Trip7
Well-Known Member
Zoooooomg! Seven more days!
Sent from my free Obama Phone
2 MORE DAYS!!!!!
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Delta purchasing Virgin Atlantic?
- Thread starter derg
- Start date
2 MORE DAYS!!!!!
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jtrain609
Antisocial Monster
I hate to write something that Trip7 is going to like, because then it makes ME look like a bag, but...
Why wouldn't Delta and Air France want to get together to purchase Virgin Atlantic? They could buy enough of the company that they could then start selling slots off to Delta and Air France (at a discount, of course!), selling aircraft, selling whatever they wanted. If they managed to get control of the company, they could even run it into the ground and liquidate it, and then Delta and Air France could come in and pick up the pieces.
Basically, the strategy would be to purchase your competitors instead of, well, competing against them. It's an age old tradition, and if it results in one less competitor heading across the pond, then why not?
Trip7
Well-Known Member
Did Skywest purchase XJT to run it into the ground? No
Now if Bain Capital was buying Virgin it would make a little more sense
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WestIndian425
Well-Known Member
jtrain609
Antisocial Monster
There are some folks on the CRJ side that keep saying "Skywest doesn't play games" and that if we don't "play ball" and sign a contract soon, then the ERJ side is going to get spun off. Oh my!
How would Delta integrate a foreign carrier, in the manner that Skywest has with ASA/XJT? The only way I see that happening is to go for an assets grab and leave the (foreign) pilots sitting over in the UK.
What would the investment cost them? $600 million is what the 49% stake went for a few years ago. Say that gets them half the fleet, what do you think that's worth?
WestIndian425
Well-Known Member
Well, Boeing actually did that to MD
Trip7
Well-Known Member
Delta bought the stake that Singapore Airlines owned. Did Singapore Airlines run Virgin into the ground and take their routes over the past several years?
You guys are so paranoid over every business transaction an airline makes. Calm down
highspeed
Well-Known Member
Trip7
Well-Known Member
I dunno, has FedEx, UPS and SWA been paying their pilots well over the past few years out of the goodness of their heart? Or maybe it was because they were highly profitable companies that could afford to pay lucrative labor contracts.
IMO, a deal that improves DAL's market share and profitability, especially in one of the most profitable markets in the world, is good not only for pilots, but for all employees.
Heck my Pops is headed to London today for a meeting scheduled last minute. Company he contacts for spent $11,000 for his business class ticket on Delta.
jtrain609
Antisocial Monster
What did I say is paranoid?
It would be a boom for Delta pilots.
How would that be bad?
Sure the Virgin Atlantic guys get left out in the cold if what I'm hypothesizing comes to fruition, but it WON'T be bad for Delta pilots.
Now if Delta whipsaws Delta pilots against Virgin Atlantic pilots for who can do the North Atlantic cheaper, it'll be bad for Delta pilots. I don't think that'll happen, though.
Trip7
Well-Known Member
By paranoid I meant by thinking a business transaction like this means destruction of one of the airlines, whether it be foreign or not.
Virgin still owns majority control at 51%.
I think you're over thinking it. I believe Delta will join Virgin on some sort of Air France/KLM or Virgin Australia type joint venture and partner to increase market share and profitability rather than competing against each other. Partnerships are all the rave these days. If you can beat them....join em.....
Ask Qantas
SurferLucas
Southern Gentleman
Cav
Former Maddog Whisperer
Look I'm not paranoid about anything. Hell we have little to no idea what the intentions are with this transaction. I'm all for a profitable company that makes smart strategical moves. jtrain609 will be the first to tell you that I'm pretty much a fiscal conservative and I'm under no illusion that working for a profitable company is not better than the alternative. But I understand that in the end, for those of us sitting in the pointy end, hiring, career progression, and outsourcing have far greater impact on our lives than does a transaction that drives share price. I guess I'm pessimistic because the trend has been a steady migration from European point to point service to a hub and spoke at a foreign port using codeshare agreements. NWA did it that way.
Think of it this way, if Southernjets only works a few flights to AMS and LHR and farms out the rest, throw in the new 9 hr two man unaugmented rest rules (LHR no problem!), loosened work rules, and BAM! Translation...a lot of you are going to be sitting on the sidelines a lot longer than you planned. Hell Trip7 will have to change his screen name to @Double7w/a1 because that's the best he can hope for.
But go ahead Trip7 go ahead and tell me why I'm wrong, have no idea what is really going on with my company, how our scope will protect us, and why I should just put my feet up, smile, and check for the next press release because everything is A OK.
Think of it this way, if Southernjets only works a few flights to AMS and LHR and farms out the rest, throw in the new 9 hr two man unaugmented rest rules (LHR no problem!), loosened work rules, and BAM! Translation...a lot of you are going to be sitting on the sidelines a lot longer than you planned. Hell Trip7 will have to change his screen name to @Double7w/a1 because that's the best he can hope for.
