Elevation
Veteran
- Oct 21, 2002
- 869
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Here 's the Link Click on 24 page presentation for the good stuff.
Looks like this game is just beginning.
Looks like this game is just beginning.
US Airways Strikes Back
- Thread starter Elevation
- Start date
ClueByFour
Veteran
- Aug 20, 2002
- 3,566
- 37
The game is done, unless and until the POR is rejected. Doogie has no move in the interim.
Second, the presentation is full of outright falsehoods. For instance, "completed airport integration at 37 of 38 overlap cities." BS. There are still two lines (CLT/PHL/PIT/etc and LAS/PHX) at many, if not most of these locations. Converted the website (not repeating the 10-Q statements of, in effect, "and f-d it up"). And so forth. To claim that "LCC management is experienced at integration" is the single funniest thing I've read this month.
That, and saying "US Airways prepared to address any antitrust issues" means zero if the DOJ simply says "no." Moreover, it's going to be tough to get creditors who have any skin in the game onboard if they plan on addressing the pilot block-hour issue by whacking express capacity.
In short, the LCC proposal is wholly unimpressive compared with the spin put out by Delta yesterday.
It's probably not going to happen. But it is interesting to watch the spinmeisters in the Sandcastle at work.
Second, the presentation is full of outright falsehoods. For instance, "completed airport integration at 37 of 38 overlap cities." BS. There are still two lines (CLT/PHL/PIT/etc and LAS/PHX) at many, if not most of these locations. Converted the website (not repeating the 10-Q statements of, in effect, "and f-d it up"). And so forth. To claim that "LCC management is experienced at integration" is the single funniest thing I've read this month.
That, and saying "US Airways prepared to address any antitrust issues" means zero if the DOJ simply says "no." Moreover, it's going to be tough to get creditors who have any skin in the game onboard if they plan on addressing the pilot block-hour issue by whacking express capacity.
In short, the LCC proposal is wholly unimpressive compared with the spin put out by Delta yesterday.
It's probably not going to happen. But it is interesting to watch the spinmeisters in the Sandcastle at work.
Mr Eagle
Senior
Directed to Cluebyfour,
The game is done, unless and until the POR is rejected. Doogie has no move in the interim.
Second, the presentation is full of outright falsehoods. For instance, "completed airport integration at 37 of 38 overlap cities." BS. There are still two lines (CLT/PHL/PIT/etc and LAS/PHX) at many, if not most of these locations. Converted the website (not repeating the 10-Q statements of, in effect, "and f-d it up"). And so forth. To claim that "LCC management is experienced at integration" is the single funniest thing I've read this month.
That, and saying "US Airways prepared to address any antitrust issues" means zero if the DOJ simply says "no." Moreover, it's going to be tough to get creditors who have any skin in the game onboard if they plan on addressing the pilot block-hour issue by whacking express capacity.
In short, the LCC proposal is wholly unimpressive compared with the spin put out by Delta yesterday.
It's probably not going to happen. But it is interesting to watch the spinmeisters in the Sandcastle at work.
[/quote]
Directed to Cluebyfour,
Tell All Of US on This Board,What Airline's Have You Merged In Your Many Year's In The Aviation Industry?
The game is done, unless and until the POR is rejected. Doogie has no move in the interim.
Second, the presentation is full of outright falsehoods. For instance, "completed airport integration at 37 of 38 overlap cities." BS. There are still two lines (CLT/PHL/PIT/etc and LAS/PHX) at many, if not most of these locations. Converted the website (not repeating the 10-Q statements of, in effect, "and f-d it up"). And so forth. To claim that "LCC management is experienced at integration" is the single funniest thing I've read this month.
That, and saying "US Airways prepared to address any antitrust issues" means zero if the DOJ simply says "no." Moreover, it's going to be tough to get creditors who have any skin in the game onboard if they plan on addressing the pilot block-hour issue by whacking express capacity.
In short, the LCC proposal is wholly unimpressive compared with the spin put out by Delta yesterday.
It's probably not going to happen. But it is interesting to watch the spinmeisters in the Sandcastle at work.
[/quote]
Directed to Cluebyfour,
Tell All Of US on This Board,What Airline's Have You Merged In Your Many Year's In The Aviation Industry?
longing4piedmont
Veteran
- May 19, 2003
- 1,291
- 6
Piney
The DL valuation was the same method as was used when HP bought US. The only big difference in this deal is that the DL valuation is using more conservative numbers. But just like usual the koolaid crowd doesn't want to take the time to read and understand. They would rather cut and paste, and in case of certain pilots, multiple times.
