Originally Posted by
DAL4EVER
Carl,
I'm implying ALL airlines are at risk of being piecemealed. DAL and NWA have breakup values of nearly $10 billion individually. If you don't think those are compelling numbers when the street values are a quarter of that than I don't know what to say. My point is that the merger may be in both our interests as the combined carrier with greater liquidity, leverage, market value, and resources may be able to better withstand a break up style environment. Look at Pan Am. Broken up. Only certain pilots went to UAL and DAL. None of us would benefit from this.
10 billion in break up value is a pipe-dream in my opinion. These assets require the burning of fuel at nearly $130 a barrel, thus funding for such an adventure would be extremely difficult to find in this zero credit environment.
I think this merger is very much in the interest of DAL. Adding Pacific routes and 3.5 billion in cash is absolutely critical for DAL, but not for NWA. We are smaller yet we have equal unrestricted cash. Since our burn rate is much lower than most, NWA will be able to outlast most airlines if the game turns into one of endurance. If DALPA really wishes for the Pacific routes and cash with the fewest pilots possible, this merger is definitely NOT in the interest of NWA pilots. With the new legislation preventing unfair SLI's, American might even be a better option for NWA pilots. A lot of this will depend on the ACTIONS of DALPA going forward - we've all had enough of talking.
I think the biggest hurdle to this merger is the current DAL stock price. Since this is a no cash/stock swap deal, the lower DAL's stock price, the lower the value for NWA shareholders' investment. This could rapidly get to the point where NWA shareholders vote NO on the merger. This would require DAL to add cash to the transaction, and they simply can't afford that right now.
I think this deal is in increasing danger. Just my opinion.
Carl