The market HATES this DAL deal

[~~~^~~~]

http://finance.yahoo.com/q/cq?d=v1&s=dal+nwa+aa+uaua+lcc+cal+aai

Candidly, I am surprised.

Reasons cited:

• No cuts in flights
• No reductions in staff
• No hub reductions
• "Rich Delta Pilot Pay" (doesn't exceed inflation rate in reality)
• NWA pilots & rampers against the deal

Seems like the market just is not happy unless there is blood on the floor. But the truth is, after bankruptcy there is not much bloodletting to be had. Both companies are lean.

The credit markets are similarly unimpressed. One actually lowered the combined airline to B, despite all the cash and improving cash position.

 

[Occam's Razor]

Who cares?

Blue Horseshoe LOVES Endicott Steel.

 

[Geronimo4497]

There is no deal, as of yet. Just intent.

 

[The_Russian]

Because businessmen have no idea how airplanes or airports work.

This is why we are where we are.

 

[~~~^~~~]

Top Ten List;


1. An Atlanta-Shreveport flight suddenly shows up on Northwest's summer schedule.
2. The press release announcing Northwest's April 23 first-quarter earnings call is redistributed, with Atlanta replacing Eagan, Minn., in the dateline.
3. The Aircraft Mechanics Fraternal Association issues a press release declaring itself "the most competent mechanics' union on the property."
4. Delta CEO Richard Anderson tells a close friend that while Atlanta is his winter home, he sees value in spending summers in the Twin Cities.
5. The carriers issue a press release proclaiming they were neutral during the 1991 World Series.
6. "Midnight Train to Georgia" is heard playing in the Northwest employee cafeteria.
7. A fleet of UPS(UPS - Cramer's Take - Stockpickr) trucks shows up at Northwest's Memphis hub and begins carting everything and everybody off to Atlanta.
8. The carriers withdraw their application for Transportation Department approval of the six-way antitrust immunity for SkyTeam, saying approval is no longer need because now just one U.S. carrier is involved.
9. Northwest demands immediate construction of a sixth runway at Minneapolis-St. Paul, saying it cannot operate with fewer. 10. And the best way to tell that Northwest is merging with Delta: The directors at the closed-door board meeting send out for Cokes.

 

[~~~^~~~]

Sexy Merger Table Talk:

http://www.thestreet.com/video/10412079/they-just-dont-get-sexy-mergers.html#10412079

 

[maxblast72]

Reasons cited:

• No cuts in flights
• No reductions in staff
• No hub reductions
• "Rich Delta Pilot Pay" (doesn't exceed inflation rate in reality)
• NWA pilots & rampers against the deal

Seems like the market just is not happy unless there is blood on the floor. But the truth is, after bankruptcy there is not much bloodletting to be had. Both companies are lean.

A hub in ATL, CVG, DTW, MEM, and MSP is just too many domestic hubs eastern half of the United States to compete with the LCC's. I think most analysts were hoping for the traditional merger where unprofitable hubs and flights get chopped.

I have to imagine the international routes are minting money while a good portion of the domestic routes are money losers. I would also bet the analysts were hoping for a higher percentage of ASMs to be in the international markets going forward (ie some closing of the domestic hubs that have little international emphasis). Anderson has not stated this is going to happen yet.

 

[IronCityBlue]

Its incredibly shortsighted to bet the entire farm, long term, on only international. There is nothing magical about flying across a border other than the VERY temporary lack of competition right now. Tht will change, and sooner than most realize. Airlines must be able to compete in all markets to be viable long term.

 

[KCPilot]

Who cares?

Blue Horseshoe LOVES Endicott Steel.

LOL, but it does seem that way!

 

[Bavarian Chef]

A hub in ATL, CVG, DTW, MEM, and MSP is just too many domestic hubs eastern half of the United States to compete with the LCC's. I think most analysts were hoping for the traditional merger where unprofitable hubs and flights get chopped.

I have to imagine the international routes are minting money while a good portion of the domestic routes are money losers. I would also bet the analysts were hoping for a higher percentage of ASMs to be in the international markets going forward (ie some closing of the domestic hubs that have little international emphasis). Anderson has not stated this is going to happen yet.

Because they have to say that no hubs will close, nor furloughs initiated in order to hoodwink the DOJ / Congress / public opinion.

Then once it approves, the other shoe comes and kicks you right in the a$$.