But go ahead Trip7 go ahead and tell me why I'm wrong, have no idea what is really going on with my company, how our scope will protect us, and why I should just put my feet up, smile, and check for the next press release because everything is A OK.
deadpixel
Well-Known Member
Delta should be getting a lot more slots now in LHR which is what the biggest feeder into Europe? Question is if they well have delta mainline flying from the hubs to lhr or have virgin atlantic doing more of the flying..
380 million is a huge chunk of cash, anyone know how they paid for it by any chance?
380 million is a huge chunk of cash, anyone know how they paid for it by any chance?
This document is available on the Delta MEC website at http://dal.alpa.org.
December 11, 2012
12-12
Delta and Virgin Atlantic Announce Strategic Alliance
-Delta Intends to Purchase a 49% Stake in Virgin Atlantic-
-Carriers Intend to Form Joint Venture-
Today, Delta Air Lines announced its intent to purchase Singapore Airlines’ 49% stake in Virgin Atlantic, a British airline owned by Sir Richard Branson's Virgin Group (51%) and Singapore Airlines (49%). The Company and Virgin Atlantic also announced their intent to form a joint venture.
Rumors of this announcement first surfaced early last week when Reuters and other new agencies reported that Singapore Airlines was interested in selling its 49% stake in Virgin Atlantic. The reports named Delta as an interested party in acquiring Singapore’s stake. In the weeks and months ahead, we can expect a great deal of speculation to take place with respect to the details of the alliance. Keep in mind, however, that it is very early in this yet-to-be written story, so it is premature to predict what the end-state might eventually look like from a pilot perspective.
What we do know is that our industry is a dynamic one and that Delta is often interested in taking advantage of strategic opportunities. Last week’s news reports stated that Delta “has been looking to acquire a stake in Virgin Atlantic for more than two years in an effort to expand its access to London's Heathrow airport.” Heathrow is a slot restricted airport and Delta has publicly expressed an interest in obtaining additional Heathrow slots in the past. Slots are quite expensive; A few years ago, Continental purchased four pairs of Heathrow slots for around $210 million.
It will be senior management’s job to provide additional information as the story unfolds. This is a very complex situation with a lot of moving parts including not only a commercial agreement, but the involvement of several international carriers as well as European Union (EU) and U.S. government regulatory agencies.
European law does not allow a US carrier to buy more than 49% of an EU carrier. Further, Delta would not “control” a foreign carrier (in the PWA legal sense) if it were to buy up to 49% of Virgin Atlantic. Our PWA defines control as ownership of more than 49% of a foreign carrier. There are other contractual provisions in the control definition as well.
We do not yet fully know what Delta’s business plan might ultimately entail with respect to the proposed alliance. According to the joint corporate press release, the alliance will permit “both carriers to offer a greatly expanded network at Heathrow.” The move could also be a defensive maneuver to preempt a similar move by a Middle Eastern carrier. From a PWA contractual standpoint, Delta is free to make the proposed investment and enter into the joint venture. There are, however, contractual issues that could come into play. The airlines announced that they will also file an application with the U.S. Department of Transportation for antitrust immunity (ATI) accompanied by the joint venture application, which “also will be reviewed by the U.S. Department of Justice and the European Union’s competition regulator and other relevant authorities.” In the last few years, the U.S. Department of Transportation (DOT) has granted ATI only in cases where there has also been a “metal neutral” joint venture in place.
If Delta enters into a joint venture with Virgin Atlantic, it must meet the requirements and restrictions of Section 1.E. (Permitted Arrangements with Foreign Air Carriers). We encourage you to review this section of the contract, but some highlights include:
• 1 E.8. In the event the Company or a Company affiliate enters into or maintains a profit/loss sharing agreement with a foreign air carrier, Company flying between the United States and the home country of such foreign air carrier . . . [will] be no less than the Company’s scheduled block hours between the United States and any such country in the same three months of the twelve-month period prior to the month in which such agreement first became effective.
• 1 E.9. Before any such amended or new profit/loss sharing agreement is finalized, the parties will meet for the purposes of negotiating terms applicable to such amended or new profit/loss sharing agreement.
An important point to remember is that the ATI process typically takes 9 to 12 months to complete, so there's plenty of time for discussions between ALPA and Delta to take place if necessary. In short, if the investment in Virgin Atlantic and the joint venture come to fruition, we will enter into negotiations on the terms of a production balance with Delta that protects the careers and addresses the concerns of the Delta pilots, as well as addresses any other issues that might be raised by this strategic alliance.
We view today’s announcement as an opportunity for Delta but also with a degree of caution. The investment represents a large financial stake in a foreign carrier and is an example of further global consolidation that is taking place in our industry. It could place Delta in an advantageous position vis-à-vis other domestic and foreign carriers. Remember, however, that it is very early in this story, and a lot of things must play out favorably for Delta in order for the Company to execute the commercial transaction and any down line agreements. The MEC’s International Affairs and Alliances Committee will remain fully engaged and carefully monitor progress of the proposed transaction and related issues to ensure protection of the careers of Delta pilots. We will keep you updated as the situation develops.
