From CNN...

US Airways makes offer to buy Delta Air Lines for $8 billion in cash and stock once Delta emerges from bankruptcy, AP reports.

I'm watching the news right now on Squawkbox. US proposes to buy Delta with $4 billion in stock and $4 billion in cash.

US airlines have proven bigger isn't always better. Just bigger debt and bigger problems.

Delta don't do it!!!

I'm watching the news right now on Squawkbox. US proposes to buy Delta with $4 billion in stock and $4 billion in cash.



Hmmmm...and its not even April 1!


I wonder how this would work with the *A?

I wonder how this would work with the *A?



It wouldn't. UA has the juice there and wouldn't allow it. Too much overlay. Besides, Delta, which would be the name of the combined entity, is SkyTeam.

Good for me, I have switched 70% of my travel over to the skyteam. Maybe the UA E+ ban for US couldve told us the future????

But as for the *A, DL is not in UA hubs heavily. Why would UA care, they would get more strength in the ATL, SLC, and Europe through codeshare. Just my 2cents.

Delta was my primary carrier before i moved to AZ and still to this day remains my favorite, I would love to see this happen purely on the hopes that US could learn what real service is from Delta. Just think about it, transcon widebody service.

At first glance this sounds like a flying version of Conrail, the fusion of multiple bankrupt railroads in the Northeast in the 1970s.

Here's the press release:


US Airways Proposes to Merge With Delta
Transaction Valued at Approximately $8.0 Billion in Cash and Stock

Provides 25 Percent Premium to Current Trading Price of Delta's Prepetition
Unsecured Claims

Merger Expected to Generate $1.65 Billion in Annual Synergies

Consumers Will Have the Advantages of a Larger, Full-Service Provider With the
Cost Structure of a Low-Fare Carrier
TEMPE, Ariz., Nov. 15 /PRNewswire-FirstCall/ -- US Airways Group, Inc. (NYSE: LCC) announced today that it has made a merger proposal to Delta Air Lines, Inc. (OTC: DALRQ) under which both companies would combine upon Delta's emergence from bankruptcy. The proposal would provide approximately $8.0 billion of value in cash and stock to Delta's unsecured creditors. Delta creditors would receive $4.0 billion in cash and 78.5 million shares of US Airways stock with an aggregate value of approximately $4.0 billion based on the closing price of US Airways' stock as of Nov. 14, 2006.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO )

The combination of US Airways and Delta would create one of the world's largest airlines and would operate under the Delta name. Customers would benefit from expanded choice as well as the reach and services of a large-scale provider within the cost structure of a low-fare carrier. As a combined company, the "New" Delta would be the number one airline across the Atlantic and the second largest airline to the Caribbean. The New Delta would reach more than 350 destinations across five continents, including North and South America, Europe, Asia and Africa. In the U.S., the combination would create a leading competitor in the Eastern U.S. and an enhanced position in the Western U.S. The combined company would be the number one airline at 155 airports. The New Delta would also be uniquely positioned to compete with low cost and legacy carriers.

US Airways' proposal represents a 25 percent premium over the current trading price of Delta's prepetition unsecured claims as of Nov. 14, 2006 (40 cents/dollar), assuming that there will ultimately be $16.0 billion of unsecured claims. The proposal also represents a 40 percent premium over the average trading price for Delta unsecured claims over the last thirty days.

US Airways believes that the combination will generate at least $1.65 billion in annual synergies, including $935 million in network synergies, predominantly from optimization of the airlines' complementary networks, including rationalization of network overlap, which will result in a 10 percent reduction of the combined airlines' capacity, reducing unprofitable flying and improving the mix of traffic. In addition, $710 million in net cost synergies will be achieved by combining facilities in overlap airports and eliminating redundant systems and overhead. Significantly, the opportunity to generate more than half of these synergies could be lost if a merger is delayed until after Delta emerges from bankruptcy. The merger is expected to be accretive to US Airways' earnings in the first full year after completion of the merger.

US Airways Chairman and Chief Executive Officer Doug Parker stated, "We believe that the combination of US Airways and Delta, like the US Airways / America West merger we completed in September 2005, is extremely compelling and will create significant value for each of our stakeholders. The combined company will be a more effective and profitable competitor in the current fragmented marketplace, with the ability to better meet the continuing evolution of the airline industry. We will be flying under the Delta brand name, which is recognized around the world.

"Delta creditors will receive significantly greater value under this proposal than they would under any standalone plan for Delta. US Airways shareholders and Delta creditors will benefit from the significant upside potential of the combined company through their respective ownership stakes.

"Even with a 10 percent reduction in capacity, all existing U.S. destinations served today by US Airways and Delta will remain part of the new, improved network. Consumers will have the advantages of a larger, full-service airline with the cost structure of a low-fare carrier, and the communities we serve, as well as those Delta serves, will have access to a wider range of network options. More than ever, the New Delta will be able to connect our customers to the people and places they want to visit.

"All of the employees of the New Delta will benefit from working for a larger and more competitive airline. As we demonstrated during our US Airways / America West merger, long-term job security for employees in our industry results from sound economics and a healthy business able to compete in our changing marketplace," Parker concluded.

The New Delta will create a more comprehensive global route network that will provide more choice for travelers and attract new customers to key markets. In addition, many travelers have already benefited from the US Airways / America West merger. Since the merger, US Airways has lowered leisure fares in nearly 350 markets with discounts ranging from 10 percent to 75 percent (an average reduction of 24 percent within those markets). US Airways has also lowered business fares in nearly 400 markets during the same period with reductions ranging from 10 percent to 83 percent (an average reduction of 37 percent within those markets).

Paul Reeder, President of PAR Capital Management, US Airways' largest shareholder, said, "We enthusiastically support this transaction, which we believe offers the opportunity to build upon US Airways' current competitive position. We have confidence in the US Airways management team, the $1.65 billion in identified synergies, and the potential upside for US Airways shareholders."

Below is the text of the letter that US Airways sent to Gerald Grinstein, Delta's Chief Executive Officer.


November 15, 2006
VIA FACSIMILE
Mr. Gerald Grinstein
Chief Executive Officer
Delta Air Lines, Inc.
Atlanta, GA 30320-6001

Dear Jerry:
Last Spring we had a conversation about a potential merger of US
Airways and Delta. As you know, following that conversation, I sent you
a letter on September 29, 2006, outlining our thoughts about a
transaction, describing the significant benefits that could be achieved
for both of our respective stakeholder groups from this type of
transaction, and proposing to meet with you and your team to work together
to further consider and develop our proposal. I was disappointed that you
declined to meet or even enter into discussions in your letter of
October 17, 2006. Because the benefits of a merger of US Airways and
Delta are so compelling to both of our companies' stakeholders, we believe
it is important to inform them about our proposal. Therefore, we are
simultaneously releasing this letter to the public.
The Board of Directors and management team of US Airways believe that
a combination of Delta and US Airways presents a significantly greater
value for Delta's creditors, customers, employees and partners than a plan
to emerge from bankruptcy on a standalone basis. We also believe that,
unless we act quickly to pursue a combination through the actions that can
be taken during Delta's bankruptcy process, our respective stakeholders
will not be able to realize what we believe are substantial economic
benefits from such a combination.

Merger Proposal. We propose a merger of Delta and US Airways in a
transaction in which Delta prepetition unsecured creditors would receive
$4.0 billion in cash plus 78.5 million shares of US Airways' common stock.
Based upon the closing price of US Airways' common stock of $50.93 on
November 14, 2006, the equity component represents a value of
approximately $4.0 billion. As a result of this transaction, immediately
following the merger, Delta unsecured creditors would own approximately
45 percent of the combined company.
This proposal represents an aggregate of approximately $8.0 billion in
value to Delta's prepetition unsecured creditors, before taking into
account realization of any of the significant additional value from the
synergies we believe are achievable. Even prior to the realization of any
synergy value, this proposal represents a 25 percent premium over the
current trading price of Delta's prepetition unsecured claims as of
November 14, 2006 (40 cents/dollar), assuming that there will ultimately
be $16.0 billion of unsecured claims. The proposal also represents a
40 percent premium over the average trading price for Delta unsecured
claims over the last thirty days. We believe that this proposal, which is
based on publicly available information, fully values Delta.

Synergy Value. What makes this proposal most compelling for both
Delta creditors and US Airways shareholders are the significant synergies
that we believe can be readily achieved in this proposed transaction. We
have preliminarily identified annual network and cost synergies in excess
of $1.65 billion, which at a median industry EBITDAR multiple of
5.0x translates into approximately $8.3 billion of additional value
creation. This is value that neither of our teams, no matter how well
managed, could create independently. Under the combination, these
synergies would be shared by Delta creditors and US Airways shareholders
in proportion to their initial ownership in the combined company.
The synergies would be generated only through an appropriately timed
transaction, and under our current analysis we believe would be as
follows:

* Approximately $710 million would be realized through expense
reductions. The largest savings would be in consolidation of
information systems, reduction of overhead and consolidation of
facilities. Additional savings are expected through lower distribution
costs and renegotiation of our collective contracts with vendors.
Based upon our experience and synergies achieved with the merger of
US Airways and America West, we believe this estimate is conservative.

* Another $935 million would be realized through network rationalization
synergies. Network rationalization savings would be generated by
managing the combined networks to ensure that the combined fleet size
is better matched to passenger demand. Network synergies would also
arise from better serving our current customers, and by increasing our
competitive presence, attracting new customers and corporate accounts
in markets where neither carrier today is a significant competitor.

