The Super-Rad Airports/Airlines Thread

[delts145]

Delta Air Lines rejects US Airways' bid, files Chapter 11 reorganization plan
The Associated Press
By Harry R. Weber
Article Last Updated: 12/19/2006 06:35:58 AM MST


Posted: 6:16 AM- ATLANTA - Delta Air Lines Inc. filed a reorganization plan Tuesday that calls for it to emerge from Chapter 11 bankruptcy protection next spring as a standalone company. It also said that its board has formally rejected US Airways' $8.4 billion hostile bid to buy Delta and create the nation's largest airline.
The Atlanta-based carrier outlined a five-year business plan, and said that its advisers have determined that a reorganized Delta will have a consolidated equity value of roughly $9.4 billion to $12 billion. It said the plan would result in a recovery by Delta's unsecured creditors of roughly 63 percent to 80 percent of their allowed claims.
Delta's existing stock would be wiped out under the plan and creditors generally will receive distributions of new Delta common stock to settle their claims.
Delta also said Tuesday that its board has unanimously rejected US Airways' unsolicited offer, which was first disclosed Nov. 15. It had repeatedly indicated it wasn't interested in the offer.
"The board concluded that Delta's standalone plan will provide the company's creditors with superior value and greater certainty on a much faster timetable than the US Airways proposal," Delta said in a statement.
There was no immediate comment by Tempe, Ariz.-based US Airways, but an official with knowledge of that company's plans who spoke on condition of anonymity because of the sensitivity of the talks said Monday that US Airways was willing to increase its offer for Delta if Delta could justify it is worth more.
But Delta said Tuesday that as far as it is concerned it believes flying solo is the best proposal for everyone involved.
Delta said it believes the US Airways deal is not likely to gain regulatory approval. It also cited as obstacles: overwhelming labor issues and "flawed economic assumptions."
Ultimately, it will be the unsecured creditors committee in the bankruptcy case that will play the decisive role. The committee has not said whether it will support Delta's plan, US Airways' plan or any other offer to buy Delta that may come in.
Delta said US Airways continues to experience significant integration problems and has not completed its prior, smaller merger with America West. It believes US Airways is not equipped to simultaneously integrate a substantially larger company like Delta.
Delta said its business plan projects, among other things, a 50 percent reduction in net long-term debt and a return to profitability in 2007 and an increase in net income, after profit-sharing, from roughly $500 million next year to roughly $1.2 billion in 2010.
Delta filed for Chapter 11 in New York in September 2005.
Delta said its reorganization plan calls for rolling its bankruptcy financing of $2.1 billion into a new package that would go into effect when it emerges from Chapter 11, and it said it has received several proposals with competitive terms to help it do that.
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[delts145]

American, Northwest merger talks possible?
McClatchy News Service

Article Last Updated: 12/18/2006 11:35:56 PM MST


MINNEAPOLIS - Merger talks between Northwest Airlines and American Airlines collapsed in 2000. Will they be forced to reconsider a partnership in 2007?
Some industry watchers believe it's possible.
Bob McAdoo, an airline analyst for Prudential Equity Group, said he thinks both American and Continental Airlines are reluctant to embrace mergers. But he argues they may have to pair up with others if the Department of Justice approves US Airways' proposed acquisition of Delta Air Lines.
The ''most likely partner for American, in our view, is Northwest, bringing Asia and cementing control of the upper Midwest for American,'' McAdoo wrote in a research note.
Darryl Jenkins, a Virginia-based aviation consultant, sees similar logic at work. ''I think somebody will be sniffing around at Northwest very soon,'' he said. American is the most likely partner, because their route networks would complement each other and because Continental, another possible partner for Northwest, already is being eyed by United Airlines, Jenkins added.
In recent history, airline workers at the lower-paid carrier in a merger have been brought up to the higher-wage contracts to build support for a deal.
But American's compensation levels are above Northwest's, so a merger likely would mean elevating pay rates at Northwest. That would wipe away a significant portion of the labor savings that Northwest achieved from its workers only this year after three years of effort.

[nbrindley]

I think that Northwest would be a much better target for US Air than Delta. It would give US Air a substantial international network with much less overlap between the current routes.

