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Delta Air Lines, Inc. Message Board

  • wingdoc wingdoc Mar 26, 1998 10:04 AM Flag

    DAL talks with AWA?

    I have been told that DAL and AWA are currently holding meetings in PHX. Can anyone confirm this? If so, is it regaurding code-share, merger, or acqusition? Any other thoughts?

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    • Doc, Last week it was said that the Delta Execs might have taken a journey to the Valley of the Sun. Wonder if perhaps the
      word around Hotlanta has them back in town yet with any new news as to any intentions they may or may not have. Or, are they
      visiting the windy city at this time. Just wondering what the word is around the camp fire at tech ops/mtx/Spondivots there in widget
      land might be. You have had some compelling insights on a maybe so or maybe not cactus+widget union. Any more info that would be
      appreciated. It would appear that AWest would be a easy takeover and instant fleet/manpower/left coast feed where as a UAL would be nice
      ......but might excite those in D.C.

    • Any idea what effect this would have on DAL and UAL stock prices. Definitely gave CAIB a boost. Thnx.

    • By Scott Thurston, The Atlanta Journal-Constitution

      Delta Air Lines has had informal discussions with United Airlines about a marketing alliance, which would marry two powerful route systems but also raise antitrust issues.

      A spokesman for Atlanta-based Delta declined to comment specifically about a potential United linkup but acknowledged the carrier is looking at various options.

      "We've talked to numerous carriers," spokesman Bill Berry said. "We've approached them, and they've approached us."

      It's known a Delta-United alliance, in which the carriers sell seats on each others' flights and offer connections, is among scenarios Delta's strategic planners have been studying since the airline's failed effort to buy Continental this past winter.

      Speculation about such an alliance was fueled by a Bloomberg News report that cited a United pilots union analysis suggesting Delta might seek a partnership. The pilots report said Delta stands to lose domestic market position from the pending alliance between Northwest and Continental, and "may attempt to initiate some activity" in response, with United its most desired target.

      PaineWebber analyst Samuel Buttrick noted United and Delta account for 36 percent of U.S. airline traffic. An alliance would combine United's strength in the Midwest, Far West and Asia with Delta's in the East and Europe.

      "While the direct overlap may not be problematic from an antitrust standpoint, the overall scale of the deal might be," Buttrick said. Federal regulators have yet to approve the Continental-Northwest alliance, Buttrick noted, and the political climate has shifted against airline moves that could be viewed as anticompetitive.

      But if the Northwest-Continental deal gets the green light, some airline watchers say regulators would be hard-pressed to stop partnerships among the remaining big airlines, with Delta-United and American-US Airways as possible pairings.

      On the other hand, Delta Chief Executive Officer Leo Mullin, following the failed bid for Continental, downplayed the strategic virtues of alliances, as opposed to mergers, because the two partners remain independent with separate interests and strategies.

      A United spokesman declined to comment, while a spokeswoman for the carrier's pilot union said the report cited by Bloomberg was "speculative in nature."

    • I agree with all of the rumors, and I must again say rumors about the AWA/DAL deal.However, I was told by a wise man that
      opinions and rumors are worth exactly what you pay for them.They are free, right?Does anyone have any knowledge to substantiate
      theses rumors, like newspaper articles, or are you management types. Obviously, you are all pilots or something because of your
      technical knowledge.Well, I have one for you guys...Yesterday on CNBC said that DAL/UAL were talking codeshare.Anyone know about this

    • My point in my previous message was that DAL operates 767s with two, 2, II, engine configurations. Why would they let another configuration of the 757 stop them? I never said that GE engines were offered on the 757, only the 767. For all I care they could put rockets on them.

    • Agreed that DAL is obviously moving in the direction of expansion. The addition of Warren Jenson is clear signal that this
      is how and is the only way DAL can expand at this time. Is AWA a practical choice for DAL? They have relatively cheap labor at
      the present time, and they also have a F/A union in prolonged and bitter negotiations. DAL does not and probably will not have a
      F/A union in it's future. Translation, a lot of excess baggage that DAL or any other carrier would have to contend with. So,
      this paints a little different picture than the merger that DAL/WAL worked through in the 80's. A/C fleets and routes would not
      be a big problem as everyone is in a freenzied search for available lift. With the loss of the CAL deal, DAL is left with few
      options for out right buy out/merger scenarios or possibilities in the US that would not be out of their price range, or, the
      scrutiny of Klein at the Justice Dept. AWA might be good fit, but there are a few others as well. Alaska would be one but they appear
      to want to stay independent at this time. The nest few weeks/months will unveil more, but first, for a DAL/AWA deal Bonderman
      will seek top dollar. And IF AWA is attractive to DAL, it will also be attractive to others.

    • IF this did happen, DAL/AWA would not have too much trouble getting rid of the A320s. With the current state of the industy,
      and aircraft in high demand, the A320s could be sold to someone who does operate them. If this turns out to be a code share
      agreement, then I doubt that AWA would change their fleet too much unless they are hopeful of a future merger. As for right now, their
      best bet is to at least maintain the status quo and try to be the best that they can. Then, at least, they will improve thier

    • Given the management philosophy @ AWA, does anyone believe that they are in it for the long run? I think they would welsome
      a golden parachute for the right price.I think that the labor groups could work something out.It would not be hard to merge
      1330 pilots into the seniority list in some mutually equitable way.How bout the A320s, AWA has 45-50 on order to be delivered by
      2002.Does this throw a wrench into the rumored DAL/AWA scenario?DLX could own LAS and PHX.Who would fly SWA if you could fly DLX and
      get frequent flyer miles on DAL.AWA management seems pretty hard-headed, and they will want as much as they can get from DAL if
      there is indeed a acquisition.What do you all think?

    • I appriciate the comments, sunhillow, as well as everyone else.

      Could the CMH hub for AWA make a good hub for DLX? Would the ALPA allow such a rapid expantion of DLX under the current contract? I'm sure some sort of agreement could be reached.


    • DAL needs 737's asap if not sooner. AWA brings that,
      as far as the A320'S go, remember WAL had DC 10'S
      and Pan Am had the Airbus and those 2 a/c type are no
      longer in the DAL fleet. DAL would phase those out asap.

      The AWA CMH Hub would most likely be moved to CVG
      so you lose nothing and gain alot.
      PHX and LAS yes would give DAL a big west coast presence
      but isn't that what they want. PHX and LAS would be retimed
      to feed the PDX asia market. AWA justed announced a big
      beef up in their Northwest markets.

      AWA's PHX hangar would add alot to along with the little used
      DAL SLC hangar.

      DAL employees would probably not mind AWA being aquired,
      remember the PAN AM fiasco came at a time of the Gulf War
      and poor economic times. Times are good now as they were
      when DAL bought WAL which was unionized at the time and
      the merger seemed to go ok.

      Former CFO Tom Roeck was not much on the PAN AM
      buy out and was not to up on the proposed Contenintal

      Warren Jenson will most likely help in the merger/buyout
      of AWA or someone, It's obvious that DAL is headed in
      this direction.

      wingdoc, I agree AWA would bring DAL alot


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