In our US Airways/America West merger, we preliminarily identified
approximately $250 million in potential annual cost synergies that we
believed could be realized in that transaction. After having successfully
completed that transaction over a year ago, we have now identified over
$300 million in cost synergies, outperforming our expectations.
Year-to-date, US Airways' RASM is up 17.1 percent versus the industry
being up 9.1 percent, which translates into $425 million in network
synergies already this year. Accordingly, we have a high level of
confidence that we can achieve at a minimum the synergies that we have
identified in a potential Delta / US Airways merger.
Our analysis presumes that a merger would proceed in the same fashion
as the US Airways / America West transaction, with the closing in
conjunction with Delta's emergence from bankruptcy. As I have previously
indicated to you, if we model a merger of our companies after Delta
emerges from bankruptcy standalone, our synergy estimates are cut in half.
We do not believe that simply allowing that potential value to evaporate
is in the best interests of any constituency.

Financing and Structure. We have obtained a financing commitment from
Citigroup to provide $7.2 billion in new financing for this transaction.
This funding would be utilized to refinance Delta's debtor-in-possession
credit facility, refinance US Airways' existing senior secured facility
with GE Capital, and provide the funding for the $4.0 billion cash portion
of our offer. All other allowed secured debt and administrative claims
would be assumed or paid in full.
Preliminarily, we would intend to follow the model used successfully
in the US Airways/America West merger for this transaction. We would, of
course, seek to structure the transaction in a tax efficient manner for
our respective stakeholders, maximizing Delta's net operating loss
carryforwards.

Integration. Our proposal contemplates the creation of the leading
global airline operating under the "Delta" name and brand. To streamline
our operations and capitalize on potential synergies, we would expect to
develop together an integration plan, and identify areas in which
efficiencies can be maximized, including appropriate rationalization of
operational centers.

Regulatory Matters. We have worked with antitrust counsel to analyze
this transaction and believe that any antitrust issues can be resolved.

Labor Matters. We believe that this transaction is in the best
interests of the employees of US Airways and Delta because of the strength
and stability of the company that the transaction will produce. Also, we
expect that we would move to the highest of the existing labor costs in
every group. Because the wage rates for Delta and US Airways employees
are not markedly different, we do not anticipate that this action will
have a material negative impact, and that fact has been included in our
analysis. Similar to the US Airways / America West merger in which there
were no furloughs of mainline operating group employees, our current model
does not assume furloughs of employees in the mainline operating groups.

Conditions. Our proposal is conditioned on satisfactory completion of
a due diligence investigation, which we believe can be completed
expeditiously. In addition, the proposed transaction would be conditioned
on the bankruptcy court's approval of a mutually agreeable plan of
reorganization that would be predicated upon the merger, regulatory
approvals and approval of the shareholders of US Airways. Given our
analysis to date, we are confident that our joint efforts would result in
satisfaction of these conditions and a successful combination of our
companies in a timely manner.

This proposal presents an opportunity for Delta creditors to receive
significantly higher recoveries than they can receive under any standalone
plan for Delta. It is also an opportunity for US Airways shareholders to
benefit from the significant upside potential of the combination.
Consumers will benefit from expanded choice as well as the reach and
services of a large-scale provider within the cost structure of a low-fare
carrier. Our employees will benefit from a more competitive employer and
our willingness to adopt highest common denominator employee costs.
As I expressed to you previously, I understand that you and your team
have worked extremely hard on your own restructuring, and greatly respect
all that you have accomplished to make Delta a healthy, viable airline.
We simply believe that a combination with US Airways will produce even
more value for your creditors and our shareholders, and that this is a
unique opportunity to create an airline that is even better positioned to
thrive long into the future, whatever that future might bring to the
industry, greatly benefiting our employees and customers.
We and our advisors, Citigroup Corporate and Investment Banking and
Skadden, Arps, Slate, Meagher & Flom LLP, are ready to commence due
diligence and to negotiate definitive documentation immediately, and
request that you agree to work with us so that this alternative to your
standalone plan can be quickly and fully developed. We are prepared to
meet with you, Delta's Board, Delta's Official Committee of Unsecured
Creditors, and any major Delta creditor or other stakeholder, to achieve
this outcome. I believe we owe it to our respective stakeholders to
pursue this opportunity vigorously.

I look forward to hearing from you soon.

Respectfully,

/s/ Doug Parker


US Airways has committed financing from Citigroup for the proposed transaction for $7.2 billion, representing $4.0 billion to fund the cash portion of the offer and $3.2 billion in refinancing at both companies.

The US Airways proposal is conditioned on satisfactory completion of a due diligence investigation, which the Company believes can be completed expeditiously, approval by Delta's Bankruptcy Court of a mutually agreeable plan of reorganization that would be predicated upon the merger, regulatory approvals, and the approval of the shareholders of US Airways. US Airways believes that this process could be completed in the first half of 2007.

Citigroup Corporate and Investment Banking is acting as financial advisor to US Airways, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as primary legal counsel, with Fried, Frank, Harris, Shriver & Jacobson LLP as lead antitrust counsel to US Airways.

US Airways executives will be discussing the proposal with analysts and investors on a conference call at 8:15 a.m. ET / 6:15 a.m. MT today, Nov. 15, 2006. To access the conference call, please dial 866-290-0880 (U.S. dial-in) or 913-312-1228 (international dial-in) beginning at 8 a.m. ET / 6 a.m. MT and ask to be connected to the US Airways conference call (conference ID# 4396188). A replay of the call will be available until Nov. 17, 2006 by dialing 888-203-1112 (U.S. dial-in) or 719-457-0820 (international dial-in) (conference ID# 4396188). Accompanying slides will be available on US Airways' website, www.usairways.com. The Company will also webcast the call to all interested parties through its website at www.usairways.com. Click "About US >> Investor Relations >> Webcasts/Presentations/Updates."

US Airways executives will also be presenting at the Citigroup Transportation Conference today at 9:35 a.m. ET / 7:35 a.m. MT, and the webcast will be available at www.usairways.com. To access the presentation, click About US >> Investor Relations >> Webcasts/Presentations/Updates.

B-roll footage of US Airways can be accessed from 06:00 a.m. to 09:00 a.m. ET at :

Satellite: AMC1
Transponder: 9
Band: C Analog
Downlink Frequency 3880 Horizontal
Orbital Slot: 103 Degrees West

US Airways is the fifth largest domestic airline employing nearly 35,000 aviation professionals worldwide. US Airways, US Airways Shuttle and US Airways Express operate approximately 3,800 flights per day and serve more than 230 communities in the U.S., Canada, Europe, the Caribbean and Latin America. The new US Airways -- the product of a merger between America West and US Airways in September 2005 -- is a member of Star Alliance, which provides connections for our customers to 841 destinations in 157 countries worldwide. This press release and additional information on US Airways can be found at www.usairways.com. (LCCG)

FORWARD-LOOKING STATEMENTS

Certain of the statements contained herein should be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as "may," "will," "expect," "intend," "indicate," "anticipate," "believe," "forecast," "estimate," "plan," "guidance," "outlook," "could," "should," "continue" and similar terms used in connection with statements regarding the outlook of US Airways Group, Inc. (the "Company"). Such statements include, but are not limited to, statements about expected fuel costs, the revenue and pricing environment, the Company's expected financial performance and operations, future financing plans and needs, overall economic conditions and the benefits of the business combination transaction involving West and the Company or potential business combination transaction involving Delta Air Lines, Inc. ("Delta") and the Company, including future financial and operating results and the combined companies' plans, objectives, expectations and intentions. Other forward-looking statements that do not relate solely to historical facts include, without limitation, statements that discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. Such statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties that could cause the Company's actual results and financial position to differ materially from the Company's expectations. Such risks and uncertainties include, but are not limited to, the following: the impact of high fuel costs; significant disruptions in the supply of aircraft fuel and further significant increases to fuel prices; the Company's high level of fixed obligations and its ability to obtain and maintain financing for operations and other purposes; the Company's ability to achieve the synergies anticipated as a result of the merger with America West Holdings Corporation and the potential business combination transaction involving Delta and to achieve those synergies in a timely manner; the Company's ability to integrate the management, operations and labor groups of the Company and America West Holdings Corporation and the Company and Delta; labor costs and relations with unionized employees generally and the impact and outcome of labor negotiations; the impact of global instability, including the current instability in the Middle East, the continuing impact of the military presence in Iraq and Afghanistan and the terrorist attacks of September 11, 2001 and the potential impact of future hostilities, terrorist attacks, infectious disease outbreaks or other global events that affect travel behavior; reliance on automated systems and the potential impact of any failure or disruption of these systems; the potential impact of future significant operating losses; changes in prevailing interest rates; the Company's ability to obtain and maintain commercially reasonable terms with vendors and service providers and its reliance on those vendors and service providers; security-related and insurance costs; changes in government legislation and regulation; the Company's ability to use pre-merger NOLs and certain other tax attributes; competitive practices in the industry, including significant fare restructuring activities, capacity reductions and in court or out of court restructuring by major airlines; continued existence of prepetition liabilities; interruptions or disruptions in service at one or more of the Company's hub airports; weather conditions; the Company's ability to obtain and maintain any necessary financing for operations and other purposes; the Company's ability to maintain adequate liquidity; the Company's ability to maintain contracts that are critical to its operations; the Company's ability to operate pursuant to the terms of its financing facilities (particularly the financial covenants); the Company's ability to attract and retain customers; the cyclical nature of the airline industry; the Company's ability to attract and retain qualified personnel; economic conditions; and other risks and uncertainties listed from time to time in the Company's reports to the Securities and Exchange Commission. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. All forward-looking statements are based on information currently available to the Company. The Company assumes no obligation to publicly update or revise any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates. Additional factors that may affect the future results of the Company are set forth in the section entitled "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2006, which is available at www.usairways.com.