[delts145]

Delta plan calls for flying solo

Chapter 11 plan filed, U.S. Airways bid nixed

By Harry R. Weber
Associated Press
ATLANTA — Delta Air Lines filed a reorganization plan Tuesday that calls for it to emerge from bankruptcy next spring as a stand-alone company worth as much as $12 billion, or slightly more than the combined market value of the nation's two biggest carriers.
The Atlanta-based company also said that its board has formally rejected US Airways' $8.5 billion hostile takeover bid, and its executives joined rank-and-file employees on a full-scale public relations assault against the merger proposal.
"US Airways is the worst of all potential merger partners," Delta Chief Executive Gerald Grinstein said during a conference call with analysts.
Grinstein didn't completely dismiss the idea of a merger with a company other than US Airways, saying later Tuesday that Delta would review any other bids. But he said Delta would not put out a "for sale" sign.
Delta's chief financial officer, Ed Bastian, said in a conference call with reporters Tuesday that Delta so far has not received any other offers.
Delta outlined a five-year business plan. Its advisers estimated that a reorganized Delta will have a consolidated equity value of $9.4 billion to $12 billion and that Delta's unsecured creditors would recover roughly 63 percent to 80 percent of their allowed claims.
The high end of the equity value Delta is projecting would be more than the $11.9 billion in combined market value of AMR Corp.'s American Airlines and UAL Corp.'s United Airlines.
Delta's existing stock would be wiped out under the plan and creditors generally would receive distributions of new Delta common stock to settle their claims. Delta so far has not decided whether to give creditors any cash.
US Airways' offer included $4 billion in cash and 78.5 million shares of US Airways stock.
Tempe, Ariz.-based US Airways Group Inc. issued a statement saying it remains committed to its merger proposal, and it added it believes its proposal, including $1.65 billion in anticipated cost savings, provides more value than Delta's plan.
"We remain a disciplined and determined bidder for Delta," US Airways Chief Executive Doug Parker said.
An official with knowledge of US Airways' plans, who spoke on condition of anonymity because of the sensitivity of the talks, said Monday that US Airways was willing to increase its offer if Delta could justify it is worth more. But Delta said Tuesday it believes flying solo is the best proposal for everyone involved.
Creditors must now vote on whether to approve Delta's reorganization plan or any competing plan that may be filed with the court. The plan also must be approved by the court.
Typically, in each class of creditors Delta's plan would have to be approved by holders of two-thirds of the claims and a majority of the number of individual creditors, said New York bankruptcy lawyer William Rochelle. If a class is not impaired — that is, if they are guaranteed of getting all of their money back no matter what — they generally don't get to vote, Rochelle said.
If one or more classes of creditors do not approve the plan, Delta could still confirm the plan through a so-called cramdown, a maneuver in which it must show the court that the dissenting class will receive more under the plan than it would under a Chapter 7 liquidation, Rochelle said. The company also would have to show that any subordinate class, such as shareholders, would get nothing in the way of recovery under the reorganization plan, Rochelle said.
Delta already has met that second test because its plan calls for current shares of the company to be wiped out.
If a competing plan were filed, creditors would vote on each individually. There have been bankruptcy cases where two competing reorganization plans were approved by creditors; in such a case, a judge decides which plan is confirmed after holding a hearing to determine which plan is in the "better interest" of the creditors.
"Bankruptcy is like anything else," Rochelle said. "Money talks at the end of the day."
Ultimately, the unsecured creditors committee in the bankruptcy case will play a key role in determining Delta's fate. The committee has not said whether it will support Delta's plan, US Airways' plan or any other offer to buy Delta that may come in. A lawyer for the committee, Daniel Golden, did not immediately return a call Tuesday seeking comment. Rochelle said Delta would likely wait to hear from the creditors committee about its views before soliciting votes on its plan.
Delta also said Tuesday that its board has unanimously rejected US Airways' unsolicited offer, disclosed Nov. 15. Delta employees held rallies at airports serving several cities, including Cincinnati, Boston and Columbia, S.C., protesting US Airways' bid; Delta executives attended a similar rally in Atlanta.
After falling for most of the day, US Airways shares bounced back and rose $1.70, or 3.1 percent, to close at $57.50 Tuesday on the New York Stock Exchange, putting the value of its bid for Delta at $8.5 billion.
Delta said it believes the US Airways deal is not likely to gain regulatory approval. It also cited as obstacles: overwhelming labor issues and "flawed economic assumptions."
Bastian said Delta showed its reorganization plan to its creditors committee last week. He would not say how creditors specifically reacted, but he said he believes the committee will ultimately support Delta's plan.
Delta said US Airways continues to experience significant integration problems with its prior, smaller deal with America West. It believes US Airways is not equipped to simultaneously integrate a substantially larger company like Delta.
Bastian also said that the government's pension insurer is expected to give the final go-ahead Wednesday to Delta terminating its pilots' pension plan. The termination would be effective Sept. 2 and would mean the Pension Benefit Guaranty Corp. would take over the pilot pension plan and pay retired pilots a benefit up to a certain limit.
Delta said its business plan projects, among other things, a 50 percent reduction in net long-term debt and a return to profitability in 2007 and an increase in net income, after profit-sharing, from roughly $500 million next year to roughly $1.2 billion in 2010.
Delta filed for Chapter 11 in New York in September 2005.
Delta said its reorganization plan calls for rolling its bankruptcy financing of $2.1 billion into a new package that would go into effect when it emerges from Chapter 11, and it said it has received several proposals with competitive terms to help it do that.
There has been no decision about who will lead Delta once it emerges from bankruptcy, Bastian said. Delta's current chief, Grinstein, has said he plans to leave Delta around the time it exits bankruptcy.

