Did you guys read about the bid of 8 billion? what do you think of it?
I have friends that work for delta, I feel bad for him. I alsi think that if that happens, it will create a “war” with the others airlines. Not sure i like the idea…
The news reported the US Airways offer this morning but also reported that Delta was cool to the idea.
US Airways will pay $8 billion, then in a few years (months) start crying to the Federal government to bail them out.
I’ll never forget what happend on 9/11. The big players in the airline industry were practically bankrupt and some in reorganization when 9/11 occurred. Within weeks, the CEO of Continental jumps on T.V to plead for government bailouts because “9/11 has crippled our industry.”
It was a joke, they played the victim card and the government jumped right in.
If the airline industry has so many bankrupt companies, it means there are too many so they shouldn’t be bailed out. I’m all for AA buying Delta but they have to be warned that the government will not prop them up when the going gets tough.
(wow! What’s this?? the advanced editor - on a MAC???)
I like Delta, and unfortunately I can’t say I’m all that fond of US-Scareways… so I’m not too keen on the merger. But I guess it’s better than no Delta at all…
Of course, the other poster is right… in a few years USAir will be begging the gov’t for a bailout after this…
It’s going to come down to Delta trying to prove that this is a bad deal for its creditors…Which it really isn’t, for the creditors anyway.
What it really does is open the door for other interested parties.
It’s big news here in Tempe since the US Airways HQ is 4 blocks from me. I think it is the first salvo in the consolidation of the airline industry, which is good for them since so many of them are struggling, but bad for your ticket prices. It can only mean less flights and less jobs for the employees, but I guess if they survive the consolidation they may have a healthier employer. Hmmm, kind of reminds me of my own job.
I fly Delta a lot…all in all have received pretty good service and they treat me quite well as a frequent flier.
This offer from USAir will most likely bring out other bidders who want Delta. United has stated that they will not be left out of the consolidation of the industry which is long overdue. USAir and Delta are big on the East coast and have a lot of overlapping routes and hubs. Coupled with the regulatory hurdles that this specific merger would entail it looks like a good deal on paper but has holes.
Now a United/Delta merger would be a powerful combination. United is big in the West and Asia. Delta strong in the West and Europe. Less overlap of routes and planes. Both United and Delta use Boeing vs. USAir which is mostly Airbus. Higher maintenance costs if you have a mixed fleet.
There’s also rumors of a Northwest Air/Continental/Delta merger of any of those three.
My guess is consolidation will happen and my bet is United will court Delta at a higher/better offer.
You know this sounds very familiar as there was a point in time when United Airlines was the nations largest air carrier in part due to gradual expansion and acquisition of smaller companies. Now United is in bankruptcy and after 20, 30, even 40 years of service, company retirees who helped make United what it was, are now left wondering what happened to their pension plans? Okay, so here comes US Airways - aka America West - who is also in bankruptcy not to mention that it was not too long ago that many industry analysts suggested it would be better to cut and run and liquidate the company assets. There is a reason why American, Delta, Continental, NorthWest, United Airlines, and US Airways are referred to in the industry as ‘legacy’ carriers! Actually I am not seeing how the money managers can find any confidence in an offer of 4 billion in loan guarantees combined with 4 billion in stock for a company that only 18-months ago was trading for a handful of pennies. While I certainly do not want to see Airwasy, Delta, Northwest, or United go under - competition is good for the traveling public - but it seems obvious to me thatn an industry that demands lower and lower operating costs in order to be profitable, there are simply too many players in the market and merging 2 or more airlines into one mega airline is not the answer.
It was a joke, they played the victim card and the government jumped right in.
That seems to be the standard modus operandi of the government nowadays.
I watched the US Airways CEO going on about synergies on Bloomberg. It is starting to look more like a hostile takeover. The end result will probably be the world’s largest bankrupt airline.
This is a total hostile takeover bid made directly to Delta’s creditors. This offer was in no way made to Delta management which has repeatedly said “no” to selling the airline. So USAirways figured that by going to the Delta creditors while in bankruptcy, this was the best time to try it. Most creditors only get back ten cents on the dollar from bankrupt companies. The $8 billion in cash and stock was something like thirty cents on the dollar from what I believe I read. An interesting approach to gobble up a bigger, financially-strapped competitor.
One interesting note: Most of Delta’s planes are Boeing. Most of USAirways are Airbus. Combining the two would save a whole lot in staffing, maintenance and they wouldn’t gain any purchasing power in terms of parts.
One interesting note: Most of Delta’s planes are Boeing. Most of USAirways are Airbus. Combining the two would save a whole lot in staffing, maintenance and they wouldn’t gain any purchasing power in terms of parts.
I agree with you about the creditors. I think that was the game plan. Now I don’t understand how they would save money by have combo boeing and airbus. I read about the opposite. you need more skilled people, more maintenance, just more hassle. there is a reason why (well many)that southwest is low cost, they only have one type.
I have a boat load of skymiles saved up (300k). Should I start planning that long postponed family trip to Rome?
It might make sense to keep up with what’s happening but no matter what happens 300k miles in the bank for any frequent flyer program is probably too much. I’d burn some of it down so that they aren’t lost.
If this merger were to go through it’s likely your miles would still be good. No airline buying another wants to lose its best customers so they honor the others program miles.