Originally Posted by crju
Team,
Great Information in the notes above. A couple of items that we do know are as follows:
1. Gordon is not silent about reviewing UA's potential w/exCEO and contemplating making a go of turning UA around. Does that include a merger with CO? (Maybe/Maybe Not) Does Gordon want this challenge?
2. Gordon has rolled his eyes several times when Tilton's name has been mentioned. I think that says a lot.
3. UA's international routes are incredible. This is a prize that if used correctly can create a financial powerhouse of an airline.
4. CO would have to buy UA due to the agreement with NWA. The desire would be to maintain the UA name and drop CO. The details of how all this would work is fairly complicated. NWA still maintains the right of first refusal on CO.
Speculation
1. Delta is just dead. Their attempt with Song was a great idea but poorly executed. There is just nothing positive I can say about them. The entire company needs an overhaul. I would love to see Gordon go into Delta. He has done some magic but this would require a miracle worker.
2. UA and CO will merge. I just think it makes a lot of sense.
3. AA will stand alone. The benefit of NWA with AA would be minimal.
4. US/HP is going to be big winners here. I believe they will be a LCC but will starting picking and choosing routes being sold by NWA and Delta.
5. After Delta and NWA finish their culling, you will see a merger of the bones. They will maintain their international routes and the money making regional routes plus a ton of codes share agreements with several LCC. This will benefit all parties and make a nice route map.
6. Southwest - hummmm The speculation is how they will continue to grow. They have it correct on how to run an airline. I am guessing they will start working on some additional code share routes to international locations.
Finally, does anyone know which US airline has the rights to the routes to Cuba if the US government dropped the sanctions? I read an article about Cuba being the next Hawaii in the year 2010.
In reference to speculation #1 above internal reports show that SONG on its own IS a profit center for the airline as a whole. DL has made blunders over the years. One of their bigest problems was that they were WAY cash rich pre 9/11 and had to burn through and then leverage their fleet to stay a float. Factor in also the astronomical cost of fuel today and it is a receipe for where they are today.
All here have to remember the dier striaghts that CO was in TWICE going to BK and look at the company today. Yes the landscape is different but with the right management and today DL's management team, which is new to the helm in respect to how they got to where they are today is poised to maybe make this work.
Their communications have been very open from the time the walked up to the filing window yesterday. They have a comprehensive website up and emails to their customers. They are not just laying down and playing dead. They are in it for the long haul and if they can do what UA did with pensions etc they can do it.
Lets see what they lay out in the next 90 days for the overhaul plan. That will tell the story of whether it can or can not be done.