related headline,

Delta workers warn of fallout from a merger

By Dave Anderton
Deseret Morning News
A hostile takeover of Delta Air Lines by US Airways would be devastating to the 6,000 Delta jobs based in Utah and to the state's economy, and would lead to higher airfares, Delta Air Lines employees said Tuesday.


Mike Terry, for the Deseret Morning News
Delta pilot Chris McDonald holds son Owen during Tuesday's rally. The McDonalds are Utah residents.

Dozens of Delta employees and local politicians rallied at Salt Lake City International Airport denouncing US Airways' bid to acquire the airline. Similar rallies were held in eight other cities across the country. Also on Tuesday, Delta Air Lines' board formally rejected the $8.3 billion offer.
But Delta officials believe a second US Airways bid likely will be made and warned against the fallout.
Stephen Sandstrom, a former US Airways pilot and a newly elected member of the Utah House of Representatives, said a US Airways takeover of Delta would mean Salt Lake City would lose its hub status.
"The hub is everything to an airline," Sandstrom said after the rally. "You would see frequency of flights go down and you would see prices go up."
Sandstrom added that since the US Airways and America West merger, pilot seniority lists and route lists between the two airlines have been in "total chaos."
"They have a whole bunch of pilots on furlough," Sandstrom said. "The people that lose in a hostile takeover like this are the employees and will be the employees of Delta Air Lines."
Salt Lake City is Delta Air Line's third-largest hub in terms of departures when including code share partners. Salt Lake City is the second-largest hub when counting Delta-branded aircraft, according to John Laughter, vice president of maintenance for Delta.
Marc Carlile, a Delta pilot who lives in South Jordan, said after the rally that US Airways is not offering an increase in service. In addition, he said, Delta's domestic route system is nearly identical to US Airways'.


Mike Terry, for the Deseret Morning News At the Salt Lake Airport,
Delta employees and others sign a petition opposing US Airways' bid to merge with Delta.

"US Air is simply trying to get ahold of Delta because Delta has done very well in bankruptcy restructuring," Carlile said. "They are just trying to get something they don't have, cheaply. They see us coming out of bankruptcy in the next few months as a much stronger airline than themselves, and I think they are concerned about that."
With US Airways already operating a hub in Phoenix and Las Vegas, Carlile said, a hostile takeover would possibly end hub service out of Salt Lake City.
"The many destinations that we enjoy now with nonstop service would be gone," Carlile said. "We're finally starting to see Delta turn the corner and do better. It's almost like having the rug yanked out from under you because we've sacrificed so much as pilots, as flight attendants, as mechanics, as agents. None of us have any interest in this hostile takeover."
Still, US Airways said Tuesday it remained a "disciplined and determined bidder for Delta."
Doug Parker, US Airways' chairman and chief executive, said in a prepared statement that the combining of US Airways and Delta would create "$1.65 billion in annual synergies beyond the value that could be created by any stand-alone plan."
"These synergies come on top of the certainty of $4.0 billion in cash and the upside potential of 78.5 million shares of US Airways stock," Parker said. "These shared synergies will benefit all shareholders in the 'new' Delta. Factoring the synergy benefits into our offer, the current value of our proposal is significantly greater than the value of Delta's stand-alone plan."
US Airways has filed for bankruptcy twice. In 2005, it was acquired by America West.

