Delta wants no part of USairways

[Kristie]

Proposal for 'new' Delta put on table
Updated 12/1/2006 9:24 AM ET
Dawn Gilbertson, The Arizona Republic

PHOENIX — It was showtime for US Airways executives in New York on Thursday as they made their first face-to-face pitch to acquire defiant Delta Air Lines, but it's unclear whether they bombed or won fans because the reviews aren't in yet.
The Tempe airline and Delta would not discuss the closed-door meeting beyond brief statements reiterating earlier comments.

Attorneys representing Delta creditors, who hold the key cards in the deal given Delta's bankruptcy, did not return calls seeking comment. They have yet to publicly weigh in on US Airways' surprise $8 billion-plus offer for Delta.

Delta wants nothing to do with it, preferring to line up its own financing and emerge from bankruptcy as an independent airline. What's next is anyone's guess.

US Airways executives remained in New York after the meeting, presumably for more meetings. Whether they are related to the merger is unclear.

An executive for the airline said earlier this week that its goal at Thursday's meeting was to get Delta to open its books, a precursor to any formal merger agreement.

In a statement Thursday, US Airways CEO Doug Parker gave no hint of the outcome of the meeting.

"We reviewed our offer and had a chance to engage in discussions on the many facets of this proposal," he said. "While we recognize the steps that Delta management has taken, we are confident that our proposal for a 'new' Delta will create more value than a (Delta) stand-alone plan."

Delta's statement suggested, again, that the airline is only reviewing US Airways' offer because it has to.

"While we will fulfill this obligation, we will, as we have stated, continue to progress toward filing our stand-alone plan by the end of the year, which would have us emerge from bankruptcy as a highly competitive, independent and financially sound airline by mid-2007," it said. "Our plan is working, and we have tremendous, hard-won confidence in it."

Industry consolidation

All eyes are on the proposed merger, announced two weeks ago, because a combined US Airways-Delta would create the nation's largest airline.

US Airways' surprise takeover offer has also spurred talk of competing bids for Delta and bids for Northwest, which filed for bankruptcy the same day as Delta last year.

The outcome could dramatically change the industry landscape and will determine whether US Airways headquarters remains in Arizona.

Industry consultant Bob Mann didn't expect to hear much after the meeting and doesn't expect a quick resolution to the deal on the table.

"It's the opening blast of what will be a lengthy public flogging of the two plans," he said, referring to US Airways' offer and Delta's own reorganization plan. "The creditors are going to do a professional job of just looking at everything at a slow and steady pace. There's no rush."

Delta has the exclusive right to file a reorganization plan in its bankruptcy case through at least Feb. 15.

Losses abating

Separately Thursday, Delta filed its monthly financial report with the U.S. Bankruptcy Court. The airline reported a net loss of $88 million in October, down from a $301 million loss in October 2005.

It reported a double-digit gain in a key industry revenue measure, revenue per available seat mile. The airline has been shifting its attention to international flights, where competition is less cutthroat and fares are generally higher.

this is the latest news and as far as i know, a merger isn't going to work unless it's completely against delta execs and i can't see BK judges and/or creditors working without them. but, that's just me...

i have a feeling now that DAL finally has some decent marketing folks (they seem to be doing a good job of pulling DAL out from it's marketing madness) that DAL might actually do really good once they come out of BK. I'm even considering a stock investment when they first come out just because it seems to me that initiation of the initial stock investment is only going to go up for a while....heck, wish i would have purchased some a few days ago cuz DAL stock is up around $2 now...I figure it'll keep going up till just around BK and then doug says they'll inactivate the DALPRK stock and bring out new DAL (out of BK) stock...

now sure how that all works cuz it's all new to me but with what DAL is proposing/doing, it seems like a good direction to go.