US Airways bids for Delta
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US Airways announced an $8 billion cash and stock bid to buy Delta out of bankruptcy. If it goes through, the new company will fly under the Delta banner.
It’s pretty remarkable that US Airways is doing this, since they’re not even finished digesting their previous merger (when America West bought the old US Airways and took over the older rival’s name.)
The merger would mean a 10% cut in capacity (i.e., fewer seats, higher prices, fuller planes) and inevitable job losses in cities served by both airlines. Consumers and employees are likely losers here.
Two questions on my mind:
1) Will the emergent Delta be a member of Star Alliance or SkyTeam? I’d put my money on SkyTeam, given Delta’s size and international presence, compared to US Airways.
2) Will this announced offer lead to more mergers? United+Continental has been talked about for some time, though the latest buzz has United going private. But airlines are making money, for now, and the impetus to merge has faded somewhat. US Airways is striking now, while Delta is still in bankruptcy court, and control of the company rests with creditors.
We’ll see what happens.
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November 15th, 2006 at 10:34 am |
I certainly hope that any merger will bring DAL into Star. But I am sure that is one of the later things to be worked out.
Doug Parker is certainly ambitious. The paint hasn’t even dried on a lot of Catcus planes yet and he is wanting to repaint them DAL colors.
And it certainly is starting to sound like a hositle takeover. Parker is appealing to passengers and creditors.
November 15th, 2006 at 10:52 am |
Indeed, it’s ambitious. Maybe too much so. The US Airways fleet and the Delta fleet are two different animals.
And will the Federal Trade Commission allow a merger? Maybe if they sell the US or DL shuttle operations on the New York-DC/Boston routes.
I think US Airways might find some support among Delta creditors, but support from passengers? What’s in it for them?
November 15th, 2006 at 11:14 am |
US Airways certainly is trying. All over their website, possible route structure, lower fares matrix, etc. The general promotions from the airline trying to gain support.
Be interesting to see how things play out though.
November 20th, 2006 at 5:20 pm |
God FORBID that Mr. Parker & his “raiders” succeed in convincing the bankruptcy court to permit a hostile takeover. As a multiple Million Miler and multi-year elite with DAL, I can say that Delta is not what it used to be, but their “Southern roots” and VERY decent people still show. HOWEVER, I can also speak to my too numerous, dreadful experiences with both US “Scareways” and America West. Their mistreatment of and downright rude behavior of USA/AWE staff to me as a “Y” paying customer could fill terabytes! Give me DAL any day, warts and all, before USA/AWE anytime. Like with Southwest, I sooner walk than fly them, thank you.