[delts145]

Committee supports stand-alone plan but will weigh alternatives

By Harry R. Weber and Vinnee Tong
Associated Press
ATLANTA — The unsecured creditors committee in Delta Air Lines' bankruptcy case, which holds a key role in deciding the carrier's fate, said Wednesday it supports Delta's decision to file its stand-alone reorganization plan, but that it also will weigh alternatives.
Also on Wednesday, the government's pension insurer gave its final approval Wednesday for a plan to terminate the pensions of Delta Air Lines pilots, a key step for the carrier to resolve a multibillion-dollar issue in its bankruptcy case.
The creditors committee had been largely silent since US Airways' unsolicited $8.4 billion bid for Delta that was disclosed on Nov. 15.
"A number of issues, including those left open in the plan of reorganization, will be the focus of continuing discussions between the committee and Delta over the coming weeks," the committee said in a statement. "At the same time, the committee will continue to consider potential alternatives in order to maximize the ultimate recoveries for the unsecured creditors in the Delta bankruptcy."
The committee did not elaborate on its views, and a lawyer for the committee, Daniel Golden, did not return repeated calls and e-mails seeking comment.
Delta says in its plan that after bankruptcy it will be worth as much as $12 billion. Its unwelcome suitor, US Airways, says Delta's value is what it is offering to buy it for. Creditors must decide which proposal makes the most sense.
Analysts differed Wednesday on whether Delta's valuation, which it announced in its reorganization plan a day earlier, is realistic in light of high fuel prices, the slowing economy and the airline industry's history in recent years of bad financial news.
Some believe it's likely US Airways will raise its offer, while other analysts aren't sure it's necessary right now. One thing most agree on: Delta has made clear its desire to remain independent.
Approval of the pilot pension plan means the Pension Benefit Guaranty Corp. would take over the pensions and pay pilots a portion of the benefits they had expected to receive from the company.
In return, the plan gives the pension agency an unsecured claim of $2.2 billion against the nation's third biggest carrier. Holders of unsecured claims usually receive a fraction of their total claim.
"This may be the single most important settlement in the entire case," said Marshall Huebner, attorney for Delta Air Lines Inc. The PBGC estimated the pilot pensions were underfunded by about $3 billion, according to a court filing.
U.S. Bankruptcy Judge Adlai Hardin also approved the final settlement. He said it was "a vital stepping stone" on the path to a successful reorganization.
The plan had one objector, a retired pilot, but received support from the major stakeholders in the case, including the creditors committee, a group of retired pilots and the union that represents working pilots. Hardin said those parties saw that "it is not only a good settlement, it is an absolutely essential settlement for the company to move forward and for the benefit of the pilots."
The Atlanta-based airline has said it needs to end the pilot pension plan in order to successfully restructure and emerge from bankruptcy court protection as a stand-alone company in the spring of next year
The pension termination plan also calls for the PBGC to get $225 million in senior unsecured notes, which could be convertible to cash once the airline exits bankruptcy.
The agreement between Delta and the pension agency is effective retroactive to Sept. 2 and affects about 13,000 current and former pilots and their beneficiaries.

Related Story:

Hearings on a US Airways takeover sought by 3 on Salt Lake County Council

By Jenifer K. Nii
Deseret Morning News
A day after Delta Air Lines rolled out its plan to re-emerge from bankruptcy — solo, thank you very much, rival/suitor US Airways — three members of the Salt Lake County Council announced plans to request public hearings into what effect US Airways' proposed hostile takeover might have on the county.
Randy Horiuchi, Jenny Wilson and Joe Hatch said Wednesday they will ask the council to schedule public hearings on the matter so that the county's "voice is heard, and that all the facts are presented."
"We are the custodians, if you will, of a lot of the state's tourist industry," Horiuchi said. "The Salt Palace is under our jurisdiction. We manage it. Delta is such an important cog and piece of our strategy to go out and get conventions to come to the Salt Palace, so (a Delta/US Airways deal) has enormous ramifications. One of our biggest selling points has been the convenience of Salt Lake and having a Delta hub here."
Delta filed its reorganization plan Tuesday, calling for it to emerge from bankruptcy next spring as a stand-alone company, formally rejecting a $8.5 billion takeover bid from US Airways. US Airways responded shortly thereafter, saying it is still in the hunt as "a disciplined and determined bidder."
Jeff Allen, who will take his seat on the Salt Lake County Council in January, said he likes that the group is asking questions. But he has some of his own.
"It is an interesting idea, and I'm all in favor of talking about what options are available to us, and what we can do" to protect jobs and the county, Allen said. "I'm not yet certain what jurisdictional powers we have, or how we can affect a deal like that."
Horiuchi said he has already begun looking into those issues.
"We're investigating what our material opportunities would be to affect this business buyout," he said.
The council may not be able to intervene or prevent a takeover, but Horiuchi said it may look into how it may affect certain things put in place in years past to advantage or lure Delta — fly-over tax rulings passed seven years ago, for example. And he's looking into whether the council has subpoena power to compel US Airways officials and others to participate in the hearings.
The trio's efforts are still preliminary, Horiuchi emphasized. They're still learning about what a potential takeover would look like, he said, and the process involved. But after Tuesday's anti-merger rally at Salt Lake City International Airport and the Salt Lake City Council's letter sent earlier this month supporting Delta, Horiuchi said they thought it was time for the County Council to get involved.
"We thought it was certainly worthwhile to get as much information as possible, to get some answers, thoughts and rationale as to why this is happening," he said.
Horiuchi said he will try to contact the other council members in the next few days to gauge their interest, although, he added, "we have the independent authority to go ahead and hold these hearings. The only things we'd really need to commit (are) some staff time and a place to hold the meetings."
Ideally, he hopes to get the ball rolling early in the new year.
Horiuchi, Wilson and Hatch are three of the council's four Democrats. The Salt Lake County Council is a nine-member body. But the three argued Wednesday, the proposed hearings are not about politics.
"This is not a Republican or Democrat issue. This is a Utah issue," Hatch said in a prepared statement. "Corporate raiders should not have the final say when it comes to airline safety or access to reasonable fares, and we have every reason to be concerned that if this hostile takeover goes through, the Salt Lake City airline hub will be the big loser."


