US Airways/Delta Merger proposal

David747 · Post by **David747** » 15 Nov 2006, 13:10

US Airways made an $8 billion proposal to merge with Delta Airlines. This will be a big merger if it happens.

http://today.reuters.com/news/articlene ... -DELTA.xml

And if this happens, would US Airways replace Delta's fleet with Airbus airplanes, since, according to what I have read US Airways wants to adopt an all Airbus fleet. Cagey please comment

Post by **sn26567** » 15 Nov 2006, 13:34

Before the merger happens, Delta must first emerge from bankruptcy. Not a done deal!

David747 · Post by **David747** » 15 Nov 2006, 13:38

Delta's creditors hope that they atleast looked at this deal though.

cageyjames · Post by **cageyjames** » 15 Nov 2006, 14:08

Cagey looks out the window to see if any pigs are flying yet......

Our CEO is beloved by Wall Street, and there isn't that much overlap as Salt Lake, LAX, ATL fill holes. Still I've always thought NW is a better fit as our fleets are more similar, but I guess anything is possible.

My guess is nothing will come out of this.

cageyjames · Post by **cageyjames** » 15 Nov 2006, 14:15

OK, I guess that wasn't a widebody over my house this morning but a pig with wings.

US Airways "Official" Merger website

Some sexy video too

David747 · Post by **David747** » 15 Nov 2006, 14:35

I hope something comes out of this.

bits44 · Post by **bits44** » 15 Nov 2006, 14:41

If this deal comes to pass I hope they don't suffer the same problems that Air Canada and Canadian Airlines went through when they merged!

The seniority thorn is still firmly stuck in the side of all employees at AC.

A lot of bitterness still exists, and has not made life easy for those on both sides.

Hopefully these can be ironed out before the deal is signed.

cageyjames · Post by **cageyjames** » 15 Nov 2006, 14:53

What union US and non-union Delta might have problems?

So they spin off either Delta Shuttle or US Airways Shuttle? I'd assume Delta Shuttle gets the boot since Delta doesn't serve the BOS-DCA route (Delta only does LGA-DCA). I guess UA or AA would be in the market or maybe an independent company. Still I think these Shuttles are past their time.

cageyjames · Post by **cageyjames** » 15 Nov 2006, 14:56

The combined domestic route map.

US Airways/ Delta Combined Domestic Route Map

All 50 states and possibly the end to CLT as a hub. I'm sure all those old Piedmont folks will be unhappy about that. A friend at Delta says that they are worried about Salt Lake as PHX is probably the premier hub out west and given LAS, what is the point of SLC. Given that LAX is probably the priority, SLC will probably go the same way as CLT.

smokejumper · Post by **smokejumper** » 15 Nov 2006, 15:22

Now this is one merger that does not make sense. There are too many differences between the two airlines to make it successful.

- their fleets are not compatable
- there will be difficulty merging their union employees (seniority)
- In the case of their east coast hubs, either Atlanta or Charlotte (NC) will suffer heavily, as will either New York or Philadelphia
- the competitive siuation would suffer with two large carriers mareging; the Justice Department would probably not apporve any merger, unless many concessions are made

US Air (IMO) is still suffering from the merger of US Air and America West and I do not think this one will be any easier. Also, American is stilll swallowing the effects of its merger with TWA. These are not pretty pictures.

It seems to me that the onlly winners from this action would be lawyers and Wall Street speculators.

cageyjames · Post by **cageyjames** » 15 Nov 2006, 17:26

Doug Parker said this morning on the conference call that both ATL and CLT would remain (defensive I assume against B6 or WN). PHX, SLC and LAX were mentioned, but not LAS (I guess it becomes a "focus city" like LGA or DCA). The Delta Shuttle will be sold, but no mention of US/DL controlling both LGA and DCA where there are controlled landing slots.

US already operates a mixed fleet of Boeing/Airbus so I assume that isn't much of an issue (The MD-88s must go)

I'm guessing this is why UAL wants to go private. With US having so much cash on hand, they don't want to get eaten by US.

I'm thinking of becoming an Aircraft painter. Think of all the new colors the "new Delta" can put on their aircraft?