Air Line Pilots Association, International
www.alpa.org
If you wish to unsubscribe, please click here to login and update your Standard Mailings/E-Mail Distribution Lists preferences.
December 11, 2012
12-12
Delta and Virgin Atlantic Announce Strategic Alliance
-Delta Intends to Purchase a 49% Stake in Virgin Atlantic-
-Carriers Intend to Form Joint Venture-
Today, Delta Air Lines announced its intent to purchase Singapore Airlines’ 49% stake in Virgin Atlantic, a British airline owned by Sir Richard Branson's Virgin Group (51%) and Singapore Airlines (49%). The Company and Virgin Atlantic also announced their intent to form a joint venture.
Rumors of this announcement first surfaced early last week when Reuters and other new agencies reported that Singapore Airlines was interested in selling its 49% stake in Virgin Atlantic. The reports named Delta as an interested party in acquiring Singapore’s stake. In the weeks and months ahead, we can expect a great deal of speculation to take place with respect to the details of the alliance. Keep in mind, however, that it is very early in this yet-to-be written story, so it is premature to predict what the end-state might eventually look like from a pilot perspective.
What we do know is that our industry is a dynamic one and that Delta is often interested in taking advantage of strategic opportunities. Last week’s news reports stated that Delta “has been looking to acquire a stake in Virgin Atlantic for more than two years in an effort to expand its access to London's Heathrow airport.” Heathrow is a slot restricted airport and Delta has publicly expressed an interest in obtaining additional Heathrow slots in the past. Slots are quite expensive; A few years ago, Continental purchased four pairs of Heathrow slots for around $210 million.
It will be senior management’s job to provide additional information as the story unfolds. This is a very complex situation with a lot of moving parts including not only a commercial agreement, but the involvement of several international carriers as well as European Union (EU) and U.S. government regulatory agencies.
European law does not allow a US carrier to buy more than 49% of an EU carrier. Further, Delta would not “control” a foreign carrier (in the PWA legal sense) if it were to buy up to 49% of Virgin Atlantic. Our PWA defines control as ownership of more than 49% of a foreign carrier. There are other contractual provisions in the control definition as well.
We do not yet fully know what Delta’s business plan might ultimately entail with respect to the proposed alliance. According to the joint corporate press release, the alliance will permit “both carriers to offer a greatly expanded network at Heathrow.” The move could also be a defensive maneuver to preempt a similar move by a Middle Eastern carrier. From a PWA contractual standpoint, Delta is free to make the proposed investment and enter into the joint venture. There are, however, contractual issues that could come into play. The airlines announced that they will also file an application with the U.S. Department of Transportation for antitrust immunity (ATI) accompanied by the joint venture application, which “also will be reviewed by the U.S. Department of Justice and the European Union’s competition regulator and other relevant authorities.” In the last few years, the U.S. Department of Transportation (DOT) has granted ATI only in cases where there has also been a “metal neutral” joint venture in place.
If Delta enters into a joint venture with Virgin Atlantic, it must meet the requirements and restrictions of Section 1.E. (Permitted Arrangements with Foreign Air Carriers). We encourage you to review this section of the contract, but some highlights include:
• 1 E.8. In the event the Company or a Company affiliate enters into or maintains a profit/loss sharing agreement with a foreign air carrier, Company flying between the United States and the home country of such foreign air carrier . . . [will] be no less than the Company’s scheduled block hours between the United States and any such country in the same three months of the twelve-month period prior to the month in which such agreement first became effective.
• 1 E.9. Before any such amended or new profit/loss sharing agreement is finalized, the parties will meet for the purposes of negotiating terms applicable to such amended or new profit/loss sharing agreement.
An important point to remember is that the ATI process typically takes 9 to 12 months to complete, so there's plenty of time for discussions between ALPA and Delta to take place if necessary. In short, if the investment in Virgin Atlantic and the joint venture come to fruition, we will enter into negotiations on the terms of a production balance with Delta that protects the careers and addresses the concerns of the Delta pilots, as well as addresses any other issues that might be raised by this strategic alliance.
We view today’s announcement as an opportunity for Delta but also with a degree of caution. The investment represents a large financial stake in a foreign carrier and is an example of further global consolidation that is taking place in our industry. It could place Delta in an advantageous position vis-à-vis other domestic and foreign carriers. Remember, however, that it is very early in this story, and a lot of things must play out favorably for Delta in order for the Company to execute the commercial transaction and any down line agreements. The MEC’s International Affairs and Alliances Committee will remain fully engaged and carefully monitor progress of the proposed transaction and related issues to ensure protection of the careers of Delta pilots. We will keep you updated as the situation develops.
Air Line Pilots Association, International
www.alpa.org
If you wish to unsubscribe, please click here to login and update your Standard Mailings/E-Mail Distribution Lists preferences.