ADDITIONAL INFORMATION

Subject to future developments, US Airways may file with the United States Securities and Exchange Commission a registration statement to register the US Airways shares which would be issued in the proposed transaction and/or a proxy statement with respect to the proposed transaction. Investors and security holders are urged to read the registration statement and/or proxy statement (when and if available) and any other relevant documents filed with the Commission, as well as any amendments or supplements to those documents, because they will contain important information. Investors and security holders may obtain a free copy of the registration statement and/or proxy statement (when and if available) and other relevant documents at the Commission's Internet web site at www.sec.gov. The registration statement and/or proxy statement (when and if available) and such other documents may also be obtained free of charge from US Airways by directing such request to: US Airways Group, Inc., 111 West Rio Salado Parkway, Tempe, Arizona 85281 Attention: Chief Legal Officer.

SOURCE US Airways Group, Inc.
-0- 11/15/2006
/CONTACT: Media, Elise Eberwein, Andrea Rader, or Phil Gee,
+1-480-693-5729, or Investors, Elise Eberwein, Derek Kerr, or Dan Cravens,
+1-480-693-1227, all of US Airways Group, Inc.; or Joele Frank, or Kelly
Sullivan, both of Joele Frank, Wilkinson Brimmer Katcher,
+1-212-355-4449, for US Airways Group, Inc./
/Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com/
/Web site: http://www.usairways.com /
(LCC DALRQ)

CO: US Airways Group, Inc.; Delta Air Lines, Inc.; Citigroup Corporate and
Investment Banking; Skadden, Arps, Slate, Meagher & Flom LLP; Fried,
Frank, Harris, Shriver & Jacobson LLP
ST: Arizona
IN: AIR TRA TRN LEI
SU: TNM CCA TDS BFA

KM-AF
-- LAW077 --
1948 11/15/2006 06:00 EST http://www.prnewswire.com

Interesting thing is that Delta apparently ignored Doug Parker's suggestion to discuss the idea - and so it looks like US has taken the bull by the horns. The press release (which I posted in the other thread - and mods, please combine 'em) indicates that US and DL talked about it with nothing happening. Being a Charlottean, I'm not thrilled about this since it means that with a hub here, and a hub in ATL (which they're not going to pull down) - it means that we're likely to be the odd man out - like PIT was.

Of course, it could mean that DL is in play and someone else might get 'em.

Greeeeeat. Another 2 years of combining res systems, policies, FF programs.

I guess we can look forward to a 50% increase in reservation systems. Now that I've gotten used to the quirks of SHARES and SABRE, it sure will be exciting to throw another one in the mix.

And this merger could finally eliminate any question about which American airline has the worst baggage operation. ;)

The chances of this are slim to none, everyone in the industry knows that DL's position when it comes out of BK will be more than strong enough to take US if it wants, this is an absolute joke and it would seem that this guys strategy of somehow trying to go over the board and appeal directly to the BK court (which is ultimately what this is) is pathetic, especially as he refers in his memo to "lost" synergies if they wait until after DL emerges, that is techo-management speak, and it would seem that it is a way for US to keep itself out of the fire.

What a wonderful way to wake up this AM. NOT!!

IMHO I think running the "new" airline under the Delta name is a mistake.

For that matter, I don't look forward to connecting in ATL either.

IMHO, US isn't serious about this - the point is to throw as much turbulence at Delta as possible as it enters the final stages of its restructuring.

For that matter, I don't look forward to connecting in ATL either.

Exactly! One of my firsts thoughts was "but I don't want to give up connecting in CLT for ATL!"

I can't say that I'm terribly upset by this. I'd be happy enough if US bought DL's website. It's lightyears better than usairways.com. Also wouldn't be too bad for me if they merged the FF programs, I've had to fly DL a number of times this year, might get me to gold.

Ok what a wow at 5:45 am (arizona)... I do not know if this would work or not... I would think US Airways would remain as the name, as they just renamed everything and painted all the planes... Who knows

But I am curious to see if this happens... the BK court would want to entertain other offers.... we shall see

Ok what a wow at 5:45 am (arizona)... I do not know if this would work or not... I would think US Airways would remain as the name, as they just renamed everything and painted all the planes... Who knows

But I am curious to see if this happens... the BK court would want to entertain other offers.... we shall see

It's already out there that the new airline would be under the Delta name. :td:

It's already out there that the new airline would be under the Delta name. :td:

I know what you are saying, just read it... let the painting begin!!!
Of course they need to redesign the Delta plans and design a new plane.

I would like to see Delta and Northwest merge, and US Airways trying to buy part of Delta Airlines...

I just got a status match to Delta because I was tired of all the merger issues. Now it may happen again. :(

I feel sick......I just can not get away from these clowns.

For some reason this news reminded me of how my mom always told me to put away one toy before I took out another to play with....

US Airways hasn't worked out the kinks from its last merger (among other things, the inability to get a seat assigned if you book a HP operated flight through Expedia/Orbitz/et. al. drives me CRAZY), so, according to Mom's sound advice, it shouldn't be able to start playing with another.

Man, they really want Longing4Piedmont back.

Man, they really want Longing4Piedmont back.
:D I don't think so..... As he sits in ATL on a nice clean 22 F seat 757 headed to FLL....

Miles & Soledad gave me this news as I turned on the TV this morning. I'm shocked!

This is 8 times harder than the HP merger - at least that didn't include any hub changes. This is going to cause MASSIVE organizational and geographical upset.

I'm concerned - and I really wonder how this is going to pan out.

I'm also wondering why they didn't wait a year when the US-HP merger should be more solid before throwing something else in the mix.

Dear Dividend Miles Preferred Member,

By now you may have heard that US Airways has made a proposal to merge with Delta Air Lines. Over the coming days there will certainly be much discussion in the media about this proposal, and in advance of that I’d like to make clear our company’s motivation for initiating this process and explain how we believe it would provide enormous benefits for you, one of our most valuable customers.

The merger of America West and US Airways has provided us with a sound platform to grow our business and provide additional opportunities for our customers. We believe a merger with Delta is the right type of opportunity that can positively benefit all of our stakeholders – customers, employees and investors. The combination will provide an even stronger base from which the merged airline can compete with other domestic and international airlines.

For you, our customer, there will be benefits similar to what you’ve already experienced with the new US Airways:

* A much larger network of routes and frequencies to simplify your travel
* A history of reducing fares and eliminating unfriendly fare rules like Saturday-night stays
* A global frequent flyer program that combines your Dividend Miles and Delta SkyMiles balances
* Participation in one of the world’s largest airline alliances, opening up even more of the world for your travel
* Peace of mind that you are building a travel rewards investment in a company that will be here for the long term, and that your miles will be here when you’re ready to redeem them

Of course, we don’t overlook the operational challenges inherent with this kind of transaction. Using our experience with the America West/US Airways merger we will work hard to mitigate transition difficulties, particularly with technology -- online and at the airports. In the short term we know there will be challenges, but in the long run you will be the beneficiary of one of the largest, most convenient airline networks in the United States, designed to make travel as efficient, economical, reliable and comfortable as possible.

This process will undoubtedly take some time to reach its conclusion, but please be assured that in the meantime our current integration processes are moving full speed ahead, including moving to one reservations system, which is scheduled for early second quarter 2007. In addition, should this transaction not materialize, please be assured that the new US Airways remains an able and healthy competitor that continues to build the best full-service, low-fare airline in the world.

Thank you again for your support of US Airways. We look forward to the opportunity to serve you again soon.

Sincerely,
Scott Kirby
Scott Kirby
President

Fom the special edition About US (http://justplanenews.com/PDF/FINAL%20-%20aboutUS_111506.pdf) :

Are you guys out of your minds? I mean really, are you not aware that we have a lot of integration work going on and we really don’t need to add this to an already taxing workload!?

Good question and an understandable reaction. To answer the obvious, no we are not “out of our minds!” Even though we are in the midst of our merger between HP and US, we believe this is the right opportunity for our airline and for Delta, too. It would be much better if this were occurring a year from now given our integration work, but the world does not work on our timeline and we believe this is simply too compelling to ignore. In spite of the tremendous amount of work in short-term, this is the right step for our airline when looking at the long-term.

Hilarious.

Talk about collapsing under your own weight.
Merging 3 airlines at once. 3 sets of unions, systems, fleets, etc.

Delta is very cheap right now. In a year it might be healthy and expensive again. I could see their thought process - but my lord - this is going to SUCK.

:D I don't think so..... As he sits in ATL on a nice clean 22 F seat 757 headed to FLL....
Doug could only see to options to win you back. Either improve the airline to the standards set in the glory days of PI, or spend $8B. It turned out to be easier to buy DL.

[T]his is an absolute joke and it would seem that this guys strategy of somehow trying to go over the board and appeal directly to the BK court (which is ultimately what this is) is pathetic....

I disagree. The DL chairman has a duty to DL shareholders. To ignore the letter from US implies that DL is unwilling to listen to offers, and that implication violates the chairman's duties. DL should have replied and said that after looking at the numbers, the shareholders would be better off without this deal. Ignoring the letter gives US a leg up since the DL management now has to tell shareholders why it ignored US earlier.

