AVSIG: USAir to Buy Delta? wwswsigarch.jpg (7236 bytes)

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Tom Tyson [SUW]
Glider Guider


Reged: 05/27/04
Posts: 4691
Loc: KSUW
USAir to Buy Delta?
      #133735 - 11/15/06 03:24 AM

From the USAir Website ( www.usair.com )

Quote:

US Airways has announced a proposal to merge with Delta Air Lines. The transaction is valued at approximately $8.0 billion in cash and stock. The combination of US Airways and Delta would create one of the world’s largest airlines. As a combined company, the “New” Delta would be the number one airline across the Atlantic to Europe 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.




- TT

--------------------
Tom Tyson-A&P

Pilots without Mechanics are just Pedestrians with fancy watches.


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Joe Budge (W29)
Top Gun


Reged: 04/30/04
Posts: 7423
Re: USAir to Buy Delta? [Re: Tom Tyson [SUW]]
      #133737 - 11/15/06 03:54 AM

Interesting move. More details here.

In discussing the advantages of the merger they use the word "synergy" a lot. I suppose that's a euphamism for "layoffs"?

Regards,
Joe


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Don Peters (CMH)
AVSIG Member


Reged: 09/19/05
Posts: 33
Loc: Columbus, OH.
Re: USAir to Buy Delta? [Re: Tom Tyson [SUW]]
      #133761 - 11/15/06 08:28 AM

Which Legacy Carriers are next for Consolidation? or in other words, reducing the numbers of competing US market hubbing systems. By the way, Where did the 8 Billion in cash come from ? America West or old USAir or ??? foreign or domestic sources ? Don

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Scott Dyer [HPN/NY]
Top Gun


Reged: 01/11/03
Posts: 20065
USAir to Buy Delta? [Re: Don Peters (CMH)]
      #133770 - 11/15/06 09:26 AM

Don -- Looks to me like it is only $4 billion in cash, the rest in stock.
The stock value no doubt benefits from the appreciation since the AWA
transaction. From the investor presentation I've seen, the cash is fully
financed (in addition to a refi of some existing debt).

--------------------
www.scottdyercfi.com


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Don Brown (ZTL-Retired)
Top Gun


Reged: 06/10/05
Posts: 2334
Loc: 3309/8421
Re: USAir to Buy Delta? [Re: Don Peters (CMH)]
      #133788 - 11/15/06 11:29 AM

Quote:

Which Legacy Carriers are next for Consolidation? or in other words, reducing the numbers of competing US market hubbing systems. By the way, Where did the 8 Billion in cash come from ? America West or old USAir or ??? foreign or domestic sources ? Don




Or pilot pension plans ? :( (yeah, I know, they weren't paying into them anyway)

--------------------
Don Brown
http://gettheflick.blogspot.com


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Stephanie Belser-2
Top Gun APC


Reged: 04/28/04
Posts: 7139
Loc: KFAM
USAir to Buy Delta? [Re: Joe Budge (W29)]
      #133817 - 11/15/06 04:48 PM

Um, wasn't USAir just in bankruptcy? Does this have the potential to result
in the airline equivalent of the Penn Central RR?

Stephanie

--------------------
If you wish to make an apple pie from scratch, you must first invent the universe.-- Carl Sagan


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Bruce Gorrell [EQY]
Top Gun


Reged: 04/29/04
Posts: 7864
Loc: Charlotte, NC
Re: USAir to Buy Delta? [Re: Tom Tyson [SUW]]
      #133819 - 11/15/06 05:14 PM

Parker needs to finish with the can of worms he has now before he opens another one.

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Joe Budge (W29)
Top Gun


Reged: 04/30/04
Posts: 7423
Re: USAir to Buy Delta? [Re: Stephanie Belser-2]
      #133826 - 11/15/06 05:34 PM

<< Um, wasn't USAir just in bankruptcy? Does this have the potential to result in the airline equivalent of the Penn Central RR? >>

That was my original thought as well, but then I thought better. With the current economic climate airlines are going to keep on going down the tubes until capacity is reduced sufficently for the folks left standing to turn a profit. USAir thinks they can reduce capacity of the combined companies an additional 10% with this merger. That's a step in the right direction - and may help make sure they make the cut. It's kind of like the old story of being chased by the bear - all you have to do is run faster than the other guy. In this immediate case the "other guy" is NWA, also in bankrupcy. But in the longer term, like with Penn Central, it's an open question if that will be enough.

Regards,
Joe


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Robert Mann [HPN-NY]
AVSIG Member


Reged: 05/15/04
Posts: 11777
Loc: NY
Re: USAir to Buy Delta? [Re: Joe Budge (W29)]
      #133874 - 11/16/06 06:36 AM

Joe,

<<In discussing the advantages of the merger they use the word "synergy" a lot. I suppose that's a euphamism for "layoffs"?>>

That's correct. A significant part of the synergy of mergers is the opportunity for cost savings. (Not dissimilar to the cost savings that result when two single individuals living in seperate households get married.) There is a lot of duplication when two companies merge which can and should be eliminated. A lot of that duplication is at the middle and upper management levels.

--------------------
Best,

Bob


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Stephanie Belser
Top Gun APC


Reged: 04/29/04
Posts: 5929
Loc: KFAM
Re: USAir to Buy Delta? [Re: Tom Tyson [SUW]]
      #133876 - 11/16/06 07:16 AM

From today's edition of the Borowitz Report:

Quote:

Elsewhere, US Airways made an $8 billion bid for Delta, including $4 billion in cash and $4 billion in lost luggage.




Stephanie


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