Airline Pilot Forums

Airline Pilot Forums was designed to be a community where working airline pilots can share ideas and information about the aviation field. In the forum you will find information about major and regional airline carriers, career training, interview and job seeker help, finance, and living the airline pilot lifestyle.




newKnow
11-07-2007, 09:27 PM
Delta To Sign Deal With Engine-Parts Supplier
November 7, 2007 Delta Air Lines is expected to announce a 10 year USD$1 billion contract with a major supplier of jet-engine parts that will help the airline broaden the types of aircraft engines it can maintain.
According to the Wall Street Journal, Chromalloy Gas Turbine will expand the ability of Delta's in-house maintenance unit to service two engine types, including one commonly used on Airbus planes -- a type of aircraft Delta does not fly or repair.
The deal is expected to be disclosed at an aviation industry conference in Milan, the newspaper said.
Delta, like many other US network carriers, is shifting capacity to lucrative international routes and away from the hard-fought domestic market.

(Reuters)


acl65pilot
11-08-2007, 03:52 AM
And who else flies Airbuses that DAL is interested in?
UAL and Jet Blue. Needless to say there is more to this.

tyrael37
11-08-2007, 04:26 AM
that is some crazy speculation in the sense that something might definitely happen. knowing when and who would definitely be the key. it's going to be an interesting 2008 especially with what happened to the stock market yesterday, the US dollar and the price of oil at just above $98 /barrel.


pilotss
11-08-2007, 04:33 AM
I believe if it would be UAL it would only be a piece of UAL and not the entire company. UAL and DAL would be too massive a merger. I am thinking that if the government would not let US and UAL then DAL would not be likely. NWA and DAL seems to be to big too. I would hate to think that some airline is going to get fed to the dogs for a merger.
DOJ source: http://www.washingtonpost.com/wp-dyn/business/specials/usair/index.html

Has there ever been a functioning airline bought out by a group of airlines?

Bucking Bar
11-08-2007, 06:01 AM
Pilot SS:

Pan Am was sold to American, United and Delta. When Delta pulled the plug, much of Pan Am's remaining South American routes were flown by American out of Miami. The Pacific was bought by United and Delta bought the north Atlantic.

Out of these transactions the best deal was American's which "took" by market competition in the south what Delta paid dearly to acquire across the North Atlantic. Some writers link Delta's bankruptcy to pressures that begain due to the expense of the Pan Am deal. The way they see it Delta's expense forced Ron Allen's destruction of the traditional Delta way of doing business, which lead to an inexperienced outsider with a banking background flying the airline into the dirt with some less than ethical henchmen. The story might be accurate, or only partly true. I don't know.

United is a good operation with good people. It has suffered from some of the worst management I've ever seen in operation and is typical of a business which has ceeded their job functions to McKinsey's consultants. There is some value in United's Pacific operations, but nothing that could not be duplicated on the cheap by buying 787's, or used 777's and just overflying hubs. The 5th freedom rights from NRT are worth something, but the value of 5th freedom rights will decline with the 787 doing to 747's and A340's what RJ's did to DC-9's and 727's. Smaller, point to point, abilities will allow the economic overflight of hubs.

There is also the question of Pan Asian competition with outfits like Cebu Pacific which pay less than SkyBus rates to Fillipinos who are eager to take a 1 in 2,500 chance at an ab initio pilot program.

greedyairlineexec
11-08-2007, 06:15 AM
My bet is the merger mania will start with LCC's first. Big LCC buying smaller ones and Legacy buying smaller LCC's. Once those mergers are completed and skybus and virgin are put out of business the "new" legacy's will merge among themselves.

whether it will be SWA buying Airtran, AA Alaska, DAL or UAL buying JB, NWA buying Frontier or Spirit or any combination in between is anyone guess.

the "legacy" carriers will not merger until the bigger LCC's have been absorbed and use to take out the new entrants. they will ink deals like the one between KLM-Airfrance with DAL and NWA, which is more than code share and has antitrust immunity but stops short of merging. Once they can "prove" to the government that the removal of the LCC's and the new alliances are not bad for the american public ( more expensive tickets) then they will be allow to merge.

My time line is 12months for setting up those alliances with antitrust immunity,18 months for the buyout of LCC's, 48 months for the legacy mergers, 72 months for us all to get really fat contracts.