Haiku:

Sky Team and Star Alliance
One sucks - other is big and complex
I like Star more

Haiku:

Sky Team and Star Alliance
One sucks - other is big and complex
I like Star more

5-7-5, my friend:

Sky Team or Star A?
Oh, logistical nightmare!
This cannot end well.

Hilarious.

Talk about collapsing under your own weight.
Merging 3 airlines at once. 3 sets of unions, systems, fleets, etc.

Only DL unions are pilots and dispatchers, which is part of the appeal. Very easy to integrate FAs and ground staff.

I disagree. The DL chairman has a duty to DL shareholders. To ignore the letter from US implies that DL is unwilling to listen to offers, and that implication violates the chairman's duties. DL should have replied and said that after looking at the numbers, the shareholders would be better off without this deal. Ignoring the letter gives US a leg up since the DL management now has to tell shareholders why it ignored US earlier.
There are no shareholders - only creditors. I'm not certain of the ins-and-outs of bankruptcy law, but my impression is that the DL chairman doesn't have a whole lot of say in the matter. It's up to the creditors and the judge. US is offering the creditors a 25% premium. Is that enough? Who knows, but you'd have to assume they'll take a good hard look.

It's a clever move, since it makes DL's life more difficult, and probably raises the price for any other vultures circling DL. It also makes any other airline considering a merger move a little more quickly. Finally, if it somehow goes through, they get to slash capacity and raise fares throughout the East Coast. and take plenty of money out of our pockets.

i'm just starting to become familar with the airline industries as i fly more, so i was wondering, what's the likelyhood of this ACTUALLY happening?

* A global frequent flyer program that combines your Dividend Miles and Delta SkyMiles balances
* Participation in one of the world’s largest airline alliances, opening up even more of the world for your travel

:confused: Still don't see how this will work. Will DM partner with both *A and SkyTeam? Or ditch *A?

i'm just starting to become familar with the airline industries as i fly more, so i was wondering, what's the likelyhood of this ACTUALLY happening?

I think it all depends on the other offers on the table, and what the creditors beleive will happen to Delta if they emerge as an independent airline.

Fom the special edition About US (http://justplanenews.com/PDF/FINAL%20-%20aboutUS_111506.pdf) :

Are you guys out of your minds?



That was my first thought when I saw the article on USA Today this AM.

(This next part is speculation... and I know others are thinking this, too...) Now, how about this twist? What if this were really a smokescreen for the takeover of another airline... say NW?

:confused: Still don't see how this will work. Will DM partner with both *A and SkyTeam? Or ditch *A?
Mabey the begining of *Team :D

On the analyst call they are non-committal to either *A or Skyteam, will decide down the road.

They also don't seem concerned about fleet type issues, saying that each type is of sufficient size to be as efficient as possible, with the exception of the 330s and the 777s.

This might restore balance. There have been rumblings of problems with the KLM/NW relationship. A move of one of the Sky Team airlines to *A should take pressure of this. .

There's nothing that says they can't ditch skyteam....

That was my first thought when I saw the article on USA Today this AM.

(This next part is speculation... and I know others are thinking this, too...) Now, how about this twist? What if this were really a smokescreen for the takeover of another airline... say NW?
Or UA? You've got to figure both of them, and CO too, are scrambling this morning. UA treats US like a like a nuisance little brother, but they surely don't want to have to try to compete in the East with a combined US/DL. I still think NW makes the most sense. I imagine the non-union workforce of DL is quite appealing though.

Remember the movie, The Aviator? TOO MANY EGOS!!! But then again, nobody ever gave a d*mn about the customer... so....

There's nothing that says they can't ditch skyteam....

The fact that Delta is a founding member of SkyTeam and would face hundreds of millions of dollars in financial penalties for exit says so. US can be tossed from Star with comparative ease.

The fact that Delta is a founding member of SkyTeam and would face hundreds of millions of dollars in financial penalties for exit says so. US can be tossed from Star with comparative ease.

In bankruptcy court, just about any contract/agreement can be tossed out.

Honestly, Sky Team would make more sense than * anyway. UA rules * with an iron fist. US/DL would be a big fish in a small pond with Sky Team. WOuld they be bigger than AF/KL?

Honestly, Sky Team would make more sense than * anyway. UA rules * with an iron fist. US/DL would be a big fish in a small pond with Sky Team. WOuld they be bigger than AF/KL?


Actually, I'd consider LH to be the ruler of Star Alliance, but I digress.

US/DL would be the world's largest airline by most any measure.

I think I'm going to book my *A award tickets to Asia for next year right now. If this goes through, I have serious doubts about their ability to remain in *.

US Airways said citibank will finance 7.2 million of the buyout.

The fact that Delta is a founding member of SkyTeam and would face hundreds of millions of dollars in financial penalties for exit says so. US can be tossed from Star with comparative ease.

I'm curious where the hundreds of millions of dollars in financial penalties would come from?

US/DL would be the world's largest airline by most any measure.

From that perspective the merger looks somewhat bright - consolidation is coming. Operationally - oh boy - I feel for the people doing the integration.

If this is approved, it is supposed to happen when Delta emerges from bankruptcy. When are they supposed to emerge?

I'm curious where the hundreds of millions of dollars in financial penalties would come from?

From the SkyTeam Alliance Master Agreement. That said, it is the case that Delta could seek rejection of the agreement as part of the BK proceedings, but that'd be a dangerous step in light of the fact that United has sole control over US' continued presence in the Star Alliance in the event that US merges with another carrier.

All I got's to say about this is:

"WHAT YOU TALKIN ABOUT US/HP?"

or the confused Tim Allen Grunt

the HP and US systems aren't even fully integrated yet and they want to merege with Hellt...err Delta? And on that note, possibly fly under the Delta Name plate...does this make any sense what so ever?

I will be watching this pretty closely over the coming weeks & months. I am alomst willing to lay odds that it wont go through.

Actually, I'd consider LH to be the ruler of Star Alliance, but I digress.

US/DL would be the world's largest airline by most any measure.

Or the world's largest suckiest airline (I think Conan O'Brien said this about the US/HP merger creating the fourth largest suckiest airline).

Again, I don't believe it. Both are strong in the east and have Euro routes. Both are weak to Asia. Imagine the horrors of managing those diverse fleets!

Delta might like US's west coast presence, US might like Delta's southern exposure. *Alliance may prefer US/Delta to United given United's uncertain future. But LH might not like D's huge Euro presence.

US should takeover NW, grab those Asian routes and the DTW/MSP hubs. I would LOVE to fly through DTW instead of PHL!

My .$02 - LH (and all the other airlines in *A that they now own) calls the shots in *A more these days than UA. If this happens (I wouldn't be surprised if AA gets in on this action) either AF or LH is going to lose big time.

Because of ST weakness in Pacific carriers/routes (an understatement if there ever was one) my guess is that US/DL would opt to
stay in *A.

Whether they can or will be allowed to is another matter.

From the SkyTeam Alliance Master Agreement.

Is this available on the web somewhere? I'd be very curious to see what it says.

Is this available on the web somewhere? I'd be very curious to see what it says.

It's not a public document, but is referenced from time to time in the various regulatory filings of the member carriers.

Greeeeeat. Another 2 years of combining res systems, policies, FF programs.
My first reaction as well. Heaven help us! Can't wait for a new broken website.

I would LOVE to fly through DTW instead of PHL!

I think that is the first time I have EVER heard anyone say they would rather be in Detroit than Philly, let alone any other city!

And now they've announced (http://phx.corporate-ir.net/phoenix.zhtml?c=196799&p=irol-newsArticle_print&ID=931393&highlight=) that Richard Schifter from TPG has resigned from the board. Curiouser and curiouser.

LCC investors appear to approve of this idea. The stock is up 8% @9:50am.

Wasn't there talk this year that US Airways would be leaving * Alliance anyway since their LCC model did not fit with the other carriers in the Alliance? I could be wrong but I thought I read that somewhere.

Though SkyTeam has some great airlines (KLM, CO) it also has some terrible airlines (Alitalia) and some HUGE gaps (Asia, Australia).

If this goes through I'll have to seriously examine my loyalty to US.

I think it all depends on the other offers on the table, and what the creditors beleive will happen to Delta if they emerge as an independent airline.

Won't happen.

If you read between the lines about the parts saying "potential synergies will be cut in half if we wait" it really means "we need to use the BK court to further shrink the delta fleet." It's the same play the Sandcastle did with the "East" US--they drove down labor costs and shrunk the fleet. But really, they have not integrated anything yet to obtain "synergies." Does anyone really think if they can't get sabre/shares/website working a year later or so much as one combined contract for any labor group that they'll be able to pick off Delta?

The problem with that last issue: Delta's pilots. They have already been bloodied in bankruptcy--something tells me they won't allow a fleet shrinkage without paying a price that Tempe is unwilling to pay.

But let's say that it did--the DOJ will take a long look, as this would tie up a good portion of such small airports as DCA/LGA/BOS with one carrier. Oh, and the entire Southeastern US.

Also--the route structure is still stupid with a US/HP lashup. CLT and ATL? PIT/PHL/CVG? PHX/LAS/SLC? Dumb.

Oh, and they'll probably get booted from Star, who will probably take that action well before the DL transaction were to hypothetically close.

I agree with whoever said it above--this is to screw with Delta on the way out of Chapter 11, and little else.

I agree. I sense another US-UA merger debacle. Lots of hope, followed by furious pilots, raging customers, armed unions, and lots of hurt feelings. Eventually it will be called off.

