This is why a DAL merger won't happen.

[700UW]

Sections 1113 and 1114 were enacted after what Frank Lorenzo did to CO and their employees.

 

[Gilding the Lily]

And, you have inside information that the creditors' committee is gung-ho for this merger and interested in overturning the agreement with the pilots? You keep telling us in detail how it can be done, but you have yet to mention anyone who wants it done-- well, anyone who has standing in the BK court.

...

You have yet to give us a name, other than by supposition (i.e., the creditors' committee or DL management could do such and such or so and so.

Who exactly, with standing in the case, is going to do this?

Jimntx,

I am neither an insider or employed by a party that has "standing." And I have no information that would lead me to believe that, at the present time, DL (or the unsecured creditors' committee) is interested in seeking more concessions or to reject the current PWA.

Apparently I cannot say this enough, but perhaps repeating these things one more time will suffice: I think such a scenario is highly speculative, likely moot, highly unlikely, a nuclear-option, difficult, very infrequent, cautionary, strategic stretch, and likely unsuccessful.

But under all that, despite the fact that the scenario is so slight, it is still a mere possibility, which is the simple point that I was making. I have never inferred nor suggested that, at the present time, DL (or committee) wants to seek more concessions or reject the PWA.

Again, Bethune never said it was the best deal for DL or its creditors just that it COULD be a good deal.

Likewise, I suggest that such a scenario simply COULD be a possibility, however unlikely it may be.

 

[brokenwrench]

DEBT people is a four letter word for airlines.

The combined company will have more debt than AA. AA is not three companies trying to be one.

The Company (AA) reduced total debt, which includes the principal amount of airport facility tax-exempt bonds and the present value of aircraft operating lease obligations, to $18.4 billion at the end of the fourth quarter of 2006

http://biz.yahoo.com/prnews/070117/daw009.html?.v=90

 

[Gilding the Lily]

DEBT people is a four letter word for airlines.

The combined company will have more debt than AA. AA is not three companies trying to be one.
http://biz.yahoo.com/prnews/070117/daw009.html?.v=90

Wrench,

Do you, or anyone else, know what the optimal or standard debt/equity ratio is in the airline industry? I am not trying to be facetious, I just want that info if someone has it. I suspect that the optimal ratio has changed slightly since 9/11.

Knowing this ratio, which undoubtedly the Creditors' Committee is aware of, is a crucial factor in analyzing both the DL plan of reorganization and the US offer.

 

[BoeingBoy]

Lily,

I don't think there is such a thing as a "standard" debt to equity ratio. The airlines are pretty much all over the map, with WN probably being the least leveraged of the big airlines.

When you asked that question originally, I looked for a source of debt to equity info and couldn't find a single source for all the big airlines. Debt to capital is pretty easy to find, though different sources will give different numbers for the same airline (and why I wanted a single source for all).

The airlines are pretty much all over the map, with WN probably being the least leveraged of the big airlines.

Jim

 

[Gilding the Lily]

Lily,

I don't think there is such a thing as a "standard" debt to equity ratio. The airlines are pretty much all over the map, with WN probably being the least leveraged of the big airlines.

When you asked that question originally, I looked for a source of debt to equity info and couldn't find a single source for all the big airlines. Debt to capital is pretty easy to find, though different sources will give different numbers for the same airline (and why I wanted a single source for all).

The airlines are pretty much all over the map, with WN probably being the least leveraged of the big airlines.

Jim

Thanks Jim!

I looked around as well and couldn't find anything standard either, hence the question. I suppose I could take the average d/e ratio for each airline and attempt to create the 'model' d/e within a few standard deviation points. That would give me something to compare to the potential d/e ratio that would occur upon a US/DL deal... but that sounds like more effort than I am willing to put into it.

To be quite candid, I am a bit surprised that the industry (even with the heavy regulation in the past) has not composed a recent chart, available to the pubic, listing industry bench marks. Perhaps that ratio is just too fluid in the industry.

 

[autofixer]

Here are some benchmarks...

http://www.investor.reuters.com/Article.as...fscreeningmarke

I don't know if it is what you are looking for?

 

[brokenwrench]

You will not find any "ratio" out there. But you will find this if you look. When an airline is making money and doing well in regard to its peers you will find that it had a LOWER debt/equity ratio than other airlines at the time. DEBT KILLS.

 

[brokenwrench]

Reporting for the 4th quarter 2006 Southwest with about 9 Billion in debt has a debt/equity ratio in the 35% range.