I'm getting sick of the short sidedness of some of these politicians.. He just doesn't want NW to move out of his state.. but, if he blocks the merger, there's a chance they'll go belly up and then he'll have lots of unemployed, unhappy people in his state, as opposed to a lower number losing their jobs and/or being relocated to atl.
Tying even two sinking stones together doesn't make them float any better.
DL-NW merger/acquisition or not, NW is no more or less likely to "go belly up" as a result.
Even if we were to buy into the myth that blocking this merger/acquisition would definitively make NW "go belly up", there are a variety of scenarios where even that "go belly up" result could save or add jobs or be better for consumers in Minnesota than would be the case from this DL acquisition/merger of NW.
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Tying even two sinking stones together doesn't make them float any better.
DL-NW merger or not, NW is no more or less likely to "go belly up" as a result.
Even if we were to buy into the myth that blocking this merger would definitively make NW "go belly up", there are a variety of scenarios where even that "go belly up" result could save or add jobs in Minnesota far better than a merger with DL is likely to do.
True, the stones won't float. However, if the government ever gets into a position of having to decide on who best to bail out there is definitely a plus in being the carrier that is "too big to let fail".
True, the stones won't float. However, if the government ever gets into a position of having to decide on who best to bail out there is definitely a plus in being the carrier that is "too big to let fail".
"Too big to let fail" is definitely one way to get the US government to come to the rescue .... with concern about "moral hazard" then just talk. However, there are also industry rescues like that which happened when Bear Stearns had its liquidity crisis with the net result being other players in the industry got a bigger government hand up than the most financially squeezed firm that was "too big to let fail".
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Quote:
Originally Posted by goaliemn
He just doesn't want NW to move out of his state.. but, if he blocks the merger, there's a chance they'll go belly up and then he'll have lots of unemployed, unhappy people in his state, as opposed to a lower number losing their jobs and/or being relocated to atl.
He's a politician, elected to represent the people of MN; are you suggesting he should not be concerned? 100% odds that Delta will cut MN jobs with merger; who are you to say this will be less than if NW stays independent?
Tying even two sinking stones together doesn't make them float any better.
According to every reputable analyst, one stone is sinking faster than the other. If you tie the two together and quickly jettison duplicate and excess ballast, you have a much better chance of staying afloat.
Tying even two sinking stones together doesn't make them float any better.
DL-NW merger/acquisition or not, NW is no more or less likely to "go belly up" as a result.
Even if we were to buy into the myth that blocking this merger/acquisition would definitively make NW "go belly up", there are a variety of scenarios where even that "go belly up" result could save or add jobs or be better for consumers in Minnesota than would be the case from this DL acquisition/merger of NW.
Quote:
Originally Posted by sxf24
According to every reputable analyst, one stone is sinking faster than the other. If you tie the two together and quickly jettison duplicate and excess ballast, you have a much better chance of staying afloat.
These mixed up metaphors are making me dizzy.
Let's not forget: NW was the company who went back to DL with their hat in their hand, begging to be assimilated on DL terms; their employees, communities and customers be damned. Obviously they must have information we don't have to see this as such an imperative.
Whether one wants to demonize Steenland, or complain about conspiracies with Anderson, or curse the evil capitalists wanting a return who financed NW's emergence from the Ch. 11 zombie-o-matic proceedings or damn the political, social and economic environment that has turned the now basket case US aviation system into the laughing stock of the rest of the world, at the end of the day, it is NW who has put their own head into the noose. If you don't agree with the decision of the company's owners, board and management, vote with your feet.
According to every reputable analyst, one stone is sinking faster than the other. If you tie the two together and quickly jettison duplicate and excess ballast, you have a much better chance of staying afloat.
There have been so many instances in the 1990s and the 2000s where "every reputable analyst" -- whatever someone wants that phrase to mean -- said companies were better off than they really were or would be better off with a merger than they really were.
In any case, two firms can also separately "jettison excess ballast", sometimes even better separately than they can together. [There's quite extensive literature on how mergers and acquisitions close and often flop in bigger and faster ways even when "every reputable analyst" -- whatever that means -- said a deal made sense just by way of "jettison[ing] duplicate and excess ballast".
A merger or acquisition is no magic solution -- tied together they may even sink faster than they would sink separately.
Quote:
Originally Posted by Klm is Dead - Long Live KLM
These mixed up metaphors are making me dizzy.
Let's not forget: NW was the company who went back to DL with their hat in their hand, begging to be assimilated on DL terms; their employees, communities and customers be damned. Obviously they must have information we don't have to see this as such an imperative.