If a merger did occur, then the combined airline would have a real monopoly on the East Coast. I mostly fly out of Greensboro, and the new airline would control about 80% or more of the flights. Several East Coast cities would face the same.

Who has a guess where the airline will be headquartered?

I agree. I sense another US-UA merger debacle. Lots of hope, followed by furious pilots, raging customers, armed unions, and lots of hurt feelings. Eventually it will be called off.

There are very few unions to break here at DL (in ATL atm). And who cares about raging customers or feelings. They never did matter in this industry.

It's really a bold move by Parker and company. The more I think about it, the better played it seems to me. Grinstein has to be a little worried. If it's true that he refued to even listen to an offer, the creditors and judge may not be too happy with him. A 25% premium is nothing to sneeze at. Those people, by the way, are the ones who'll be creating his severance package. You'd think he'd have a vested interest in listening to offers.

Sound of finger being stuck down throat.... :D

I don't see this coming to fruition. Not only are the integration issues significant, the antitrust issues concerning the Southeast and shuttles are problems as well. Moreover, once this thing dies, you've just alienated your customers in CLT and PHL who presumably would be cast overboard for the most part by this deal in favor of DL hubs at JFK and ATL. I can't see keeping multiple hubs open in such close proximity to each other and the CLT and PHL operations are far smaller and have less O&D traffic than JFK and ATL. On top of it all is the fact that they have yet to integrate HP and US successfully. What makes them think that they can swallow DL, which is a comparative behemoth?

Sound of finger being stuck down throat.... :D
I was hoping you'd join us. What's your take?

On a more serious note, Grinstein is the Lakefield in this deal. Competent, but in his 70's (older than Lakefield), he wants out. They are bankrupt, which mitigates a lot of DOJ objections), and if Delta had any strong management to go to, they would not have had to bring Grinstein onboard (he was a Delta director, but that's it).

The equity funds (hedge guys, etc.) must be wetting their pants to get in on this deal. They are awash in money, and Parker & Co. will gladly settle for a smaller piece of a bigger deal. The only thing between this and getting it done, would be a collapse of the hedge fund sector, and that's not so remote.

If this merger occurs, fares will increase because there will be less competition. I wonder if this merger could get by the U.S. gov's watchdogs.

After, literally, waking up with this news and digesting it for a few hours I think this is nothing more than a big business bluff.

In my uneducated opinion I think HP got wind of a DL merger with someone else (read: NWA) and has now thrown their cards down with an all-in that more or less raises the stakes to an unberable level for the other carrier (read: NWA). HP/US is logically worried that the DL/NW combined carrier would be way too strong (despite the obvious flaws of both carriers) and would seriously hurt Tempe's businesses.

Here's why this doesn't make sense:

Look at the hub structures: PHX / LAS and SLC too much overlap:
PHL / JFK. I said it another post, it's like a two legged dog vs. a three legged dog. Unfortunately the stregnth of DL's presence in JFK hurts PHL too much. CLT v ATL. US has a lot invested in CLT although it would be the easier one to throw out the door.
Equipment types. DL is majoirty BA, US is Airbus. That's a recipe for higher fleet maintenance costs (and training).
US and DL have fundamentally different business models and plans for the future.
The time isn't right for US to do this. If US was seroius about this they would have dragged their feet more on the merger knowing that they'd be integrating a third, larger, piece into this puzzle. Despite how much we all complain about the merger issues, they've invested millions into this which will go out the door.

Unless DL's shareholders arm-wrestle DL management into doing this it will never happen. And, because DL isn't excited about it, integrating that employee culture will be tough.

It's all very interesting though. And I'm looking forward to seeing how this will play out.

If nothing else, it'll give DL another reason to change their livery, which they always seem excited about. :rolleyes:

By the way, anyone know what res system they use over at DL? Shares? Sabre? Their own thing...?

America West's management is out of touch with reality. Maybe they think that a merger is the only way to get them out of their state of confusion. AW's website is a mess and booking flights at times can be diffcult and I often get much better pricing on Expedia. They are driving away business customers in herds. They mostly operate different aircraft except the 757, and Delta's 737s are 800s (+8 old 737s). Do DL's and America West's 757s have the same engine?

Now up over 13% and other airline stocks are up today as well. Regardless, it did put some interest in the sector.

LCC investors appear to approve of this idea. The stock is up 8% @9:50am.

A merger will reduce inventory in the sector. No other factors really matter.

Those familiar with the industry know its all about revenue and seat inventory. Everything else is just decorating material. Reduce the number of airlines, and everyone makes more money, qos is mostly irrelevant.


Now up over 13% and other airline stocks are up today as well. Regardless, it did put some interest in the sector.

After getting Silver on both DL and US last year, I decided to concentrate most of my flying on DL this year, because, well, I just didn't like US. I'll be Plat on DL when the year ends.

That being said...in the words of The Price is Right...

"Next item up for bids" is my loyalty for next year. Based in SDF, most of my flying east of the Mississippi River, what airline would you suggest for someone who hit Plat this year, and prob Gold in future years. I'm going to miss my 200K miles on DL, guess it's time to start burning them.

When I invested in the Phoenix Club with a lifetime membership in 1996 my decision was based on occasional use of PHX and Presidents Club locations for my travel plans. We lost PC and NW access last year. Club management with their US air logic starting charging for beverages. Now we have a chance
of having access again with WC and PC and I would assume the cash registers would go as well. We have a Crown Room at SAN. Current US Air
passengers are the only ones without club access here. My only concern and hope is that DL would accept us lifetime members into their program just like they brought in Pan AM club members many years ago. This is a win for me.

You guys are all missing something. DL has no shareholders ( i would think that you guys having been through this TWICE would have understood this!) and according to the BK court DL does not have to consult any other entity prior to February 15th. Plain and simple. Truth be told none of the big DL creditors would really be interested in this as DL's current outlook shows no upside from this US offer. All that US has done is increased DL's cost of exiting BK as they will have to show creditors more money or bigger stakes down the line in order to justify turning this down eventually. Also consider the fact that US's record over the last decade is dismal in comparison to DL's (which was not so hot anyway). Lastly, I see some people have said, "Well they both have TA flights", well actually DL has more TA capacity only to London and Paris then US has in its entire system (and that is leaving out another 30 or so TA city pairs).

On the usairways.com announcement about the merger, the link for investors sends one to the page that begins, "Dear US Airways Customer...."

So, I guess the merger will not cure all website woes! :)

It must be reassuring to US investors that US does not care enough to get their link right. :rolleyes:

I've heard there are huge penalties for leaving Star Alliance. Austrian Airlines were considering a switch to Sky Team, but eventually decided not to do this because of these penalties. There was a discussion about it on the LH forum.

Anyway, it would be better if US remained a *partner.

USAir is definitely on the warpath. I think Justice realized that preventing the US/UA deal was bad for the industry (right after AA picked up TWA and got more market share than US+UA). There will have to be some concessions: the DCA to LGA shuttle route for example, and a few others likely. Whether its NW, CO, or Delta - not sure but you know it's got to be at least one.

My 2 cents.

I think the flaw here is to assume that Parker knows or cares how to operationally merge the carriers:

I got back to the press release statement about "getting it done before Delta exits BK versus after." Point is that Parker is a one trick pony--slash labor costs and shrink that fleet.

They have yet to integrate anything significant and that actually works in the US/HP merger. The DL thing is horrid on any number of levels (hubs, fleet commonality, the fact that DALPA might just shut Delta down before agreeing to any of this). But at the end of the day, it matters not: Parker is a wannabe finance guy who is getting to play airline in a rising market (and with the Bankruptcy court on his side). It's like shooting fish in a barrel.

Delta was my primary carrier before i moved to AZ and still to this day remains my favorite, I would love to see this happen purely on the hopes that US could learn what real service is from Delta. Just think about it, transcon widebody service.
US does not learn they ruin.

Wonder where the corporate HQ would be, Atlanta or Tempe.

The DL ff program is much better than US and the cc program is many times more rewarding. NOOOOOO!

I've been thinking about this all morning. Maybe its b/c I'm in a room of D/L flyers (not FT users despite my urging)...

here are my random thoughts:

I'm not 100% sure this is a bad things. There are clearly things I dont like (MD88s, SkyTeam, Atlanta)...but there are some good things. 50% of my travel takes me to Atlanta...so no connections...but less segments so thats a wash. The hub thing doesnt mean much to me...US had PHL and PIT for a long time...they are 45 mins apart! I think more hubs is only a good thing...that could mean more routing options. Doesnt DL also have Salt Lake as a Hub? Couldnt that be a good thing?
As an avid skiier I like that DL flys into Vail more often than 2 days a week!

DL has a killer web site, compaired to US.

Now, I'm a DL convert, I left DL when they did the whole qualifying miles thing...I love being a US CP, I like US planes and service for the most part. I'm under no delusions...I know they dont care about me as a customer nor do they care about customer service one bit...but I dont often encounter problems and when I do I can usually get a resolution that works. The FC seats are comfy enough...glass or plastic, its still cheap booze to start with (honestly, who drinks Johnny Red by choice?).

Personally, and quite a novice opinion...I think there is a glut of Airlines in America. It seems like they are always bellyaching about not making money and costs being too high and that sounds, to me, like one too many players in the ring (to mix metaphors). So if they merged, wouldn't that be the largest airline in the US? So say the slim down a bit, they'd still have a good presence in most of the US...I know a lot is in the East Coast, but isn't that there most of our population is, or at least the densest? So I'm thinking a few more routes, more options to get to cities directly (less segs for me though)...