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[delts145]

17 Delta creditors leery

Group asks airline to consider alternatives

By Harry R. Weber
Associated Press
ATLANTA — Seventeen creditors who hold $2.25 billion in unsecured claims against Delta Air Lines Inc. in its bankruptcy case urged the carrier Friday to consider alternatives to its stand-alone reorganization plan.
Their announcement comes a day after the chief executive of US Airways Group Inc. issued a scathing rebuke of Delta's stand-alone reorganization plan and said he is more determined than ever to push ahead with his company's hostile $8.3 billion bid to buy Delta.
The 17 creditors, who form an unofficial committee of unsecured claimholders, said in a statement that while they appreciated Delta's progress to date in its restructuring efforts, the committee "expects Delta to consider methodically, proactively and fairly strategic alternatives to its proposed stand-alone Chapter 11 plan to ensure that creditor recoveries are maximized in the Chapter 11 process."
The statement said the unofficial committee consists of 17 members that hold unsecured notes, unsecured deficiency claims relating to aircraft equipment leasing arrangements and other unsecured claims totaling more than $2.25 billion of unsecured claims against Delta.
The total estimated value of all unsecured claims in Delta's case, which it disclosed in its reorganization plan, is roughly $15 billion, Delta spokesman Michael Freitag said. That means the unofficial creditors committee represents only 15 percent of the total claims. Also, Delta's pilots union, which supports management's desire to remain an independent carrier, holds an almost equal share of unsecured claims, $2.1 billion.
A spokesman for the committee, Todd Miller, did not elaborate on the committee's statement.
Freitag said Delta will consider what the committee has to say "even though they are not an officially sanctioned voice in the Chapter 11 process." He added, "As we have stated previously, we intend to move forward in a constructive manner that serves the best interest of our creditors and other stakeholders."
That committee is separate from the official committee of unsecured creditors in Delta's bankruptcy case that has a key role in deciding Delta's fate. The official committee has said it supports Delta's decision to file its stand-alone reorganization plan on Tuesday, but will also weigh alternatives.
Other creditors, such as those on the unofficial committee, could put pressure on larger creditors to force Delta's hand. It remains to be seen how that will all play out.
Typically, in each class of creditors, Delta's plan would have to be approved by holders of two-thirds of the claims and a majority of the number of individual creditors. If a class is not impaired — that is, if they are guaranteed of getting all of their money back no matter what — they generally don't get to vote.
If one or more classes of creditors do not approve the plan, Delta could still confirm the plan through a so-called cramdown, a maneuver in which it must show the court that the dissenting class will receive more under the plan than it would under a Chapter 7 liquidation. The company also would have to show that any subordinate class, such as shareholders, would get nothing in the way of recovery under the reorganization plan.
Delta already has met that second test because its plan calls for current shares of the company to be wiped out.
If a competing plan were filed, creditors would vote on each individually. There have been bankruptcy cases where two competing reorganization plans were approved by creditors; in such a case, a judge decides which plan is confirmed after holding a hearing to determine which plan is in the "better interest" of the creditors.
As Christmas approached, US Airways CEO Doug Parker's comments Thursday made it clear his company isn't going to back down.
Delta shot back Thursday that it hasn't changed its position that it wants to remain independent, intensifying the war of words that started when Tempe, Ariz.-based US Airways disclosed its offer to buy Atlanta-based Delta on Nov. 15.