Whether one wants to demonize Steenland, or complain about conspiracies with Anderson, or curse the evil capitalists wanting a return who financed NW's emergence from the Ch. 11 zombie-o-matic proceedings or damn the political, social and economic environment that has turned the now basket case US aviation system into the laughing stock of the rest of the world, at the end of the day, it is NW who has put their own head into the noose. If you don't agree with the decision of the company's owners, board and management, vote with your feet.
Voting with your feet is one way amongst many to oppose the merger/acquisition. The success of voting any particular way to oppose the merger is of course subject to debate.
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Hmmmm... anyone remember the darling company that every analyst loved called ENRON... I don't trus them any further than I can throw them. They only have one thing on their agenda... make $$$ no matter what.
I havn't heard of much ballast being jettisoned... lots of operations will have to stay... related to FA's, training equipment (remember little fleet commonality) Pilots and SIM's (same thing) very little savings at the airports, those folks make barely enough to live on as it is. The only real savings will be letting go of those ppl on Lone Oak Pkwy... but that aint much.
The other thing to think about... after the aquisition, what about the other airlines who are ready to go belly-up... the govm't won't let an AA or UA go BK... and where will the "savings" stand up when those airlines get a bailout?
No US carrier (save WN who is hedged till 3030) will survive at $130+ oil.
Quote:
Originally Posted by sxf24
According to every reputable analyst, one stone is sinking faster than the other. If you tie the two together and quickly jettison duplicate and excess ballast, you have a much better chance of staying afloat.
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Airlines paying price for creating 'flying is cheap' image
Peter Hartman, the chief executive of the Dutch company KLM, one half of Air France/KLM, said airlines had been wrong in allowing consumers seduced by the arrival of budget carriers such as Ryanair and easyJet to think that the low cost of flying would continue for ever.
The aviation executive told The Independent that while his own company was insulated against some of the effects of the rapidly rising fuel costs because of its strategy for hedging fuel contracts three to four years in advance, he expected "bloodshed" elsewhere in the industry as carriers struggle to absorb a 90 per cent increase in kerosene prices over the past 12 months.
But, in a tacit admission that airlines are in part reaping the cost of rapid expansion in recent years, Mr Hartman said: "I won't say that the good times are over. But what we did wrong was to give the consumer the impression that flying is cheap. I have just come back from the United States and drivers there are complaining because they are having to pay $4 [£2.04] for a gallon of fuel ... Consumers are now realising that fuel is not for free."
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Quote:
Originally Posted by sxf24
According to every reputable analyst, one stone is sinking faster than the other. If you tie the two together and quickly jettison duplicate and excess ballast, you have a much better chance of staying afloat.
Funny, I just read an article on the Motley Fool, citing Delta as one of several "dreadful stocks to avoid".
The article cites USairways and Delta's high level of indebtedness incurred to emerge from bankruptcy.
I didn't say DL was a good investment, just that it had a lower chance re-filing for bankruptcy than NW.
I'm absolutely flabbergasted at some of the excuses (including Enron, I mean the analysts are telling investors to sell, not buy... ) that are being pulled out in a desperate attempt to justify loyalty to an airline that has chosen to merge in order to save itself.
The reality is that this merger will continue to move forward. I know its straight out of the press release, but it provides the opportunity to eliminate over a $1.0 billion in costs while maintaining a leading market position and increasing pricing power. No matter how hard NW tried, they could do this on its own. The industry has dramatically changed and the heavy dependence on older aircraft feeding low O&D connecting hubs, free upgrades on cheap fares (and cheap fares in general) is a dead business model.
Am I saying DL is the best, or even a 'good' investment? Absolutely not. However, DL is better positioned financially and strategically to survive longer in the current environment than NW, UA or US.
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Quote:
Originally Posted by thezipper
The other thing to think about... after the aquisition, what about the other airlines who are ready to go belly-up... the govm't won't let an AA or UA go BK... and where will the "savings" stand up when those airlines get a bailout?
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Well, the goverment letting airlines go bankrupt is not withour precedent (even chapter7). One is reminded of Eastern and Pan Am.
With regard to AA and UA I assume you mean Chapter 7- the government would almost certainly not bailout AA from declaring Chapter 11 (a distinct possibility) or UA from declaring another Chapter 11.
Which is why I don't understand those that think the government won't let UA or AA fail.
I fully expect there to be failures. US and UA to me are the most likely of the big carriers. At some point though I expect the government will say "we can't let any more airlines fail". Those who hold on the longest will stand the best chance at that point.
-- said companies were better off than they really were or would be better off with a merger than they really were.