Like I said....random thoughts

I guess I just dont know that this is 100% bad. Its not 100% good either...

What a crappy way to start my day! I was happy too today! I even went down to watch East Operations at SAN, and looking at US1500 take off, it almost bought a tear to my eye!

Dont do it Doug!

Wonder where the corporate HQ would be, Atlanta or Tempe.
DL has a whole head quarters campus. Not everyone will fit in the current tempe building. and for a much larger airline the headcount will have to increase. I say they move to ATL since they have more space for expansion. Unless PHX is so desperate that they decide to give them a huge amount of land and tax incentives I'd say they're Atlanta bound. :D

After, literally, waking up with this news and digesting it for a few hours I think this is nothing more than a big business bluff.

In my uneducated opinion I think HP got wind of a DL merger with someone else (read: NWA) and has now thrown their cards down with an all-in that more or less raises the stakes to an unberable level for the other carrier (read: NWA). HP/US is logically worried that the DL/NW combined carrier would be way too strong (despite the obvious flaws of both carriers) and would seriously hurt Tempe's businesses.


Maybe you're right. My guess is that US probably doesn't want DL. Its a disaster from any way you look at it. But they might want NW, which has some fairly decent synergies with the current US, namely, solid midwestern hubs (MSP & DTW), a relative fleet match (A319/320, A330, E190s, 752/753; the DC-9s will be gone soon), and a strong Asia presence at NRT. This could be a ploy to keep NW in play by screwing around with DL.

After thinking about it for a few minutes, I think this was a reasonable semi-bluff by US.

Best case scenario for Tempe: DL goes for the premium, then DALPA goes beserk and shuts down DL. The Southeast, a bunch of transatlantic routes and the Shuttle are up for grabs, and US gets a good share of the former and lets AA/UA bleed each other dry bidding for the latter.

Medium case scenario for Tempe: DL has to spend more money coming out of BK so they can tell Tempe to shove it, and the uncertainty of "will they/won't they" is enough to send a fair number of people in the SE and NYC towards US. More market share for minimal investment.

Worst case scenario for Tempe: DL calls US' bluff. US digs around in the financials long enough to find a bunch of information they can use to back out of the deal, citing "things were not really as they were portrayed to be..." US looks a little stupid, but DL has to spend money, it probably delays the exit for a while, it might make DL have to sell something, and it keeps NW off the table until everything settles out.

Parker is making a lot of money for his shareholders today. I don't see this as a bluff. While NW on paper makes a lot more sense, I think Parker is convinced that DL offers the most compatible partner in the most attractive markets, read Northest, Southeast and Transatlantic.

Thinking about what would have to go from an anti-trust standpoint-if this insane deal goes through (1 chance in 10, IMHO).

DCA-BOS-LGA Shuttle Slots/Routes (United or Continental)
CLT hub (maybe an AA pickup, NW could move MEM ops here too)
SLC hub (would fit CO well)

I think PHL is big enough to stand on its own, as is JFK. They'd also have to make a choice as to what will be their midwest hub-PIT or CVG (both of which seemed to be past their glory days as hubs).

Oh boy, another merger.

Maybe after the bungling the first one, Doug's going for the best-two-out-of-three approach. :rolleyes:

Just received this e-mail:
Dear Dividend Miles Preferred Member,

By now you may have heard that US Airways has made a proposal to merge with Delta Air Lines. Over the coming days there will certainly be much discussion in the media about this proposal, and in advance of that I’d like to make clear our company’s motivation for initiating this process and explain how we believe it would provide enormous benefits for you, one of our most valuable customers.

The merger of America West and US Airways has provided us with a sound platform to grow our business and provide additional opportunities for our customers. We believe a merger with Delta is the right type of opportunity that can positively benefit all of our stakeholders – customers, employees and investors. The combination will provide an even stronger base from which the merged airline can compete with other domestic and international airlines.

For you, our customer, there will be benefits similar to what you’ve already experienced with the new US Airways:

* A much larger network of routes and frequencies to simplify your travel
* A history of reducing fares and eliminating unfriendly fare rules like Saturday-night stays
* A global frequent flyer program that combines your Dividend Miles and Delta SkyMiles balances
* Participation in one of the world’s largest airline alliances, opening up even more of the world for your travel
* Peace of mind that you are building a travel rewards investment in a company that will be here for the long term, and that your miles will be here when you’re ready to redeem them

Of course, we don’t overlook the operational challenges inherent with this kind of transaction. Using our experience with the America West/US Airways merger we will work hard to mitigate transition difficulties, particularly with technology -- online and at the airports. In the short term we know there will be challenges, but in the long run you will be the beneficiary of one of the largest, most convenient airline networks in the United States, designed to make travel as efficient, economical, reliable and comfortable as possible.

This process will undoubtedly take some time to reach its conclusion, but please be assured that in the meantime our current integration processes are moving full speed ahead, including moving to one reservations system, which is scheduled for early second quarter 2007. In addition, should this transaction not materialize, please be assured that the new US Airways remains an able and healthy competitor that continues to build the best full-service, low-fare airline in the world.

Thank you again for your support of US Airways. We look forward to the opportunity to serve you again soon.

Sincerely,
Scott Kirby
President

Oh boy, another merger.

Maybe after the bungling the first one, Doug's going for the best-two-out-of-three approach. :rolleyes:
How did he bungle the first one? He's made a fortune for himself and his shareholders with US/HP. The stock is closing in on triple its initial '05 level.

Thinking about what would have to go from an anti-trust standpoint-if this insane deal goes through (1 chance in 10, IMHO).

DCA-BOS-LGA Shuttle Slots/Routes (United or Continental)
CLT hub (maybe an AA pickup, NW could move MEM ops here too)
SLC hub (would fit CO well)

I think PHL is big enough to stand on its own, as is JFK. They'd also have to make a choice as to what will be their midwest hub-PIT or CVG (both of which seemed to be past their glory days as hubs).

US named these aiports as "hubs" in the 8k:
Southeast: ATL/CLT
Northeast: LGA/JFK/PHL
West: PHX/SLC
Central: CVG/PIT

There are a couple interesting things about this list:

1. PIT is listed as a "hub". Can we hope that Parker is finally correcting the blunder that is PHL by routing more connecting traffic back to PIT?

2. Where's LAS? Looks like three western hubs is too many, and it didn't make the cut.

I think this post on the USA Today Blog about the merger says it all...

"Delta and US Airways? EWWW."

Just received this e-mail:

See this extensive existing thread (http://www.flyertalk.com/forum/showthread.php?t=625183) and continue discussion there.

I think the flaw here is to assume that Parker knows or cares how to operationally merge the carriers:

I got back to the press release statement about "getting it done before Delta exits BK versus after." Point is that Parker is a one trick pony--slash labor costs and shrink that fleet.

They have yet to integrate anything significant and that actually works in the US/HP merger. The DL thing is horrid on any number of levels (hubs, fleet commonality, the fact that DALPA might just shut Delta down before agreeing to any of this). But at the end of the day, it matters not: Parker is a wannabe finance guy who is getting to play airline in a rising market (and with the Bankruptcy court on his side). It's like shooting fish in a barrel.
Wannabe airline finance guy? That's cute. I'm not sure why you think the Delta pilots would suddenly find the grit to stop something like this - they've shown a remarkable willingness to bend over til now. Exactly what leverage do they have? Their one vote on the creditor's committee?

I guess all that squabbling between Delta/WN/US about gates in the A-West terminal a couple weeks back is about to change.... :cool:

Wannabe airline finance guy? That's cute. I'm not sure why you think the Delta pilots would suddenly find the grit to stop something like this - they've shown a remarkable willingness to bend over til now. Exactly what leverage do they have? Their one vote on the creditor's committee?

They can block a codeshare, which will make it much more expensive and difficult to operationally merge on day 1, much less get into a different alliance. They probably have minimum fleet count and fragmentation language in the contract.

don't know if this has been brought up but...

Where do they have 4 billion dollars at?

Didn't they just spend millions on new paint jobs? IF they rename to Delta are they going to paint them again?

We also don't need another crappy hub in Atlanta. We have Philly already!

Where do they have 4 billion dollars at?
Citigroup is providing financing.

I think the flaw here is to assume that Parker knows or cares how to operationally merge the carriers:

I got back to the press release statement about "getting it done before Delta exits BK versus after." Point is that Parker is a one trick pony--slash labor costs and shrink that fleet.

They have yet to integrate anything significant and that actually works in the US/HP merger. The DL thing is horrid on any number of levels (hubs, fleet commonality, the fact that DALPA might just shut Delta down before agreeing to any of this). But at the end of the day, it matters not: Parker is a wannabe finance guy who is getting to play airline in a rising market (and with the Bankruptcy court on his side). It's like shooting fish in a barrel.

I'm going to be nice. This is nothing but a Ponzi scheme on a huge level.

Oh boy, another merger.

Maybe after the bungling the first one, Doug's going for the best-two-out-of-three approach. :rolleyes:

I wish all my investments were as bungled as the HP deal - Doug has made a pile of money for the long-suffering investors who have ridden the stock up from pre-US acquisition to post-US acquisition.

Parker is CEO with the intention of making money for the shareholders, not please mileage junkies with no financial stake in the business. As a traveler I may feel like this will not improve my continental US travel options or comfort, but as an investor you would have been pretty happy with today's action.

Change: Up 7.53 (14.78%)
As someone who invested in HP at $2.21 a share im very happy.

