DAL/NWA merger not looking good
02-26-2008, 05:53 PM
#1
Line Holder
Thread Starter
Joined APC: Sep 2007
Position: Regional left seater
Posts: 60
DAL/NWA merger not looking good
http://nc.startribune.com/blogs/breakingnews/?cat=8
Nobody's about to give up seniority. This deal will NEVER happen....
Nobody's about to give up seniority. This deal will NEVER happen....
02-29-2008, 11:58 AM
#4
Gets Weekends Off
Joined APC: Feb 2008
Posts: 19,273
The top brass have coughed up a lot of cash already. The new contract is very good considering the times. The seniority issue will kill the merger hopefully and the new contract will never be put in place. The new contract was a huge gain for NW pilots and a nice increase for DAL Pilots.
02-29-2008, 12:36 PM
#5
Gets Weekends Off
Joined APC: Oct 2005
Position: B747FO
Posts: 148
Here is the latest from FT:
Delta/Northwest merger put on two weeks ‘life support’; chances of failure increasingly high - sources
By Mike Stone and Claudia Montoto in New York
Published: February 29 2008 15:31 | Last updated: February 29 2008 15:31
This article is provided to FT.com readers by dealReporter—a news service focused on providing insightful intelligence on event driven situations to investors. www.dealreporter.com
--------------------------------------------------------------------------------------------------------
An impasse on the issue of pilot seniority integration is unlikely to be overcome, and could be a death blow for a Delta and Northwest deal despite continued negotiations, a source close to the situation told dealReporter.
“There is a very good chance nothing happens here,” the source said in reference to the talks between Delta and Northwest pilot groups. “I think [the deal] would need a Hail Mary now to have something happen.”
Although it is understood there is no official “drop-dead” date for the transaction, the parties are understood to have wanted a deal announced by this time, mainly to ensure that the transaction would be reviewed under the current presidential administration.
Moreover, it was said that if no announcement is made in the next two weeks, the deal should be assumed dead.
February was considered the cornerstone month to announce a deal, the source said. However, he conceded that although March is “a little late”, it would still be possible to slip its review within the current administration’s timeline. An April or May announcement would be hard to fit within the window, he added.
According to 27 February market reports, Delta CEO Richard Anderson and President Ed Bain said in a company memo that Delta would abide by established, unmet merger goals. The reports stated that those goals had not yet been met despite agreements in principal with Northwest.
Integration of the pilot seniority lists continues to be the pivotal point to the merger, the reports said, adding that the memo from Anderson stated that protecting Delta employee seniority is one of the mainline carrier’s chief goals; retaining Delta’s Atlanta headquarters is also a major goal. The reports additionally said that retaining a strong ”stand-alone” alternative was also essential to Delta.
It was reported that all other aspects of the Delta/Northwest tie-up had been ironed out.
The source said the business people involved in the situation have no control over the failure or success of the deal at this stage. “It’s all in the hands of the pilots who have totally different incentives than anyone else,” he said.
It was said that Northwest pilots had more of an incentive than Delta pilots to merge, primarily because they would see a significant pay raise and would have access to larger aircrafts. Delta pilots, however, have not agreed to demands being made by Northwest pilots, although it was unclear what demands were at issue, it was said.
Still, the source close argued that because Delta has a very young pilot group with seniority, a combination of the mainline carrier with any other carrier would prove difficult, though not impossible.
Meanwhile, it was said that any additional airline merger conversations have likely been halted until the Northwest/Delta deal outcome is known. If Northwest does not merge with Delta, Continental – the most talked about follow-up merger candidate – would not be freed of its attachment to Northwest via the golden share, and therefore ineligible to merge with United Airlines or any other suitor.
This news service previously reported that Northwest owns a voting series of Continental’s preferred stock, namely the Series B preferred stock, which extends until 2025 and allows Northwest to use its golden share to block a suitor from acquiring Continental. Additionally it was reported that upon an announcement of a Delta and Northwest deal Northwest’s golden share in Continental would be redeemable for USD 100 by Continental which would free Continental to merge with any other available player.
