Delta Bids on Most USAir Assets

 
Old Jan 27, 04, 11:49 am
  #1  
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Delta Bids on Most USAir Assets

Reports are that four airlines are bidding for USAir assets, including Delta for most everything except the Shuttle.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Atlanta-based Delta, which already flies an East Coast Shuttle, was said to be interested in US Airways' non-hub flying slots and "pretty much everything" except the shuttle, according to one source.

Delta spokeswoman Peggy Estes declined to comment but noted that Chief Executive Gerald Grinstein said in the airline's recent quarterly conference call that "it's no secret that almost every airline has had discussions with 'US Air.' There have been some talks about it, and there are some areas of interest."</font>
WOW!

[edited for URL - duh]

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[This message has been edited by LexPassenger (edited Jan 27, 2004).]
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Old Jan 27, 04, 12:06 pm
  #2  
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where will the money come from for this? They certainly can't waste the cash they have on-hand in this economy.

Will they dilute shareholder equity by issuing more stock to raise money? That is a hard sell in their financial position.

Would they float additional debt to pay for it? With their current rating, they would pay up the nose in excess interest for the money needed to buy these assets...

Or they consider this to be a strategic decision...buy USAir...cherry-pick out the few assets/routes they want, then shut everything else down and kill off a competitor so they can dominate the east-coast market. Hmmm...that sounds like what they did with Pan Am. Hold out an olive branch to a competitor then stab them with it.
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Old Jan 27, 04, 12:08 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by bocastephen:
Or they consider this to be a strategic decision...buy USAir...cherry-pick out the few assets/routes they want, then shut everything else down and kill off a competitor so they can dominate the east-coast market. Hmmm...that sounds like what they did with Pan Am. Hold out an olive branch to a competitor then stab them with it.</font>
Another reason is to prevent the slots from falling into the wrong hands. Imagine the chaos for DL if Jetblue/Airtran got their hands on a 100+ slots at LGA or DCA!!!
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