I wish all my investments were as bungled as the HP deal - Doug has made a pile of money for the long-suffering investors who have ridden the stock up from pre-US acquisition to post-US acquisition.

Parker is CEO with the intention of making money for the shareholders, not please mileage junkies with no financial stake in the business. As a traveler I may feel like this will not improve my continental US travel options or comfort, but as an investor you would have been pretty happy with today's action.


I don't like short selling stock, but with all of this activity, I believe this will be a very lucrative exception. May even check into put orders.

The DL ff program is much better than US and the cc program is many times more rewarding. NOOOOOO!

Their FF program doesn't allow you to earn status based on segments. I for one would not like the idea of earning 0 segments on my $800 PHL-ALB-PHL runs. I'm sure that there are others here in a similar boat. I will make gold this year on segments, but I won't even come close on EQMs.

I thought I'd seen it all.

I was wrong :eek:

Wow. Just wow.

All I can say is...damn...There goes PBI's Largest Carrier and the most loyal carrier U S Airways...*sighs*...

I hope this is just a bluff because if not...I'm just going to join United :(

The DL ff program is much better than US and the cc program is many times more rewarding. NOOOOOO!
One good thing is US allows segments toward elite and DL had abandoned that. It's a great thing for short haul flyers. Hopefully this is one thing that would survive a merger.

I'm in both programs and outside of the segments, I think they are very comparible. In fact, I've had better luck getting award seats on US than I have on DL.

Their FF program doesn't allow you to earn status based on segments. I for one would not like the idea of earning 0 segments on my $800 PHL-ALB-PHL runs. I'm sure that there are others here in a similar boat. I will make gold this year on segments, but I won't even come close on EQMs.


I wouldn't like that either. . . . I'm CP now but this year I have 25k miles and 50 segments so far - will probably have to do a segment run to reach Gold at 60. I fly RDU/PHL/ALB/MHT/PIT/CLT etc. I'll miss making 4k miles per round trip to ALB

I don't like short selling stock, but with all of this activity, I believe this will be a very lucrative exception. May even check into put orders.

I did it in the spring with US and netted just short of $310,000.

Doing it again this afternoon before end of trading in a bigger way.

A side benefit in Doug's mind for pursuing this is merely to distract attention from US's bulding seismic challenges and increasing failures. It is all vacant hype, trust me.

2. Where's LAS? Looks like three western hubs is too many, and it didn't make the cut.
My guess would be that LAS would (correctly) be downgraded out of the "hub" category into a focus city, a-la BOS, DCA and DL's MCO ops. There's really only one set of banks for LAS, it's not a full-blown hub.

I did it in the spring with US and netted just short of $310,000.

Doing it again this afternoon before end of trading in a bigger way.

A side benefit in Doug's mind for pursuing this is merely to distract attention from US's bulding seismic challenges and increasing failures. It is all vacant hype, trust me.

Welcome to FT!

What a profitable first post. :D

One good thing is US allows segments toward elite and DL had abandoned that. It's a great thing for short haul flyers. Hopefully this is one thing that would survive a merger.



I think I take back all my rambelings from earlier...no credit for segs = no fun for SpaceBass...
This year I'm 121/75k ... I depend on segs for my CP status.

My guess would be that LAS would (correctly) be downgraded out of the "hub" category into a focus city, a-la BOS, DCA and DL's MCO ops. There's really only one set of banks for LAS, it's not a full-blown hub.


LAS, SLC, CVG and CLT would probably all be downsized...

A side benefit in Doug's mind for pursuing this is merely to distract attention from US's bulding seismic challenges and increasing failures. It is all vacant hype, trust me.

Exactly - US/HP is a looming financial and operational disaster that is enjoying a brief honeymoon on account of newly-lowered costs at US East and decreases in fuel costs. I give Parker some credit for realizing that something needs to be done, but I nonetheless want to know who his dope dealer is, so the guy can be arrested and put out of business for selling such bad stuff to Parker.

Exactly - US/HP is a looming financial and operational disaster that is enjoying a brief honeymoon on account of newly-lowered costs at US East and decreases in fuel costs. I give Parker some credit for realizing that something needs to be done, but I nonetheless want to know who his dope dealer is, so the guy can be arrested and put out of business for selling such bad stuff to Parker.

Yes, that and more. Costs have nowhere to go but up, operationally its a nightmare, and I'm sure the future revenue picture doesn't look good. I don't know how long investors will continue to buy the quarterly "If not for merger related costs (wink) we would be making some real money" press releases. So the only option is to put US in play - which was done today.

LAS, SLC, CVG and CLT would probably all be downsized...

The Pittsburgh Post Gazette is specualting that PIT will lose half its flights, too.

LAS, SLC, CVG and CLT would probably all be downsized...

LAS probably won't be downsized. The bank of late night flights are used to increase aircraft utilization. LAS is a bout the only city in the country that can pull that off.

The Pittsburgh Post Gazette is specualting that PIT will lose half its flights, too.

So pittsburgh will have 1 flight? :)

Look on the bright side everyone - we may soon be able to redeem Dividend Miles on Aeroflot! Our dreams have come true!

Is it true that I read no more Int'l flts for CLT? Those would be left to JFK and PHL from what I read.

I bought a US Airways Club spousal life membership (no longer sold) on the chance that the then-proposed UA-US merger would go through, gaining me a life membership in the Red Carpet Club, which stopped selling life memberships many years earlier. We all know how that worked out.

So now it looks like I may end up with a Crown Room Club life membership. I hope the DL Crown Room Club policy of free beer -- very good local brews, at that -- will remain intact.

Although I may be a bit selfish, I can currently find award availability on Delta, but using USAir miles is next to impossible. Competition is not a bad thing.

I don't know, US has a great airport in PIT and CVG can be a disaster. Here's hoping..

I think the operational problems are so vast that this combined entity will be in liquidation in a couple of years. If the goal here is to thin the ranks of the legacy carriers, this one will do it. UA, AA, CO and NW can pick over the carcass for assets.

Random thought: Could DL grab the gates they vacated in DFW? The new entity would be larger than AA and could definitely use a midcon hub.

Beyond the obvious disaster of fleet types (wouldn't it be kind of like the ark?), the hubs might be less bad than we think. PIT goes up, CVG goes down. CLT acts as an STL-style reliever for ATL, PHX has two relievers in LAS and SLC. PHL and JFK are probably different enough in terms of international market that they could stay. Still, that leaves Asia as a big hole. (filled by NW if they stay in Sky, UA if in *A)

That said I think this is a horrific idea driven by the belief that this exec team can handle anything. Doug & Co aren't dumb - they're going to get themselves and a few others very, very rich with this idea.

.. I can't see keeping multiple hubs open in such close proximity to each other and the CLT and PHL operations are far smaller and have less O&D traffic than JFK and ATL.
Incorrect. JFK and PHL have almost identical O&D (about 18M/year).

Is it true that I read no more Int'l flts for CLT? Those would be left to JFK and PHL from what I read.

No offense intended to the poster, but this is precisely the sort of madness that creates itself the very day the proposal was announced. Without the aid of a working, accurate crystal ball, no one can know this sort of thing. Next we'll be wondering if all service to ROA will be dropped?!?!?!?

Oh, sure, some front line employee in ILM may have a comment about it, but that's how this stuff blows up with no foundation in fact.

Let's all take a deep breath and watch this play out. Methinks whatever's about to happen is going to take a L O N G W H I L E.

So then, it looks like in just under 14 hours, everyone remotely interested in the airline industry has taken up an opinion on this merger proposal from old Dougie and his "Brain Trust" down in Tempe.

I personally DO NOT LIKE THIS IDEA AT ALL...besides the service/fleet/scheduling issues, i find the whole idea of US gobbling up DL absolutely revolting. There are too many issues to be resolved with hub placement, this whole deal probably will float over like a lead balloon when it gets to the regulators, and then there are the massive problems with the whole alliance schemes.

DL is the red-headed step child of ST...no one wants them! CO and Northworst almost hardly acknowledge DL's existence when it comes to upgrades/lounge access etc..i saw a nice phrase on USA Today earlier that perfectly summed up this entire situation..."Right Time-Wrong Airline."

This whole merger just seems to have a strage aura about it. Of course, most people said HP/US would never fly..and honestly, they are doing quite well...but HP/US/DL...i wonder if this isn't going just a little bit far...I took my first flight on US...i recieved my first upgrade on US...got status on US first, and have only flown an occaisonal UA segment domestically...that is loyalty...not much can shake me off of US..route wise, with such cocncentration in the NE...US has been the only airline ever worth flying for me...however, service has taken a noticable hit post 9/11...and if the airline defies all odds, and makes the DL buyout (why are they calling it a merger???)...I have to think that might be the straw that breaks the camel's back...ATL connections don't sound too nice to me...

Incorrect. JFK and PHL have almost identical O&D (about 18M/year).

JFK's, however, is probably more lucrative. It's much heavier on international.

US/HP pilots have an opinion about the proposed merger as well:

http://crewroom.alpa.org/aaa/DesktopModules/CodePhone/ViewCodeaPhone.aspx?DocumentID=1712
"This is Arnie Gentile with a third US Airways MEC update for Wednesday, November 15th with one new item:

Although the announcement of a proposed merger between US Airways and Delta Air Lines makes for big news in the press, we remain focused on the very real tangible issues of the current US Airways and America West integration. All pilots can feel good about the timing of this announcement. The US Airways pilot’s will not be left behind. Just like an aircraft cannot take off without a pilot, this merger will never take off without the pilots on board. Management’s lack of focus on the current integration of the pilots groups continues to cause labor unrest. As you are well aware, since this merger was announced one year ago, little or no progress has been made at the negotiating table. Tomorrow, your union will embark on the largest labor movement on US Airways property and conduct picketing in CLT and PHX. It is now more important than ever to demonstrate to the company that we will be part of the process. We absolutely, positively will not stop until we achieve a fair single contract. One that is commensurate with US Airways position in the market place. Please remember we still have 1,683 pilots on furlough with 176 of those pilots working at Jets for Jobs carriers."