A few key points from the presentation:
DL's valuation has them worth the value of AA and UA combined. I'm sure there is a lot of rolling of the eyes amongst the creditors.
One of DL's biggest criticisms of the US plan was the 23 billion dollars in debt the new company would have. They compared that to their lower total debt but forgot, or possibly on purpose failed to mention that the US proposal will realize a much larger airline and thus will have more debt, as well as revenue and expenses. Doug said, of course we will have more debt, we'll also have a bigger fuel bill. He also pointed out the debt ratio on the US plan is lower than the debt ratio for the DL plan.
I think the wish for DL to stand alone is dead, if they don't want to merge with US, they need to find another partner fast.
BTW, I am a US employee and already make more than my counterparts at DL, so I will not get a raise if this goes thru but the DL people doing my same job will get a raise to bring them up to my level.
DL's valuation has them worth the value of AA and UA combined. I'm sure there is a lot of rolling of the eyes amongst the creditors.
One of DL's biggest criticisms of the US plan was the 23 billion dollars in debt the new company would have. They compared that to their lower total debt but forgot, or possibly on purpose failed to mention that the US proposal will realize a much larger airline and thus will have more debt, as well as revenue and expenses. Doug said, of course we will have more debt, we'll also have a bigger fuel bill. He also pointed out the debt ratio on the US plan is lower than the debt ratio for the DL plan.
I think the wish for DL to stand alone is dead, if they don't want to merge with US, they need to find another partner fast.
BTW, I am a US employee and already make more than my counterparts at DL, so I will not get a raise if this goes thru but the DL people doing my same job will get a raise to bring them up to my level.
BoeingBoy
Veteran
- Nov 9, 2003
- 16,512
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- Banned
- #6
If you look closely at the US "analysis", they compare DL's valuation to the market capitalization of the other carriers. Makes DL's valuation look out of whack, but is an apples to oranges comparison.
For a more apt comparison, look at enterprise value which is widely available:
AA $15.74 Billion
UA $12.1 Billion
WN $11.71 Billion
DL $10.74 Billion
CO $6.71 Billion
US $5.61 Billion
That gives a little different perspective than the US presentation based on market cap except for DL:
WN $12.10 Billion (market cap)
DL $9.4 - 12 Billion (valuation)
AA $6.50 Billion (market cap)
US $4.88 Billion (market cap)
UA $4.73 Billion (market cap)
CO $3.72 Billion (market cap)
Jim
Yeah, but the heart of the matter is that the US offer is 50% Cash now, while the DAL valuation is a prediction of future value.
As for Merger skill, cannot really remember a single merger that went off flawlessly. So finding fault with the US/HP one is not a deal breaker.
As for dropping Express capacity, hard to find many opponents of that, except maybey for Bombardier... If Mesa is already cutting deals to send it's RJ's to fly around China, then even Bombardier probably sees the writing on the wall.
The missing part of the equation is exactly how much U plans to offload to make the deal. One of the Shuttles is a given, as would be gates to low cost carriers in the hubs and Focus cities. Give away too much though, and that decreases value and increases job losses.
Like I said before, if a solid enough case can be made that airlines like Southwest or AirTran are going to grow as a result of this deal (and they would) and offer serious competiton in the domestic market,... Then the chances of this passing review are greater than many would assume.
As for Merger skill, cannot really remember a single merger that went off flawlessly. So finding fault with the US/HP one is not a deal breaker.
As for dropping Express capacity, hard to find many opponents of that, except maybey for Bombardier... If Mesa is already cutting deals to send it's RJ's to fly around China, then even Bombardier probably sees the writing on the wall.
The missing part of the equation is exactly how much U plans to offload to make the deal. One of the Shuttles is a given, as would be gates to low cost carriers in the hubs and Focus cities. Give away too much though, and that decreases value and increases job losses.
Like I said before, if a solid enough case can be made that airlines like Southwest or AirTran are going to grow as a result of this deal (and they would) and offer serious competiton in the domestic market,... Then the chances of this passing review are greater than many would assume.
BoeingBoy
Veteran
- Nov 9, 2003
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If that bolded part were true, I'd give you the point. However, nobody is offering to settle unsecured claims for cash now.
US is offering about 25 cent per dollar of estimated calims at some point in the future - I don't have a date, do you?
US is also claiming to offer about 25 cents per dollar of estimated claims at in stock at some point in the future - I don't have a date or value for the US stock at that point, do you?
DL is claiming to offer 63-80 cents per dollar of estimated claims in stock at some point in the future.
