The market HATES this DAL deal

[tomgoodman]

Synergies must wait

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

Regulators and politicians have to be mollified first, by promising full service everywhere. Once the deal is approved, a convenient economic excuse will allow hub and staff reductions, soothing investors and markets.

 

[BrazPilot]

Blue Horseshoe LOVES Endicott Steel.

Good one! :laugh:

 

[Guitar Guy]

Regulators and politicians have to be mollified first, by promising full service everywhere. Once the deal is approved, a convenient economic excuse will allow hub and staff reductions, soothing investors and markets.

No, they couldn't possibly do that. Why, that would be dishonest.

Oh wait, we are talking about business executives...

Unfortunately, I do believe that you are spot-on, Tom.

 

[General Lee]

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.

To appease the local governments, Anderson made some promises not to CLOSE bases. He never said he wouldn't downsize them. I see CVG and MEM getting a lot fewer flights coming up here. There will still be a presence, but not domination.


Bye Bye--General Lee

 

[pilotyip]

One of our pilots saw this coming and turned down a job at NWA, now sees USA Jet as a career location now. Making near 100K at USA Jet early 40's. He said it would 17 years before his income equaled by going to NWA. That considers NWA F/O pay difference versus what time it would take to make Captain at NWA.

 

[IronCityBlue]

To appease the local governments, Anderson made some promises not to CLOSE bases. He never said he wouldn't downsize them. I see CVG and MEM getting a lot fewer flights coming up here. There will still be a presence, but not domination.


Bye Bye--General Lee

Of course. USAir didn't really "close" PIT. They are still the largest carrier there by a large margin. But they did drastically downsize it. And as far as "hub" is concerned, I don't think regulators will care about pilot or FA domicile. And the only "hubs" even being considered by most to be "closed" would be MEM and CVG. The new Delta (or is it the new new Delta?) will be the largest carrier out of MEM and CVG for a very long time in either case.

 

[WSurf]

To appease the local governments, Anderson made some promises not to CLOSE bases. He never said he wouldn't downsize them. I see CVG and MEM getting a lot fewer flights coming up here. There will still be a presence, but not domination.


Bye Bye--General Lee

GL, And with this merger I can see the government allowing other airlines to bid on some of the international routes the Delta and NWA currently run.

Hell, this might be good for US Airways. Maybe those Airbus 350's might come in good use in the future.

 

[NuGuy]

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

Heyas Fins,

You are on the mark.

They see yet another AWA/AAA deal coming on, with years of discontent on both sides. Makes for slow going and high fuel burns.

Both share prices tanked at the bell...DALs was down 12%.

They could have done better by getting both groups on board and just annoucing that MEM and CVG are going to be pulled, which we all know is going to happen anyway.

So, instead of doing it the easy way, it's going to be the hard way, just like every other time. What's the definition of "insanity"?

Nu

 

[Max Powers]

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$$.

BINGO WE HAVE A WINNER!!!!!!!!!

The cuts will be HUGE!!!!

 

[woody]

One of our pilots saw this coming and turned down a job at NWA, now sees USA Jet as a career location now. Making near 100K at USA Jet early 40's. He said it would 17 years before his income equaled by going to NWA. That considers NWA F/O pay difference versus what time it would take to make Captain at NWA.

I cant imagine anyone living life on that pager for a career! Nothing personal but if this guy has options like NWA to go to then he obviously has enough going for him to carve out a better existance elsewhere!