure Boeing customer for one that has a large Airbus fleet and significant A-350 orders on the books.

- Lastly, a takeover greatly extends bankruptcy for DL extending the time until payoff for all creditors. Not a good thing in the ultra-volatile airline industry.

 

[Flufdriver]

Really? Here's my rough count of the aircraft Delta has bought from Boeing from 1998-2002 (this doesn't include leased aircraft, or aircraft bought from other carriers):

8 777's
21 767-400's
24 767-300's
71 737-800's

Definitely not Boeing's biggest customer, but nothing to sneeze at either. Many Billions worth, to be sure!
I do remember that, but I also remember when Airbus was trying to break into the US market with their 330/340 and narrow body fleet. They made sweetheart deals with severals US carriers, including AWA and US Airways. Things were looking bleak for Boeing...in fact they slipped to #2 for a few years.

Delta not only chose Boeing then with big orders for 777's, 767-400's and 737NG's, they decided publicly that they would be a Boeing-only airline going forward.

My understanding about the current deal is that Delta is still buying those -800's. Sure, they going to turn around and sell them (and maybe lease them right back, who know's?)....but they are still honoring their committment to buy them:

http://news.delta.com/article_display.cfm?article_id=10478

Looks like 65 firm orders over the next 4 years. The 777LR's are $140 million or so a copy...that's a lot of $$$!
Boeing won't be Delta's savior. But they will help squash this deal, in my opinion. Boeing and the other creditors haven't even seen the other deal(s) yet....why should they weigh in now? When buying a car, is it smart to go to one dealership, ask the price, then decide on the spot? They want to visit a few other dealerships first, then form an opinion.

Let's see the other deals on the table, then it will be clear who holds the advantage.

My bet is that anything looks better to Boeing than having Delta become an Airbus carrier.

What do you (and Boeing execs) think will happen to these Billions of dollars worth of orders if Parker get's control while Delta is still in BK?

They have the orders already...why would they want to worry about the uncertainty of Parker cancelling them all for Airbus...despite what he's probably telling them?

Actions speak louder than words:

http://www.aerolawgroup.com/news%20us%20ai...20announced.htm

http://www.findarticles.com/p/articles/mi_...29/ai_n15888202



Abe

I guess the RED print means it's real important stuff...man, lay off the red ink already...hurts the eyes!! We get your point!! By the way...the guy out in Tempe sys hello!!

 

[luv2fly]

By the way...the guy out in Tempe sys hello!!

And the guys out in Atlanta are still giving the middle finger salute.

 

[Flufdriver]

And the guys out in Atlanta are still giving the middle finger salute.

I won't even respond to that...

 

[abe]

I guess the RED print means it's real important stuff...man, lay off the red ink already...hurts the eyes!! We get your point!! By the way...the guy out in Tempe sys hello!!

Sorry...I'm just a simple caveman and only recently figured out how to do the quote thingy!

Abe

 

[Baja4U]

And the guys out in Atlanta are still giving the middle finger salute.

I LIKE IT, GO HOT LANTA GO . Can I get a Delta pin for that???

 

[Flufdriver]

Sorry...I'm just a simple caveman and only recently figured out how to do the quote thingy!

Abe

Don't you just hate the quote "thingy"...looks like you got it!!!

 

[BottomFeeder]

http://www.sltrib.com/business/ci_4709403
Your second paragraph doesn't make sense to me. Boeing is in the business of selling airplanes. Why would they decide on one hand to turn down an offer that keeps one of their biggest customers in business (Parker's plan), but then a few months or weeks later, decide it's best to dissolve that same customer?

I'm not following the logic here....

Abe
[/quote]

Logic is that Boeing is booked for orders and in fact SWA asked Boeing for a addition to a current order and was told sorry. Now since SWA is such a good customer how can Boeing turn them away.

Boeing knows they have a good product and it will be sold.

You can say what you want but I put my money on Boeing getting the best deal for past debts first and then worry about the securing of orders secondly.

BTW Boeing has been courting US for some time about orders and this might be the added incentive to get US to place orders with them. Us has no ties to Airbus since the loan was paid in full and Boeing knows this.

 

[abe]

Boeing knows they have a good product and it will be sold.

You can say what you want but I put my money on Boeing getting the best deal for past debts first and then worry about the securing of orders secondly.