So the unsecured creditors have to decide which they think will give - at some point in the future - the greatest value. Some cash at the risk of waiting longer to get it, especially considering the anti-trust issues. Or stock of some value possibly sooner with no DOJ process needed. Pretty basic risk/reward analysis....
Jim
USA320Pilot
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- May 18, 2003
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It “will be very difficult for Delta to show a higher stand-alone value for the company than that which is achievable under consolidation.†- J.P. Morgan analyst Jamie Baker, Globe and Mail/ Wall Street Journal, Dec. 22
Regards,
USA320Pilot
Regards,
USA320Pilot
Point granted Jim, but still just rewording of the same choice for the creditor/investors. Something now vs. a possible valuation later. That's why I put this at 50/50 odds, because it is a real decision for the creditors to make.
I think both sides are full of poop in what values they claim, but it is up to the creditors to decide which spin smells less, not us.
So like I said before, if the money is really there, a deal will get done.
Curious Jim why you think the DOJ might be such a roadblock, if one were to use the past history of consolidation in the railroad and trucking industries as a benchmark...?
I understand that consumer advocates (and the politicians playing up to them) might voice greater concern over the cost of an airline ticket vs shipping freight, but public outcry seems to have had little effect on goverment policy regarding a variety of issues from immigration to health care to... (do I need to go on...?).
I'm not saying this is a done deal already, rather than this deal is (and will always be) in the hands of the Money Men, and if they want to make it happen, then it will likely become a reality.
I just dont see anything else having a real effect, other than those who stand to make a profit off of this, deciding which plan profits them more.
I think both sides are full of poop in what values they claim, but it is up to the creditors to decide which spin smells less, not us.
So like I said before, if the money is really there, a deal will get done.
Curious Jim why you think the DOJ might be such a roadblock, if one were to use the past history of consolidation in the railroad and trucking industries as a benchmark...?
I understand that consumer advocates (and the politicians playing up to them) might voice greater concern over the cost of an airline ticket vs shipping freight, but public outcry seems to have had little effect on goverment policy regarding a variety of issues from immigration to health care to... (do I need to go on...?).
I'm not saying this is a done deal already, rather than this deal is (and will always be) in the hands of the Money Men, and if they want to make it happen, then it will likely become a reality.
I just dont see anything else having a real effect, other than those who stand to make a profit off of this, deciding which plan profits them more.
BoeingBoy
Veteran
- Nov 9, 2003
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Which is what I was pointing out - nothing now in either plan. Some value later in both plans, amount unknown now.
Although what US put out - an apples to oranges comparison - probably has more poop as of now. As much as USA320Pilot talks about what DL management is supposed to be hiding, what is US hiding - no 5 year plan, no financial analysis, etc. Just a very general proposal. The only thing concrete is the $4 Billion in cash - to be paid out at some point.
I don't claim to be an "expert", but even I can see the holes in the US argument. Whether that'll cause a little or a lot of heartburn for the DOJ is anybody's guess at this point. Hasn't stopped some from declaring it's settled one way or the other though.
I have absolutely no idea what will happen. I feel reasonably confident that DL won't end up fragmented, other than whatever get's spun off in a merger (there's the "fragmentation" risk). On the cost side, DL has done a good job in BK, with a CASM about the same as HP and well under US (East) despite our 2 BKs.
Jim
Do you really think Parker is that naive to present a Detailed Plan before analyzing both the DL Restructuring Plan AND the Due Diligence materials? US doesn't have to provide anything until they formally present an alternative to the DL Restructuring Plan, which they cannot (shouldn't) do until they view the details of Delta's operations (Due Diligence). In my estimation, Parker, etal. have been doing an excellent job of not exposing their final strategy for this takeover.
SoftLanding
Senior
- Jul 25, 2005
- 255
- 1
One thing is for sure, this thing is about to slip out of Parker's grasp...
Why else would they go to the trouble of having a conf call a couple of days before Christmas?!!!
Why else would they go to the trouble of having a conf call a couple of days before Christmas?!!!
oldiebutgoody
Veteran
- Aug 23, 2002
- 2,627
- 945
I wouldn't be too concerned until another bidder makes themselves known. If the valuation LCC put on Delta were low, you'd think that another bidder would appear. Hasn't happened, even with the fears of an industry consolidation. That's gotta be a factor in the minds of the creditors, plus the fact that the only way to make anybody any money in this industry is going to be consolidation. If it doesn't happen soon, the industry will continue to limp along until the next round of chapter 11s. Unless, of course, the government just gives in and sells the whole industry to overseas operators.