However, it was offered that other scenarios aside from a Continental/United tie-up were being considered as follow-up deals to a Delta/Northwest combination, and these other constituents would be affected by Delta/Northwest pilot impasse. The additional deals considered, however, were not disclosed.
If Delta and Northwest do not combine, the source said the probability of the other talked about deals happening would be much lower.
Delta/Northwest merger put on two weeks ‘life support’; chances of failure increasingly high - sources
By Mike Stone and Claudia Montoto in New York
Published: February 29 2008 15:31 | Last updated: February 29 2008 15:31
This article is provided to FT.com readers by dealReporter—a news service focused on providing insightful intelligence on event driven situations to investors. www.dealreporter.com
--------------------------------------------------------------------------------------------------------
An impasse on the issue of pilot seniority integration is unlikely to be overcome, and could be a death blow for a Delta and Northwest deal despite continued negotiations, a source close to the situation told dealReporter.
“There is a very good chance nothing happens here,” the source said in reference to the talks between Delta and Northwest pilot groups. “I think [the deal] would need a Hail Mary now to have something happen.”
Although it is understood there is no official “drop-dead” date for the transaction, the parties are understood to have wanted a deal announced by this time, mainly to ensure that the transaction would be reviewed under the current presidential administration.
Moreover, it was said that if no announcement is made in the next two weeks, the deal should be assumed dead.
February was considered the cornerstone month to announce a deal, the source said. However, he conceded that although March is “a little late”, it would still be possible to slip its review within the current administration’s timeline. An April or May announcement would be hard to fit within the window, he added.
According to 27 February market reports, Delta CEO Richard Anderson and President Ed Bain said in a company memo that Delta would abide by established, unmet merger goals. The reports stated that those goals had not yet been met despite agreements in principal with Northwest.
Integration of the pilot seniority lists continues to be the pivotal point to the merger, the reports said, adding that the memo from Anderson stated that protecting Delta employee seniority is one of the mainline carrier’s chief goals; retaining Delta’s Atlanta headquarters is also a major goal. The reports additionally said that retaining a strong ”stand-alone” alternative was also essential to Delta.
It was reported that all other aspects of the Delta/Northwest tie-up had been ironed out.
The source said the business people involved in the situation have no control over the failure or success of the deal at this stage. “It’s all in the hands of the pilots who have totally different incentives than anyone else,” he said.
It was said that Northwest pilots had more of an incentive than Delta pilots to merge, primarily because they would see a significant pay raise and would have access to larger aircrafts. Delta pilots, however, have not agreed to demands being made by Northwest pilots, although it was unclear what demands were at issue, it was said.
Still, the source close argued that because Delta has a very young pilot group with seniority, a combination of the mainline carrier with any other carrier would prove difficult, though not impossible.
Meanwhile, it was said that any additional airline merger conversations have likely been halted until the Northwest/Delta deal outcome is known. If Northwest does not merge with Delta, Continental – the most talked about follow-up merger candidate – would not be freed of its attachment to Northwest via the golden share, and therefore ineligible to merge with United Airlines or any other suitor.
This news service previously reported that Northwest owns a voting series of Continental’s preferred stock, namely the Series B preferred stock, which extends until 2025 and allows Northwest to use its golden share to block a suitor from acquiring Continental. Additionally it was reported that upon an announcement of a Delta and Northwest deal Northwest’s golden share in Continental would be redeemable for USD 100 by Continental which would free Continental to merge with any other available player.
However, it was offered that other scenarios aside from a Continental/United tie-up were being considered as follow-up deals to a Delta/Northwest combination, and these other constituents would be affected by Delta/Northwest pilot impasse. The additional deals considered, however, were not disclosed.
If Delta and Northwest do not combine, the source said the probability of the other talked about deals happening would be much lower.
Thread
Thread Starter
Forum
Replies
Last Post