[delts145]

Associated Press

LOGAN — Now boarding — for Logan?
Why not, say local airport officials, who are asking Frontier Airlines to bring commercial flights to northern Utah.
"This will bring business into the area," said Rich Stehmeier, manager of the Logan/Cache Airport. "It'll allow for tourism to come in here, and the economic impact ... will be phenomenal."
In September, Frontier announced plans to add 10 planes for flights to 18 destinations in the Rocky Mountains region.
Logan, 80 miles north of Salt Lake City, wasn't on the list. But Frontier has said it will consider a proposal from the airport, Stehmeier said.
Frontier is looking for additional routes into Denver, where the company is based, he said. Logan officials have until Jan. 15 to submit a proposal with unemployment rates, average wages and growth.
"We're trying to show them that there is a very diverse economic base in our community and because of that, it's very stable," said Sandy Emile, chief executive of the Cache Chamber of Commerce. "We will try to make them aware of how great the need is in our community."
Frontier is expected to announce routes in June and launch a new regional carrier, Lynx Airlines, in July.
Stehmeier said he has received more than 20 phone calls from people wanting to fly from Logan. The Cache Valley Regional Council will also submit a letter of support.
"It would be a huge benefit to have commercial service out of Cache Valley so people wouldn't have to drive to Salt Lake," said Craig Peterson, council chairman.

[SLC Projects]

I never know LOGAN had a airport. Most not be very big.

[delts145]

Offer for Delta won't rise

But US Airways has no plans to halt its pursuit

By Harry R. Weber
Associated Press
ATLANTA — US Airways has no intention right now to increase its $8.4 billion offer for Delta Air Lines, and it can't see itself backing out of its pursuit of Delta for any reason, Chief Executive Doug Parker said Thursday.
In a wide-ranging telephone interview with Associated Press reporters, Parker said US Airways Group Inc., based in Tempe, Ariz., firmly believes that its offer for Atlanta-based Delta Air Lines Inc. provides more value than Delta's stand-alone plan.
"We believe our offer is more than fair and don't feel any need to amend it at this point," Parker said.
At the same time, Parker did not exactly rule out the possibility of changing his mind about the offer price.
"If these conversations move to negotiations about value, we're happy to have those conversations," Parker said. "We have not had those types of conversations yet."
Asked if there is any way US Airways would drop its hostile bid for Delta absent Delta's creditors' committee saying it wasn't interested, Parker indicated he didn't see any.
"We think this is such a unique opportunity that we have an obligation to pursue it, and because of that obligation we will pursue it and believe we will be successful," Parker said. "So, no, I can't envision any scenario where we simply say, 'We change our mind. We don't think there's the value here and we're going home."'
Delta, which operates a hub at Salt Lake City International Airport, issued a statement Thursday similar to one it issued on Dec. 21. It said it is moving forward with its stand-alone reorganization plan because it believes its plan provides creditors with "superior value as well as a faster recovery and much greater certainty of execution" than any competing proposal. Delta said nothing Parker has said recently changes that belief.
Parker's comments came as lawyers for Delta, the nation's third-largest carrier, said Wednesday they have scheduled a Feb. 7 hearing in bankruptcy court to consider approval of the disclosure statement to the carrier's stand-alone reorganization plan.
The disclosure statement includes details on Delta's operations. If the statement is approved, that means Delta can begin soliciting votes on the reorganization plan, which typically takes four to eight weeks, Delta spokesman Michael Freitag said.
Delta is seeking to establish Feb. 1 as the date by which persons who want to vote on the reorganization plan must be creditors of the airline.
Parker said in Thursday's interview that if the hearing Delta has scheduled goes forward, it could create some urgency to US Airways' hopes of buying Delta, because US Airways is hoping to consummate the deal before Delta emerges from Chapter 11.
"If we start moving to the point where there are things put in front of the court that are inconsistent with our proposal, yeah, you'll see the urgency pick up," Parker said.
He did not elaborate on what US Airways might do if that happens.
Parker said he is convinced that, despite the position of Delta management and its employees against the proposal, Delta will eventually come around and that Delta's creditors will support US Airways' offer.
"What I believe is they will come to the same conclusion that the public holders of their bonds have come to, which is that our proposal is worth a lot more than the stand-alone plan," Parker said.
Delta's bond prices have increased since US Airways' offer. They increased further after Delta filed its stand-alone plan.
According to Delta, its bonds traded at 67 cents to 68 cents on the dollar Thursday and have traded in that price range since Delta filed its plan of reorganization on Dec. 19. The bonds were trading at 39 cents to 40 cents on the dollar before US Airways' offer was disclosed on Nov. 15.
Delta has said it projects it will be worth $9.4 billion to $12 billion if it emerges from Chapter 11 as a stand-alone carrier, but US Airways has disputed Delta's valuation, saying it is unrealistic and much too high.
As for where a merged US Airways-Delta would be based, Parker insisted that US Airways has made no decision.
Delta faces the bid by US Airways, even as Delta's reorganization plan calls for Delta to emerge from Chapter 11 by the middle of next year as a stand-alone carrier.
US Airways is hoping Delta's creditors force Delta's hand in its direction.

