US Airways increases offer for Delta Air Lines

wheelsup

wheelsup

Well-Known Member
I didn't see this on here yet...



ATLANTA - US Airways Group Inc. raised its offer for Delta Air Lines Inc. by 20 percent to $10.2 billion on Wednesday, as it seeks to put pressure on the bankrupt carrier’s creditors to agree to a deal that Delta’s management opposes.

http://www.msnbc.msn.com/id/16558617/
 
Honestly, I hope it happens with the hope that it'll cause ticket prices to go up making pilot pay/respectability go back up. It didn't dawn on me until my training plane didn't start and the cost for my instructor was ONLY $39
 
And the instructor probably didn't get all $39 either. At UVSC they only get about half of what they charge and the college keeps the rest.

If ticket prices go up, will they really use they money to pay pilots more?
 
LoadMasterC141 said:
Will Delta fold on this one, or is it all just moot?
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There's no real "Delta" to fold. Delta's fate was put into the hands of the creditors when they filed for bankruptcy. USAir's offer is an alternate reorganization plan. Delta can't counter-offer, management can only talk up their plan and talk down USAir's. I'm sure management will continue to push their own plan.
 
TheWife said:
And the instructor probably didn't get all $39 either. At UVSC they only get about half of what they charge and the college keeps the rest.

If ticket prices go up, will they really use they money to pay pilots more?
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Ticket prices don't really have anything to do with pilot salaries anyway. Profits/losses can have an effect, and pilot supply vs. demand certainly does.
 
That's because USAirways was able to secure another investor in addition to Citi. Doogie P. must be offering them sweet deals.:confused:
 
Apparently Morgan Stanley put their hand in the cookie jar to help old Dougie beef up the offer. Still don't see it being accepted though, because this plan still does not address many of the issues that arose with the last offer, and adds 1 billion on to the total debt associated with this proposed mereger.

With this offer expiring on February 1 however, I look for old Dougie to keep pursuing funds and try and make one more higher offer before Feb. 7, which is when I believe some of the creditors begin voting on the proposal.

Just my two cents worth on the subject anyway.

Quote from upper management here at DL...

" Delta's Board of Directors will fulfill its fiduciary duty to review the revised unsolicited merger proposal announced today by US Airways. Delta noted that, on its face, the revised proposal does not address significant concerns that have been raised about the initial US Airways proposal and, in fact, would increase the debt burden of the combined company by yet another $1 billion."
 
$10 billion just isn't enough. Delta's european routes alone should be worth what 10-15 billion.

To through out a figure. I say Delta is worth $22-50 billion!
 
Maximillian_Jenius said:
$10 billion just isn't enough. Delta's european routes alone should be worth what 10-15 billion.

To through out a figure. I say Delta is worth $22-50 billion!
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:yeahthat: I was thinking the same thing. Why does U.S Airways want Delta so badly? Just curious.
 
Why would’nt you want to eat up your competitors in a world where only the lowest fare means anything? No competition in more markets means they can raise prices. Not saying that is an entirely bad thing either.
 
Doug Taylor said:
Cuz he's going to get his ass whipped post bankruptcy! :)
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Bingo. Sure you can raise fares due to lack of competition, but what difference does it make when the extra money is going to service extra debt you've taken on. It doesn't increase the profit margin nor does it increase the divedends for the shareholders. If people decide they don't want to pay the extra because of the price increases, now you can't service the $1 billion in debt, and you wind up right back where you started.
 
kellwolf said:
Bingo. Sure you can raise fares due to lack of competition, but what difference does it make when the extra money is going to service extra debt you've taken on. It doesn't increase the profit margin nor does it increase the divedends for the shareholders. If people decide they don't want to pay the extra because of the price increases, now you can't service the $1 billion in debt, and you wind up right back where you started.
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I'm almost done reading "Splash of Colors", by John Nance about the demise of Braniff Airlines. Towards the end the Braniff chiefs shopped the airline around to be sold...but in the end no one was interested due to the extremely high debt load that would have to be aborbed.

The Delta bankruptcy has restructured $22B worth of debt down to $10B with a projected ASM cost around 6.5 cents. I'm not sure those with a long term interest in Delta would be willing to trade the reorganized terms for those of a riskier balance sheet...even with a higher upfront payout. I suppose time will tell.
 
B767Driver said:
I'm almost done reading "Splash of Colors", by John Nance about the demise of Braniff Airlines. Towards the end the Braniff chiefs shopped the airline around to be sold...but in the end no one was interested due to the extremely high debt load that would have to be aborbed.

The Delta bankruptcy has restructured $22B worth of debt down to $10B with a projected ASM cost around 6.5 cents. I'm not sure those with a long term interest in Delta would be willing to trade the reorganized terms for those of a riskier balance sheet...even with a higher upfront payout. I suppose time will tell.
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The thing is Delta and USAir have to have many of the same players as creditors. So the real dealing is being done behind the scenes by people with interests in both operations.

The Braniff demise was another time. Braniff's competitors knew that if they passed on Braniff it would just go out of existense. After all, no one would ever ride on a bankrupt airline so there was no consideration of a Chapter 11 reorganization. Lorenzo changed that "rule".
 
SeanD said:
I was thinking the same thing. Why does U.S Airways want Delta so badly? Just curious.
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To reduce competition.

Let's all go back to our eco glass in high school. Remember the lesson about supply-and-demand that half of us slept through? Well, I guess it actually does kinda a role in life. :)

Right now the airlines have this huge demand. Now typically, this would be a great thing. However, the airlines also have this huge supply that is equal or greater than the demand. There is no security in that. This industry needs to reduce the supply so airlines (save WN) can get its pricing power back. Until then, all the airlines are WN b*****.
 
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:
20070110:MTFH52458_2007-01-10_20-00-22_N10368834&type=comktNews&rpc=44

CHICAGO, Jan 10 (Reuters) - Delta Air Lines Inc. (DALRQ.PK: Quote, Profile , Research) and Northwest Airlines Corp. (NWACQ.PK: Quote, Profile , Research) are in talks on a possible link-up, the Wall Street Journal reported on Wednesday.

The newspaper, which cited sources "familiar with the matter", said representatives of the two carriers, which are No. 3 and No. 5 in the United States respectively, have met regularly for weeks discussing a possible link-up after they both emerge from bankruptcy.

The two airlines have been restructuring in bankruptcy since September 2005 and aim to exit this year. A Northwest spokesman declined to comment. Delta officials were not immediately available for comment.

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The report came in the wake of news that US Airways Group (LCC.N: Quote, Profile , Research), which made a hostile bid for Delta in November, has raised its offer to $10.3 billion.

Delta management had rejected the original US Airways bid, but US Airways hopes to persuade the carrier's creditors to have management reconsider.

Delta's 8.3 percent bond due in 2029 is now up 5 cents on the dollar at 69 cents, according to MarketAxess. Northwest's 10 percent bond due in 2009 is up nearly 4 cents at 100 cents.

Northwest shares gained nearly 10 percent to $5.05 in afternoon trading. Delta shares were up more than 6.5 percent at $1.39.

Delta has filed a plan to exit bankruptcy as a stand-alone company. Northwest has said it plans to file its own reorganization plan by Jan. 16.
 
flywithUS said:
Right now the airlines have this huge demand. Now typically, this would be a great thing. However, the airlines also have this huge supply that is equal or greater than the demand. There is no security in that. This industry needs to reduce the supply so airlines (save WN) can get its pricing power back. Until then, all the airlines are WN b*****.
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Tried non-revving lately? I don't buy the whole "too many seats" things. At least on my little pansy, Barbie jet, I'm full on just about every leg.....
 
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