(US Airways, USAir (classic red), Piedmont, Allegheny, Mohawk, PSA, America West, Delta, Northeast Airlines, Western Airlines, PanAm (though I'm sure they don't own that trademark) and National Airlines)

cageyjames · Post by **cageyjames** » 15 Nov 2006, 19:36

The morning conference call has been posted on the US website.

http://tinyurl.com/yz88hk

Delta's response on their webiste:

http://news.delta.com/article_display.c ... e_id=10454

Of course with them being in bankruptcy, they have no choice if the creditors want this. Maybe they should have thought about this before going in.

TexasGuy · Post by **TexasGuy** » 15 Nov 2006, 19:39

If this thing happens it will be a disaster. Remember the US Air takeovers of the 1980's with PSA and Piedmont. Also if this happens, it will spell the end of CLT as a hub. It cannot compete with the juggernaut operation Delta has in ATL and they are too close to each other.

cageyjames · Post by **cageyjames** » 15 Nov 2006, 20:21

CLT will stay.

This is what I think:

Hubs:
LGA
CLT
ATL
CVG
PHX
SLC

Focus Cities:
LAS
DCA
PDX
PHL
FRA

International Gateway Cities:
JFK
LAX

Don't get me wrong, CLT will be hit, but I think they'll keep it running to keep B6 or WN out of the south. PHL will fall down with JFK and LGA (as well as CVG) putting pressure on it. PIT is dead now, CVG will be the midwest hub and LAS will get squeezed by SLC and PHX.

I think there will be a focus on JFK to Europe, ATL to South America and Africa and LAX to Asia. It isn't to say that there wont' be international flights from other hubs, but I think those are probably where the bulk will come from.

TexasGuy · Post by **TexasGuy** » 15 Nov 2006, 20:36

[quote="cageyjames"]CLT will stay.

This is what I think:

Hubs:
LGA
CLT
ATL
CVG
PHX
SLC

Focus Cities:
LAS
DCA
PDX
PHL
FRA

International Gateway Cities:
JFK
LAX

quote]

Interesting you keep CLT on your list for hub and make PHL a focus city. The economics O&D for PHL is much greater than that of CLT. I would think PHL would remain a hub and CLT gets the death nail. Of course they will not announce anything concrete at this stage considering they are seeking deals from the existing hub/focus cities.

cageyjames · Post by **cageyjames** » 15 Nov 2006, 20:46

I'm thinking that the JFK/LGA dynamic hurts PHL, at least from a hub perspective.

That and the city wants to give more to WN. I say let them have WM and move international to JFK. If PHL wants to be a hub, then they should be prepared to improve the facilities. I think LGA is a better fit given the amount of slots the new Delta would have.

TexasGuy · Post by **TexasGuy** » 15 Nov 2006, 20:54

cageyjames wrote:I'm thinking that the JFK/LGA dynamic hurts PHL, at least from a hub perspective.

That and the city wants to give more to WN. I say let them have WM and move international to JFK. If PHL wants to be a hub, then they should be prepared to improve the facilities. I think LGA is a better fit given the amount of slots the new Delta would have.

Dont forget BOS. Both carriers have a large presence there. The US facilities are much much better in BOS than the Delta terminal. I still cannot see them getting rid of the PHL hub with all of the O&D passengers you guys have there.

I will bet that if this happen you guys will keep the PHL hub, if i am wrong, you are welcome to come to Houston for some good Texas BBQ and cold beer, on me!!

;)

cageyjames · Post by **cageyjames** » 15 Nov 2006, 21:03

Well one man hub is another mans focus city!

David747 · Post by **David747** » 15 Nov 2006, 21:09

The thing that interests me about this whole talk is not only the routes that US Airways would acquire, but more importantly the future fleet of the company if the merger does indeed happen. As I have mentioned before, US Airways is planning to be an all Airbus fleet by 2010 I believe, and by acquiring Delta, they will acquire a company with 5 outstanding B777's on order. But, IMO, of course, I hope that Delta and US Airways do merge, that could help the American airline industry, but at the same time, it could hurt the companies involved, as Bits44 mentioned with Air Canuckistan and Canuckistan Airlines(Air Canada and Canadian Airlines for those who do not understand), after the two companies merged, Air Canuckistan had problems. Lets see what happens first.

TexasGuy · Post by **TexasGuy** » 15 Nov 2006, 21:23

The fleets shouldnt be too much of a problem. Delta is all Beoing and US has a mix of Boeing and Airbus, i think they can operate both nicely. I would think the smaller fleet types and older planes would be eliminated.