Professor
11-08-2007, 06:16 AM
Bucking Bar,

Very well said. Especially the part about consultants.

chuck h
11-08-2007, 06:24 AM
The real question is if or when it happens will retirements and age 65 hold off long enough to keep anyone from being furloughed?

pilotss
11-08-2007, 06:27 AM
Man, I don't even want to think of a mass merger like that.

fbn0223
11-08-2007, 06:31 AM
I believe UAL and Jetblue A320's are powered by IAE 2500 engines. NWA A320/319s are powered by the CFM56, which is the addtional engine type that was referenced in the article.

Bucking Bar
11-08-2007, 06:52 AM
The real question is if or when it happens will retirements and age 65 hold off long enough to keep anyone from being furloughed?It is not that black and white an issue. Considerations include:

> Most legacies are in debt - even on older equipment. It is much harder to park an airplane when you have to make payments on it. Parking an encumbered jet almost requires using the bankruptcy tool. A merger amongst healthy carriers is unlikely since it would be hard to reduce capacity. With the same number of airplanes, the airlines need the same number of pilots.

> Delta's list is very young with few pilots over the age of 50. Age 65 isn't a factor at Delta for a decade. Many of the legacies have pilots who are older and who will retire regardless of the age 65 change. It could balance out. Unlike the situation at FedEx where there is a Flight Engineer seat to hang on to while waiting for the age 65 change to allow a bid back to the left seat. At most majors with 2 seat jets you can't come back after age 60.

> Maintaining physical fitness is an issue for all of us, if we want to work past 60. Most of us are going to be more effected by our own high fat / sugar diets than the mandatory retirement age based on pilot demographic studies and the degenerative conditions that are prevalent amongst those of us who make a living on the road. The pilots nearing age 60 now were less informed than our generation. Anyone remember when cigarettes and wiskey were practically considered health foods?

> The restructuring of employee benefits will make flying past 60 less important since retirement does not hinge on final average earning any more.

> The Boeing 787 & the A350. If airlines use it to increase frequency and replace larger jets the net result will be an increase in the number of pilots required to fly it.

My guess is that the bloodbath would be at the regional level as carriers might use a merger to reduce overlap in the branded 50 seat market. If those airplanes get parked it is much less of an issue since they usually are not on the mainline carriers' balance sheets.

Deez340
11-08-2007, 07:07 AM
I believe UAL and Jetblue A320's are powered by IAE 2500 engines. NWA A320/319s are powered by the CFM56, which is the addtional engine type that was referenced in the article.

I believe the IAE 2500s also power the MD90's which we fly so maybe there's nothing to all this. Man I hope.:D

Bucking Bar
11-08-2007, 07:24 AM
MD90's - mo betta' power - yummy. Lets get that rumor going again.

newKnow
11-08-2007, 07:31 AM
My bet is the merger mania will start with LCC's first. Big LCC buying smaller ones and Legacy buying smaller LCC's. Once those mergers are completed and skybus and virgin are put out of business the "new" legacy's will merge among themselves.

whether it will be SWA buying Airtran, AA Alaska, DAL or UAL buying JB, NWA buying Frontier or Spirit or any combination in between is anyone guess.

the "legacy" carriers will not merger until the bigger LCC's have been absorbed and use to take out the new entrants. they will ink deals like the one between KLM-Airfrance with DAL and NWA, which is more than code share and has antitrust immunity but stops short of merging. Once they can "prove" to the government that the removal of the LCC's and the new alliances are not bad for the american public ( more expensive tickets) then they will be allow to merge.

My time line is 12months for setting up those alliances with antitrust immunity,18 months for the buyout of LCC's, 48 months for the legacy mergers, 72 months for us all to get really fat contracts.

It's already begun. NWA has effectively bought Midwest Express with the backing of the same company that ownes Spirit. After that deal is announced, wouldn't you know it, Spirit pulls out of Detroit. Before this Air Tran is throwing money at Midwest Express and the "real" BOD there won't even take a look. Same for Delta when US Air was throwing cash at them. ("$10 Billion, "$11 Billion!, $12 Billion!!") Anytime someone won't even explore a deal with a group that is increasing its offer to you by a billion dollars at a time, expect that that group has a better deal on the table that you don't know about.

Puppet, dancing on a string....