[delts145]

Delta unveils its plan to buy 30 regional jets

By Eric Torbenson
Bloomberg News
Delta Air Lines Inc., the largest U.S. carrier in bankruptcy, plans to buy 30 Bombardier Inc. regional jets to feed its hub airports as it moves closer to exiting court protection.


Jeffrey D. Allred, Deseret Morning News
A Delta 757 aircraft is refueled at the Salt Lake International Airport earlier this week. The airline wants to add 30 Bombardier aircraft.

Delta also has options for 30 more of the 76-seat CRJ900s, the Atlanta-based carrier said Thursday in a filing asking U.S. Bankruptcy Judge Adlai Hardin's permission to make the purchase. The airline didn't disclose other terms.
The new planes will have a two-class cabin and 50 percent more capacity than the 50-seat models now dominating the regional fleet at Delta, which says the jets will meet demand at its Atlanta, Cincinnati and Salt Lake City hubs. Delta is fighting US Airways Group Inc.'s hostile merger offer.
"These larger regional jets fit every airline's plan," said Roger King, an analyst at bond-research firm CreditSights Inc. in New York. With more seats than most regional jets now flying, the bigger planes cost less to fly each mile, he said.
The CRJ900 has a list price of about $35.2 million, which means a 30-plane purchase may be valued at as much as $1.1 billion. Airlines typically negotiate discounts to the list price.
Bombardier spokesman Marc Duchesne confirmed a letter of intent by Delta to purchase the planes, pending court approval. Delta said in the filing it has an agreement with Montreal-based Bombardier that is under seal.
Having a two-class cabin with roomier, first-class seats was a key concern for Delta's best customers, Delta spokeswoman Betsy Talton said in an e-mailed statement.
Carriers including UAL Corp.'s United Airlines say two-class cabins boost revenue by enticing business fliers who otherwise might avoid regional jets. Network carriers are buying more 70- to 100-seat models compared with the 50-seaters from the first generation of regional jets in the 1990s.
Delta is now discussing changes in its regional flying with its commuter carriers, including wholly owned Comair and St. George-based SkyWest Inc. unit Atlantic Southeast Airlines, Talton said.
Delta, the third-largest U.S. airline, plans to emerge from bankruptcy in the first half of this year and last month rejected US Airways' $8.42 billion merger bid. Delta's official creditors committee is studying the US Airways offer as well as the carrier's own plan to stay independent.


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[SLC Projects]

WTF? Delta can buy 30 regional jets but yet they can't keep their name on a building?

[delts145]

Originally Posted by SLC Projects

WTF? Delta can buy 30 regional jets but yet they can't keep their name on a building?

Basically, Delta is putting the money where the return is showing excellant profitability. The main reason for not continuing the name insignia was the 25 or so million cost without being able to show a measureable profit return. The earlier Delta can exit from bankruptcy,the better their chance of staving off a take-over from U.S. Air.

[delts145]

Delta planes were flying 77.8% full in December
Tribune Staff
and Wire Services

If you thought Delta Air Lines aircraft were full in December, you were right.
Load factor - the ratio between available seats and filled seats - reached a record 77.8 percent, the airline said Thursday. A year earlier, Delta's load factor was 75.3 percent, also a record.
In fact, Delta's planes were full all year. Its load factor was a record 78.5 percent in 2006, up from the previous high of 76.5 percent in 2005.
Passenger numbers increased 3.5 percent in December from the same month of 2005. But the company's number of available seats was up just 0.2 percent, the Atlanta-based airline said.
The load factor increases came largely as Delta moved further into international flying, which is usually more profitable.
The number of Delta passengers flying inside the United States decreased 4 percent in December while seat capacity fell 7.3 percent. International passenger numbers surged 26.4 percent on a 22.9 percent increase in capacity.
Also on Thursday the nation's third-largest carrier asked a bankruptcy court judge to approve the company's agreement to buy more regional jets that will allow it to expand into new markets.
The company said it has reached a deal with Bombardier to buy 30 aircraft with the option to buy another 30 aircraft.
The two-class aircraft are 76-seat regional jets that ''will permit Delta to expand into new markets that it cannot now profitably serve and to upgrade, where appropriate, markets being served with smaller aircraft,'' Delta said in its motion.
"The aircraft that we are purchasing will be used in our hub cities - Salt Lake, Cincinnati, New York and Atlanta," spokesman Anthony Black said.
The deal is related to Delta's decision in August to reconsider which regional carriers will provide it with connecting flights in some markets. Delta subsidiary Comair, which is based in Erlanger, Ky., has been trying to cut its costs so it can compete for the flying.
In November, Delta selected SkyWest Inc. to take over some of the regional flying business operated by its Comair subsidiary. Starting in February, Delta will shift 12 jets to the St. George-based parent of SkyWest Airlines and Atlantic Southeast Airlines.
SkyWest Inc. has placed bids to fly another 131 aircraft.
The delivery dates for the new aircraft Delta is buying range from September 2007 through February 2010. The additional aircraft Delta has the option of buying would have delivery dates ranging from January 2008 to March 2009.
Financial terms were not disclosed.

