Two For One Bankruptcy Special

[NewHampshire Black Bears]

Don't worry, Vikedog, when DL and NW obtain CASMs down in the neighborhood where WN lives, WN will be hurting. In fact, so will just about every other airline. Delta and NW control about 25% of the capacity in the industry and yet have very little overlap so there is little reason why the DOJ should block a merger. When you have a carrier that obtains CASMs around 8 cents and has a very decent presence in most of the top markets in the US and the world, WN and every other airline will be needing to refine their business plan.

Whether DL and NW rape and steal won't change the effect on competitors. Unlike UA and US that took years and still don't have CASMs anywhere close to LCC levels, DL and NW will move very quickly to execute their bankruptcies and will emerge as very tough competitors - either separately or together.

[post="300138"][/post]​

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Well "if" NW + DL are collaborating(already), I fear that DL would surface as the survivor, because of ALL the non-union work groups that they have.

The Pilots are both ALPA..........(Dovetail)

F/A's could possibly get "together" and form a new union.

AMT's (sadly) would vote Non union.

Ramp, same as AMT's, Non Union. (DL has more employees than NW)

Agents/Res, (same reason as the ramp) !!

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If this does come to "fruition", ya' gotta' wonder where this leaves Continental ????


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I wonder(also) if this will send AA + AS to the "alter" ???????????????

NH/BB's

 

[Dizel8]

Don't worry, Southwest isn't hedged for much longer. When they're paying what all of us are...OOOP's no $$$! JetBlue, is expected to report 3Q and 4Q losses. Gee, what happened to the so called perfect JetBlue?

[post="300290"][/post]​

Of course, AA will post a profit, right??

 

[jimntx]

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F/A's could possibly get "together" and form a new union.

NH/BB's

Doubt it. Think how many times the DL f/as have voted against a union. I know a couple of very senior DL f/as. They still think in the "proper young ladies with white gloves and every hair in place that the company will always take care of" mentality. The junior one has 36 years!

 

[ualdriver]

Don't worry, Vikedog, when DL and NW obtain CASMs down in the neighborhood where WN lives, WN will be hurting.

DL will NEVER get it costs down to the neighborhood of where WN lives, nor does it have to in order to be successful. I mean, maybe they could get them that low on Song with significant cuts AND with 300 seats in each of their 757's, but otherwise- ain't gonna happen.

In fact, so will just about every other airline. Delta and NW control about 25% of the capacity in the industry and yet have very little overlap so there is little reason why the DOJ should block a merger.

Sure, anything's possible.

When you have a carrier that obtains CASMs around 8 cents and has a very decent presence in most of the top markets in the US and the world, WN and every other airline will be needing to refine their business plan.

They probably would have to refine their business models. Fortunately for all of us hapless UA, AA, Continental, and US employees, that legacy hope and spoke carrier does not/will not exist. Unless you're talking average CASM excluding fuel. And if that's the case, it will probably end up being lower than 8. I'd guess in the upper 6's, lower 7's when it's all said and done. Then add fuel costs on top of that.


Whether DL and NW rape and steal won't change the effect on competitors. Unlike UA and US that took years and still don't have CASMs anywhere close to LCC levels

Nor could they (or any other legacy hub and spoke carrier) get their costs down that low even if they wanted to. Well, maybe if they paid every employee on the property minimum wage with no benefits they could swing it.....

DL and NW will move very quickly to execute their bankruptcies and will emerge as very tough competitors - either separately or together.

I don't know if they'll be any tougher than anyone else who's been through the bankruptcy "cost wringer" but hey, anything's possible.

 

[NewHampshire Black Bears]

Doubt it. Think how many times the DL f/as have voted against a union. I know a couple of very senior DL f/as. They still think in the "proper young ladies with white gloves and every hair in place that the company will always take care of" mentality. The junior one has 36 years!

[post="300382"][/post]​

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jimntx,

Your right, from a DL perspective, but if you factor in the pro union F/A's from NW, well things "could" get Interesting.

NH/BB's

 

[Borescope]

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jimntx,

Your right, from a DL perspective, but if you factor in the pro union F/A's from NW, well things "could" get Interesting.

NH/BB's

[post="300463"][/post]​

If they merge, and the DL FA's have no union representation, guess who's going to be bending over

 

[TheDog2004]

If they merge, and the DL FA's have no union representation, guess who's going to be bending over

[post="300476"][/post]​

Every time Delta has 'merged' with another airline they have broken the union. Here's how:

Delta's nonunion employees make more than the union employees at Northwest. If they were to merge then Delta would most likely be the surviving entity. The Northwest employees that are brought on continue to be unionized employees with a contract. Delta continues to honor the contract of the union employees but also continues to pay the Delta employees their rates (or even better - gives them raises that the union can't get until the contract is up for amendment). Northwest employees will decide to either remain with the union (making less AND paying union dues) or bail. All will bail for greener pastures.

That's what happened with Western at least.

 

[B.O.B.]

Every time Delta has 'merged' with another airline they have broken the union. Here's how:

Delta's nonunion employees make more than the union employees at Northwest. If they were to merge then Delta would most likely be the surviving entity. The Northwest employees that are brought on continue to be unionized employees with a contract. Delta continues to honor the contract of the union employees but also continues to pay the Delta employees their rates (or even better - gives them raises that the union can't get until the contract is up for amendment). Northwest employees will decide to either remain with the union (making less AND paying union dues) or bail. All will bail for greener pastures.

That's what happened with Western at least.

