Delta and Northwest talking

SUSAN CAREY & MELANIE TROTTMAN / WALL STREET JOURNAL

January 11, 2007

 

Northwest Airlines Corp. has been having recurring talks with Delta Air Lines Inc. about a potential link-up between the two, possibly after they both emerge from bankruptcy-court protection later this year, said people familiar with the matter.

 

Meetings between executives at various levels of management and between the airlines' advisers have been occurring regularly for weeks, including some in recent days. These sessions have helped Delta's creditors come to see a combination with Northwest as a realistic alternative to US Airways Group Inc.'s hostile takeover bid.

 

US Airways on Tuesday upped the ante by sweetening its hostile takeover bid for Delta to $10 billion. US Airways improved its mid-November $8.4 billion bid after Gordon Bethune, a former airline executive hired as an adviser by the Delta creditors, on Monday told US Airways its first offer wasn't good enough, said one person familiar with the matter.

 

Delta, which has insisted that it wants to step out of Chapter 11 as an independent airline, was trying to persuade its creditors that its standalone post-bankruptcy business plan is superior to US Airways' first offer. The Delta creditors, who met Tuesday, are taking the improved offer seriously and intend to pressure Delta to consider opening its books to US Airways and possibly other suitors, this person said.

 

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'Delta-Northwest' could hurt

Local hub likely would be dismantled, experts say

BY ALEXANDER COOLIDGE | [email protected]

January 12, 2007

 

ATLANTA - Whatever misgivings Greater Cincinnati and Northern Kentucky residents might have toward a potential US Airways takeover of Delta Air Lines, a merger with Northwest Airlines might pose even more dire implications for the local hub.

 

While US Airways says it would leave the hub intact, experts say Northwest probably wouldn't.

 

The Minneapolis-based airline was reported Wednesday as a suitor for Greater Cincinnati and Northern Kentucky's dominant airline. The revelation came the same day US Airways increased its hostile takeover bid to Delta's creditors by 20 percent.

 

Delta executives have spurned US Airways' more-than-$10 billion offer and insist that they are determined to emerge from bankruptcy as a stand-alone airline.

 

They have criticized a potential deal with the Tempe, Ariz.-based airline, saying it would lengthen its stay in bankruptcy and load it down with $24 billion in debt.

 

It also would fail to produce necessary savings and win regulatory approval, they say.

 

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I love it.  Delta says, "we want to be a stand alone carrier" while all along talking to NorthWorst behind everyones back.

 

Talk about being a hypocrite.  You can't burn the candle at both ends without repercussions.

 

If this goes thru, it only gives NorthWorst's mgmt (if they are the mgmt team) the opportunity to kill two airlines at once. 

 

My only hope is that the Delta shuttle survives, stays the Delta Shuttle and that a low cost carrier doesn't get it.

Northwest stays mum

Bankruptcy filing short on details of what firm will look like afterward

BY JOSHUA FREED | THE ASSOCIATED PRESS

January 13, 2007

 

MINNEAPOLIS - Northwest Airlines Corp. has filed a bankruptcy reorganization plan that is 66 pages long, but short on details about what the airline will look like once it finishes its layover in Chapter 11.

 

The plan filed on Friday was silent on the largest question surrounding Northwest right now:

 

Whether it will merge with another carrier.

 

Northwest has hired an advisory firm.

 

But it has not commented publicly on its plans.

 

Northwest will file more details of its reorganization by Feb. 15, according to the latest ruling by U.S. Bankruptcy Judge Allan Gropper.

 

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Northwest, Delta in 'detailed' merger talks: WSJ

Cincinnati Business Courier - 2:32 PM EST Tuesday

 

"Creditors of bankrupt Delta Airlines Inc. are growing anxious about US Airways Group Inc.'s bid to acquire the carrier, possibly boosting the likelihood of an eventual deal with Northwest Airlines instead, the Wall Street Journal reported Tuesday.

Sources told the paper that creditors are concerned that Atlanta-based Delta (Pink Sheets: DALRQ) would "not cooperate" with an antitrust review.

Meanwhile, Eagan, Minn.-based Northwest and Delta have been in "detailed" discussions about a potential merger, the Journal reported, citing sources close to talks. The paper said conversations have covered "potential structures, processes and timetables" of a deal. A merger is unlikely to occur before Northwest (Pink Sheets: NWACQ) and Delta emerge from bankruptcy. Both carriers are expect to exit Chapter 11 protection later this year.

Ongoing talks between the companies have not included a "framework for a deal" or "specific plans for further negotiations," the paper reports.

Delta operates its second-largest hub from the Cincinnati/Northern Kentucky International Airport."

 

This doesn't sound real good for the Cincy area and its airport if the 'experts' are right that a NW/Delta merger would be the worst case for Cincy.

 

Rage...who knows? Even the experts don't know, they're just trying to get some pub. I'd be very surprised if Cincy lost it's hub status. As long as CVG remains a fortress, it should stay strong.

 

One thing for sure....the NW/Delta merger would create a very ugly hub structure.....Atlanta, Detroit, Cincy, Minneapolis, JFK, Memphis, SLC. Just like USAir had too many East Coast hubs....this 'new' airline will have too many in the middle of the country.

^I never understood how USAir could have two hubs within the same state.

USAir not only had Pitt and Philly, they operated a major station out of BWI. I never understood USAir at all. In my humble opinion, it's the worst of the majors even after the merger. United makes some strong attempts at times to take that crown though.

^and Charlotte's not that far away either!  Didn't they have a lot of flights out of the smaller DC airport as well?

yeah but none of those smaller airports have an awesome people mover like CVG except Pittsburgh.

USAir not only had Pitt and Philly, they operated a major station out of BWI. I never understood USAir at all. In my humble opinion, it's the worst of the majors even after the merger. United makes some strong attempts at times to take that crown though.

 

And don't forget they have a significant presence at DCA and BOS.  IIRC, before PIT was picked for hub status, USAir was the second largest carrier at CLE, behind United.  When SWA and Continental moved in USAir slowly moved out.

Will the CVG hub stay?

UC prof tries to predict effect of merger

BY ALEXANDER COOLIDGE | [email protected]

January 30, 2007

 

CINCINNATI - A University of Cincinnati business professor likes the odds for Cincinnati/Northern Kentucky International Airport to survive a potential takeover or merger.

 

Jeffrey Camm, director of the Center for Productivity Improvement at UC, said in a new study that the Hebron airport will likely keep its hub status if its dominant carrier Delta Air Lines merges with either US Airways or Northwest Airlines.

 

He evaluated demand to various destinations served by hubs of all three airlines and modeled plans for eliminating all but four and all but three hubs when coupling Delta with other carriers.

 

The airport would survive either combination even if only four hubs survived the ensuing downsizing. CVG would lose its hub status in either merger if only three hubs were kept. "We cover a lot of ground from here - it's the same reason we have a number of trucking and logistics companies," he said Monday.

 

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