US Airways cancels Delta acquisition

[SmellyCat]

Do not fret, folks. A Bloomberg report quoted analysts as saying USAir's bid will prompt more bids for Delta and possibly set an industry trend for more consolidation (read: Continental or United upping the ante for Delta, then NWA up for grabs). Also, it's really not a slam dunk that the Justice Dept will approve it anyway, since post-merger Delta would have nearly 20% of domestic flights.

[monsoon]

That has not been my experience. I have seen $1000+ fares to get to Myrtle Beach and Atlanta on short notice. Maybe they have empty planes going to STL. Aren't they also competing with another carrier for that route?

[Neo]

That has not been my experience. I have seen $1000+ fares to get to Myrtle Beach and Atlanta on short notice. Maybe they have empty planes going to STL. Aren't they also competing with another carrier for that route?

That last quote I did was a trip to Philly this weekend so it isn't a STL only thing.

I'm not sure why you would want to fly to Myrtle Beach or Atlanta from here as you can drive to both in the time it takes you to be at the airport early and fly, land, wait for luggage, etc.

[lupitachica]

At my company the typical business flyer routinely goes CLT to NYC ( or other major cities like Chicago, LA, London, etc) - direct. Nobody wants to connect through ATL to make those trips. Typically (here) most everyone has a personal preference for US Air.

(The possibility of) Charlotte losing direct flights to major business areas across the country would be disastrous in my opinion for the routine business traveler and the companies that chose or would choose Charlotte based on the ease of getting to & from this city. While the air time distance btwn Charlotte and Atlanta may be small, the actual time it takes to make connections extends your travel time by hours. Ie if you're scheduled to take off from LGA at 4:45 and arrive in Charlotte by 6:30 you may be home by 7:30 if all goes well. Making a connection in Atlanta would add another 2 hours to your trip (and that's not factoring in delays). Just the logistics of unboarding, getting to your gate, wating for your connection, boarding, flying and then unboarding eats up time (not to mention energy & patience). For the frequent flyer that's a miserable option.

Typically I can get roundtrip US Air flights to NY for anywhere from $215 - $270 and that's booking about week in advance. Last minute trips (meaning booking today for tomorrow) run anywhere from $370 - $500. Right now I can get a fare of $268 for a RT US Air flight to Philly tomorrow morning returning on Friday.

[cltheel.sdl]

Where does NWA have its hubs? I know there is one in Minneapolis, right?

[atlrvr]

Detroit, Minneapolis, and a smaller hub in Memphis.....

[cltheel.sdl]

Wow, acquiring NWA really would be a perfect fit for US Airways.

Hopefully this Delta mess is just fluff.

[atlrvr]

Also, to my understanding, it's much easier to reject leases while in bancrupcy, but Delta wouldn't necessarily want to reject leases at Atlanta or New York, and USAirways would be bound (at least financially) to Charlotte and Philly.

If USAirways went after NWA, it would be much easier for NWA to reject leases at Memphis and either Detoit or Minneapolis, which would be the most likely hubs to suffer in that merger scenario.

[monsoon]

Cnn is reporting this as a hostile take over by USAir so I expect that USAir is very serious about this bid.

They report the following are hubs of the two airlines. New York, Philadelphia, Cincinnati, Charlotte, Atlanta, Las Vegas, Phoenix, and Salt Lake city. The commentator said they are not likely to have 8 hubs once this is complete, if it happens.

From the map the presented, Charlotte and Atlanta seem to be the closest hubs to each other.

[atlrvr]

Well PHL and JFK are much closer physically, but serve a combined 28M people, where as there are about half that located in the Charlotte and Atlanta metros and points in between.

[monsoon]

Well PHL and JFK are much closer physically, but serve a combined 28M people, where as there are about half that located in the Charlotte and Atlanta metros and points in between.

[atlrvr]

Well, I was thinking more like Hickory, some of Winston, Columbia, etc would travel to Charlotte for a direct flight.

[monsoon]

Well, I was thinking more like Hickory, some of Winston, Columbia, etc would travel to Charlotte for a direct flight.

[Miesian Corners]

Just talked with a friend at NWA HQ. They are all very nervous now. This is in no way a done deal. Look for CO to make a competing bid in the next week.

[monsoon]

Just talked with a friend at NWA HQ. They are all very nervous now. This is in no way a done deal. Look for CO to make a competing bid in the next week.

[peaceloveunderstanding]

NWA is worried about being the real, or next, target. They aren't looking to acquire, they are under bankruptcy-court protection as well.

[suburban george3]

I know from other postings on this forum that Winston-Salem/Greensboro are looking for a low cost carrier to come there, but those people can also drive to RDU as its about the same distance time wise.

[ryancs]

I heard an interesting fact on NPR's Market Place radio show tonight. There are problems with a merger between Delta and US Air. Namely, they use different jets. Delta uses Boeing and US Air uses Air Bus. From a business perspective the synergies that would be obtained by a merger won't be achieved through cost savings due to having to support two different airplanes...they will have to keep crews for both.

So, for those worried about cut backs in Charlotte I wouldn't fret too much. The routes going through Charlotte now will have to be maintained by experienced AirBus mechanics and Boeing will need to be maintenanced through existing facilities in Atlanta or elsewhere.

Overall, this wouldn't be a good merger but would get the creditors some money back out of bankruptcy. I'd say the creditors could give a hoot and will jump at it, but we will see...

[atlrvr]

I've also heard that Boeing is one of Delta's major creditor's. Considering USAirways and Boeing's tumultuous relationship, I'm not sure that Boeing will be interested in making things too appealing for USAirways.

[tombarnes]

Whay does anyone honestly think that the Justice Department is going to approve this merger? I don't see this as something that will really happen. I tend to think that it may well be a bid designed to shake up the industry, perhaps sparking other takeover bids, but I doubt that this will receive final approval for the same reasons that the United-USAirways merger was not allowed to proceed. This would be horrible for consumers on many levels.

[Minneapolitan]

Just talked with a friend at NWA HQ. They are all very nervous now. This is in no way a done deal. Look for CO to make a competing bid in the next week.

[monsoon]

I heard an interesting fact on NPR's Market Place radio show tonight. There are problems with a merger between Delta and US Air. Namely, they use different jets. Delta uses Boeing and US Air uses Air Bus. From a business perspective the synergies that would be obtained by a merger won't be achieved through cost savings due to having to support two different airplanes...they will have to keep crews for both.....

[uptownliving]

Also to add to that, USAir is looking to replace their 737 fleet in the next few years, so its quite possible they could select an aircraft that would share commonality with Delta's 737s. They have indicated that in today's conference calls that they are in negotitation with Boeing about those new planes. This is something that USAirways is doing regardless of the Delta merger.

[Ryepow]

The combined fleet would most likely involve keeping all the airbus A319/20/21/30. I could see them getting rid of some of US Airways oldest 757's all it's 767-200's and 737-300/400's also. Delta would keep everything except the MD-80's. In the end it would look like:

E-190

A319

A320

A321

737-800

757

767-300/400

777

A330

787 in future.

[SmellyCat]

From what I've heard there is more anticipation than nervousness at NWA. They will be wanting to pick up several gates on the east coast due to the fact that a merger between Delta and US Air would mean that the new operation would have to reduce flying capacity by 10 percent. The reduction is expected to address regulators' antitrust concerns. This merger is sounding very likely and more will happen.