[post="300496"][/post]​

Analysts have already said if they merge, Northwest will be the surviving entity. So, yes all the non-union workers at DL would be stapled and placed at the bottom. The Pilots may get the shaft too.

If this ends up being the deal, tell us how Delta will bust the unions? Delta, is in worse shape then Northwest. Delta should have been in BK over 6 months ago.

 

[TheDog2004]

Analysts have already said if they merge, Northwest will be the surviving entity. So, yes all the non-union workers at DL would be stapled and placed at the bottom. The Pilots may get the shaft too.

If this ends up being the deal, tell us how Delta will bust the unions? Delta, is in worse shape then Northwest. Delta should have been in BK over 6 months ago.

[post="300504"][/post]​

The analysts are incorrect. On paper, I would be shocked if it is not Delta, even if Northwest is the stronger entity.

When Delta and Continental were talking about merging it was going to be Continental as the surviving entity even though Delta was the larger and stronger carrier. The reason was to get around the Northwest approval of the merger (which would have been necessary due to a previous agreement between NW and CO).

At any rate, it will be interesting to watch.

And I don't think any mechanics will be stapled considering both groups of mechanics are non-union.

 

[NewHampshire Black Bears]

Analysts have already said if they merge, Northwest will be the surviving entity. So, yes all the non-union workers at DL would be stapled and placed at the bottom. The Pilots may get the shaft too.

If this ends up being the deal, tell us how Delta will bust the unions? Delta, is in worse shape then Northwest. Delta should have been in BK over 6 months ago.

[post="300504"][/post]​

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B. O. B.

"IF" Grinstein and Steenland HAVE been "cooking up" a deal, I'd be shocked if DL(on paper anyway) were not the survivor,because of ALL the non union employees that they have, AND the many MORE employees they have vs the NW employees, should the combined group get together to vote on a union(ex: F/A's)

"IF" DL/NW are "cooking up " a deal, I hope NW IS the survivor, because one of my kids works for NW.

This is (hypothetically) A RARE oppertunity to combine 2 airlines this large, so logic says that "they'll" use every $$$$ oppertunity to their advantage.

I suspect that we'll know, perhaps in a few HOURS/days from now.


NH/BB's

 

[Ch. 12]

Although a NW-DL merger is VERY attractive for routes on paper, I can't help but to think back to the AA-TW merger that nearly sunk AA. They definitely took much more of a financial hit than expected and they (AA) were in a much better financial situation than either NW/DL.

 

[RowUnderDCA]

Although a NW-DL merger is VERY attractive for routes on paper, I can't help but to think back to the AA-TW merger that nearly sunk AA. They definitely took much more of a financial hit than expected and they (AA) were in a much better financial situation than either NW/DL.

[post="300521"][/post]​

I don't see how the routes make for an attractive merger on paper.

Doesn't it create a domestic system that is highly dependent on medium sized hub operations, further concentrating the respective carriers dependence on connecting leisure travellers. Granted NW has fortress hubs, but I don't think that that's a great pillar to stand on.

Almost any carrier other than UAL would benefit from merging with NW's pacific routes, but that doesn't really justify a merger, does it?

 

[WorldTraveler]

CH12,
Make no mistake, DL and NW have to restructure their own finances first. They could move through that process in 12-18 months but you won't hear anything about a merger for quite some time. I think you could see signs from either of them that they don't intend to stay independent such as rejecting leases on facilities that are key to their current route system or on so many aircraft that their current network cannot be sustained.

It really doesn't matter a whole lot who the "surviving" carrier is once you go through bankruptcy. The two pieces will have to be put together with outside help and with a whole new organization. It is doubtful that too many people from either management team will be present. It's also doubtful that there will be very many unionized workers and even they won't make much. The only thing that will be affected based on who "wins" is what name will be put on the planes and where the headquarters will be.

Typical survivor type questions such as how much one entity pays for the other doesn't matter when you're talking about bankrupt companies. Besides, General Electric is going to own the entire legacy segment of the airline industry.

 

[WorldTraveler]

row,
You are correct. I think you will see DL diversify very quickly away from connecting traffic in a reorganization. NW has alot harder time diversifying its domestic system because it does not have a strong presence in any non-hub cities where Delta has historically been strong in the Northeast and Florida in addition to its strength from those areas to its hubs.

 

[Ch. 12]

I don't see how the routes make for an attractive merger on paper.

Doesn't it create a domestic system that is highly dependent on medium sized hub operations, further concentrating the respective carriers dependence on connecting leisure travellers. Granted NW has fortress hubs, but I don't think that that's a great pillar to stand on.

Almost any carrier other than UAL would benefit from merging with NW's pacific routes, but that doesn't really justify a merger, does it?

[post="300533"][/post]​

You don't see? How about a strong East Coast presence mixed with a strong Midwest/West presence? Dump MEM and CVG and throw that capacity into point to point. And that is just domestic. More importantly...mix the largest Pacific carrier with the largest Atlantic carrier and you have a pretty damn good international route network. Where NW and DL have not been diversified (i.e. NW was reeling from SARS and whenever anything affects the southeast, DL feels the full brunt), the combined carrier would be the MOST diversified against changes in regional market conditions.

How can you not see how this looks, at least on paper, to be a perfect merger. With your logic, US/HP and AA/TW wouldn't make sense either. They were "good" on paper but a DL/NW would far eclipse even the AA/TW merger and would supercede AA as the world's largest carrier. Again, though, I am only saying on paper. I don't see meshing their finances and labor as a good thing.