Thank them for me when you cross the picket lines in CLT or PHX! ^

Incorrect. JFK and PHL have almost identical O&D (about 18M/year).

I stand corrected, then. Nonetheless, I can't see them maintaining PHL as a concurrent international hub when the DL hub at JFK is so much larger in terms of international O&D. In any case, they'll do to CLT what AA did to STL -- reduce it to a shell of its former self, which is a shame because it remains an easily navigable hub with decent reliability.

Facts:

1. US/HP has done better than many of us expected.

2. Delta is a train wreck, devoid of senior management, and bankrupt. While the latter is no particular black mark in that industry, the company has allowed an LCC to gut its fortress hub in Atlanta, not once, but after a reprieve from the ValuJet tragedy, twice, in the form of a relaunched AirTran.

3. The new US has failed to cure endemic problems at its PHL hub, and from all apppearances, runs a lackluster International product.

4. Delta is a spartan, but reasonable international product, but its JFK hub is a physical shambles, and it relies heavily on too many 767's, and foreign partners.

5. The Airbus screw up with the 380 has left them with no replacement for the 330, which has created so many 777 orders for Boeing, the merged carrier will have difficulty finding the replacements it needs to remain competitive overseas.

6. The parochial attitude (enthusiasm) in Tempe (if it wasn't invented here, it's no good), personified by the insistence of using a smaller res system, which still isn't fixed, will go from a minor distraction, to a nightmare, in an enterprise the size they are contemplating.

7. The fractious relationship between former HP and former US unions will perceive a threat from even more senior DL people (which will really shove the HP people to the botttom of the seniority barrel), and make common cause. The residue of that will still be around, merger, or not. No telling if that will be good, or bad.

8. While the HP/US combination isn't finished, operationally, opportunities like Delta don't often present themselves. You don't get a second chance.

9. Equity funds are simply stuffed with money they need to spend (and take fees on), so this is a great opportunity for them. Although they, and the airline people, are on different pages, they have the power to pump financial steroids into any enterprise, giving it the ability to buy just about anything. As they say in Investment Banking, "if we put up the money, a water cooler could buy Delta".

10. The government will do a lay down, as it did when Southwest used a bankrupt ATA to gain dominance at Midway that it never could have gotten in a normal environment.

Conclusion. They can probably do it. Parker & the boys, having sold millions of dollars of stock, are playing with house money, and the government won't be happy until the airlines put themselves where the railroads did. Can Airtrak be far behind?

Tune in tomorrow, for another chapter of "Takeover from the Desert", or "Dougie and the Gang do Paris" ("sacre bleu", says the Parisian.."maybe zey will add horsmeat to ze menu!"). One can only hope. It sure beats pretzels for breakfast. :D

Seen last night at gate A-15 at PIT: A Delta Mad Dog. That was fast!

Regardless of service, routes, FTC etc. I predict that this is a dead deal.

IMHO, it may have been possible in early Spring, but the end cost after bid up will be too high and US will walk away.

Guess this post will be around awhile and we'll all get to see who the correct prognosticators were. :D

As far as hubs go, I'm not so sure they would dismantle CLT (they kept both PHX and LAS after all), since CLT has almost no competition from other carriers and allows for significantly higher fares. PHL would probably go since JFK is stronger and provides connections to partner airlines abroad. I imagine they would drop LAS in favor of SLC; again there's market share, plus the added benefit of being able to increase fares in the winter for skiers (like United in Denver).
As others are pointing out, this is all speculation, and there's a pretty strong chance it won't even happen.

As far as hubs go, I'm not so sure they would dismantle CLT (they kept both PHX and LAS after all), since CLT has almost no competition from other carriers and allows for significantly higher fares. PHL would probably go since JFK is stronger and provides connections to partner airlines abroad. I imagine they would drop LAS in favor of SLC; again there's market share, plus the added benefit of being able to increase fares in the winter for skiers (like United in Denver).
As others are pointing out, this is all speculation, and there's a pretty strong chance it won't even happen.

But LAS has much much more O&D than SLC... so dismantle SLC and use LAS as a reliever for PHX.

Use the same philosophy for CLT/ATL and PHL/JFK. CLT would be the backup for ATL... PHL the backup (esp. for int'l traffic) for JFK.

Food for thought....

If a merger happens, why not still opperate two brands. Many of the big boys do already!

US Air - Domestic and Connection Services (ie. TED, American Eagle, AC Jazz etc)

Delta - Hub and International Services

The metal could be divided appropriately as well, with the larger longer-haul planes having delta colors?

Basic potatos, but a very feasible concept!

Steve

Food for thought....

If a merger happens, why not still opperate two brands. Many of the big boys do already!

US Air - Domestic and Connection Services (ie. TED, American Eagle, AC Jazz etc)

Delta - Hub and International Services

The metal could be divided appropriately as well, with the larger longer-haul planes having delta colors?

Basic potatos, but a very feasible concept!

Steve

Yeah - I was thinking maybe an Air France - KLM sort of thing. The same company, two brands, one FF program.

DL has no shareholdersNot true. Plenty of people own shares in DL. The stock is currently traded OTC as "DALRQ". In fact, nearly 20 million shares in DL have been traded today (link (http://moneycentral.msn.com/detail/stock_quote?Symbol=DALRQ) ). The shares may well end up worthless when DL emerges from BK, and DL may currently have no obligation to consult with the shareholders regarding their actions, but to state that nobody is a shareholder is technically untrue.

Day after US Airways' propositon to merge with DL, DL links JFK with Phoenix/Scottsdale/Tempe with new Delta JFK-PHX service. Now that is what I call irony.

Facts:
1. US/HP has done better than many of us expected. ...

DP = the Eddie Lampert of the airline business. He's beaten heavy odds and made US into a profitable franchise, just as Lampert took Kmart and extracted value from something that appeared to have little. Seems like this ploy is right out of Lampert's playbook: both knew that US/Kmart had significant operational deficiencies as standalone enterprises and took decisive actions to correct them.

Facts:


2. Delta is a train wreck, devoid of senior management, and bankrupt. While the latter is no particular black mark in that industry, the company has allowed an LCC to gut its fortress hub in Atlanta, not once, but after a reprieve from the ValuJet tragedy, twice, in the form of a relaunched AirTran.


According to who? Deel, you and I usually see I to eye on most things, but you could not be more wrong here.

I've met the management team of DL and in the same period of time they have run circles around the folks in the sand castle. It would take a lot of bandwith to list the items the DL management has either accomplished in the past year or are currently working on.

About the only thing I can see that dougie has done is cash a check he did not earn......

Let's not get into the list of issues yet to be resolve by this cracker jacker management team. Tempe can not organize a one car funeral and get the coffin there at the same time as the hearse.

I work for US, and we were bombarded with info about the 'merger' yesterday, like it's going to happen. All sorts of 'what if' type questions answered by senior management.

I get home after work and hear on CNN that the Delta board has refused to consider the idea.

Is this just US throwing their newly-profitable weight around, to show they can make an offer on a carrier like Delta, gaining free publicity and reinforcing the image of the New US Airways as a powerful force in the industry, thereby also increasing its share price?

I wonder if it's all professional spin. What does anyone else think?

Hi Warbo,
To sum up, the general feeling around here is that US IS throwing it's weight around (thanks largely to Citicorp more than anyone else) and in the short term sees this as a win-win in terms of positioning themselves in the market. It puts Delta in a difficult spot with their creditors- DL is now forced, while they're in bankruptcy, to consider the proposal, something they were previously unwilling to entertain. It definitely does put US in a different light, PR wise. A lot of people know the US brand for the wrong reasons, so a little bit of news like this puts the company in a dynamic, if aggressive, light.
It will be interesting to see how DL can minimize the damage here,
Kendall

longing4, I wasn't dissing Delta management. Grinstein, who lives in my other hometown of Seattle, came to the Delta board via the Western Airlines merger, and among other things, was CEO of Burlington Northern. That said, he is in his 70's, and simply a caretaker. His successor is expected to be one of two relatively unknown younger execs, one the 39 year old COO, and the other the CFO. That's not exactly depth on the bench. In addition, he cannot name either of them to succeed him, without the approval of the creditors, something he doesn't have.

Lastly, AirTran has succeeded incredibly, operating from the Delta super hub in ATL. Frontier couldn't put up those kinds of numbers, basing in Denver, nor Independence at IAD, Vanguard at KC, etc.If that wasn't leaving a hole, I don't know what is.

DP = the Eddie Lampert of the airline business. He's beaten heavy odds and made US into a profitable franchise, just as Lampert took Kmart and extracted value from something that appeared to have little. Seems like this ploy is right out of Lampert's playbook: both knew that US/Kmart had significant operational deficiencies as standalone enterprises and took decisive actions to correct them.

This is purely a "slash capacity and watch the supply/demand curve do it's think while boning a few more creditors in Delta's BK." It has nothing to do with operational deficiencies as Parker has not addressed any of those thus far in the merger integration.

1. US/HP has done better than many of us expec