BTW Boeing has been courting US for some time about orders and this might be the added incentive to get US to place orders with them. Us has no ties to Airbus since the loan was paid in full and Boeing knows this.

Why does Boeing need to court anyone?? As you say above, "they have a good product and it will be sold."

We all have short memories around here...wasn't too long ago that people thought Boeing's Commercial Aircraft Division was on the ropes! Airbus came to the US and "gave" their planes away (not literally...except maybe to JetBlue ...but you know what I mean!)

Like Hillary, Delta "stood by her man" and a long term partnership was born. BTW, did you know that in 13 short months Delta will be the US launch customer for the 777LR??

http://news.delta.com/article_display.cfm?article_id=10431


You still haven't explained all of Parker's Airbus orders...especially the 350's that were ordered as payback for financial help during "Parker Merger #1" (see the links in my post above).

Is Parker going to take delivery of the dozens of Airbus on order (321, 330, 350 models) AND the dozens of Boeing aircraft on order?

Or is he going to have to back out of some of these jets?

I wonder which orders will be the easiest to cancel?

I wonder if Boeing execs have considered any of this?


Also, please explain the lawsuit that Boeing and US Airways were involved in back in the Wolf years....about the same time that Delta was ordering a gazillion dollars worth of Boeing aircraft:

http://www.secinfo.com/dWcTe.8n.htm

I had never seen this before and am curious what it's all about (and what the outcome was).


Abe

 

[Redbone]

You mean the deal where Ron Allen paid way too much, and got way too little (no SA or Asia routes)?

The deal that brought loads of debt, airplanes that are no longer even on the property, and dozens of routes that Delta no longer even operates?

The "prosperous" deal that helped Delta lose big money in the mid-90's and contributed to the furlough of thousands of Delta employees!

Is that the prosperous deal to which you are referring??
I thought you told us that the Delta employees have no power in this thing...which is it? (maybe the rally was worthwhile after all!)

Let's switch gears for a second. Pretend you are Boeing. One of your biggest customers (with hundreds of millions of dollars of future business already on the books) is the target of a hostile takeover by a carrier with huge ties to your biggest competitor.

And, lucky for you, you have a vote and can help decide if it happens or doesn't happen. Which way are you gonna vote, USA320?

Abe

The "deal" that prevented Delta from becoming an unsuccessful SWA. The "deal" that put Delta on the international map, and allowed it to reap the huge profits from Pan Am's Shuttle operation.

It was not Pan Am's fault that Delta didn't know how to operate an International Div. (just ask all the non foreign language speaking Delta Flight Attendants that were given SUPER seniority over PAA crews, so that they could fly those high paying International PAA routes).

Remember, Lockerbie was the nail that put PAA down. It's load factor prior, was higher than all U.S. majors.

Had PAA had the right management during the 1980's it would be the supreme juggernaut of the industry today...hands down. No airline in the world has had such a global route empire.

 

[DLFlyer31]

My understanding about the current deal is that Delta is still buying those -800's. [/color]

Sure, but if the leasing company takes the -800's and sells/leases them to XYZ carrier, then in the end Boeing is losing out. Instead of selling to two carriers, DL and XYZ, Boeing is now only selling to one, XYZ.

They have the orders already...why would they want to worry about the uncertainty of Parker cancelling them all for Airbus...despite what he's probably telling them?

Abe

Maybe because Parker wants this deal bad enough that he's willing to put in a huge Boeing order that will blow away anything DL by itself could or would buy.

 

[BottomFeeder]

about the same time that Delta was ordering a gazillion dollars worth of Boeing aircraft:

[Abe

abe

how many 0's are there in a gazillion?

The "deal" that prevented Delta from becoming an unsuccessful SWA. The "deal" that put Delta on the international map, and allowed it to reap the huge profits from Pan Am's Shuttle operation.

It was not Pan Am's fault that Delta didn't know how to operate an International Div. (just ask all the non foreign language speaking Delta Flight Attendants that were given SUPER seniority over PAA crews, so that they could fly those high paying International PAA routes).

Remember, Lockerbie was the nail that put PAA down. It's load factor prior, was higher than all U.S. majors.

Had PAA had the right management during the 1980's it would be the supreme juggernaut of the industry today...hands down. No airline in the world has had such a global route empire.

Yeah the Delta boys screwed this up so bad the almost bought the farm.

Then Delta renigged on the millions promised to Pan Am and watched them buy the farm.