[JimInCal]

20% Increase to $10.2 Million. The article is fairly long so I'm just incuding the link instead of pasting the article.

http://news.yahoo.com/s/ap/20070110/...lta_us_airways

[HX_Guy]

Yea I heard about that this morning on the news...they seem pretty set on getting this done and $10,200,000,000.00 might just be tempting enough to Delta's creditors.

I just hope they stay in the Phoenix area if it does go through, otherwise I would rather it just not happen.

[nbrindley]

you mean 20% increase to $10.4 Billion?

[JimInCal]

Originally Posted by nbrindley

you mean 20% increase to $10.4 Billion?

OOPS, your right...billion with a B!

[SLC Projects]

These guys are just not giving up...........................



US Airways Increases Offer for Delta Air Lines
January 10th, 2007 @ 8:29am

By HARRY R. WEBER
AP Business Writer

ATLANTA (AP) -- US Airways Group Inc. raised its offer for Delta Air Lines Inc. by 20 percent to $10.2 billion on Wednesday, as it seeks to put pressure on the bankrupt carrier's creditors to agree to a deal that Delta's management opposes.

It also set a Feb. 1 deadline for certain conditions to be met or its entire bid would be revoked.

US Airways said it would raise its offer by $1.7 billion from its Nov. 15 bid that was currently valued at $8.5 billion.

The increased offer comes just two weeks after the chief of Tempe, Ariz.-based US Airways, Doug Parker, told The Associated Press that his company had no intention at the time to increase its offer.

Even so, Parker did not exactly rule out the possibility of changing his mind about the price.

"If these conversations move to negotiations about value, we're happy to have those conversations," Parker said in the interview.

In a statement Wednesday, Parker said US Airways was raising its bid to remove any doubt that its bid was worth more than Delta's plan to remain a standalone carrier.

Parker said in an interview Wednesday that Delta's creditors committee did not ask US Airways to raise its offer, but it indicated it was having a hard time making up its mind.

"They were struggling with a decision and the analysis of our proposal versus that of Delta's standalone proposal," Parker said. "We just wanted to make it a much, much easier analysis for them, and today we've done that."

Delta said in a statement Wednesday that its board will do its duty to review the revised offer by US Airways. But, the airline added, "On its face, the revised proposal does not address significant concerns that have been raised about the initial US Airways proposal and, in fact, would increase the debt burden of the combined company by yet another $1 billion."

US Airways said the increased offer is set to expire on Feb. 1 unless creditors indicate support for the start of the due diligence process, which would open up Delta's books to US Airways. US Airways also wants Delta to postpone a Feb. 7 bankruptcy hearing involving its reorganization plan, and it wants the creditors committee to support both companies filing paperwork with the Justice Department that would start the regulatory process.

Parker said "the offer would go away in its entirety" if those conditions were not met.

"There's an offer on the table now and it would expire," Parker said.

Parker also suggested that at this point, US Airways isn't too worried about Delta management's position.

"We would very much like to see Delta management begin to work with us and support this transaction, but that's not what this proposal is about," Parker said.

In a memo to US Airways employees, Parker added, "While I regret the response thus far from Delta's management, I look forward to the day when it will be appropriate to communicate directly with Delta's employees."

The increased bid includes 89.5 million shares of US Airways stock and $5 billion in cash. The original offer included 78.5 million shares of US Airways stock and $4 billion in cash. The value of the increased bid could go even higher if US Airways' stock rises after the market opens later Wednesday.

Executives of Atlanta-based Delta have said they oppose a buyout by US Airways. The nation's third-largest carrier has filed a reorganization plan that calls for it to emerge from bankruptcy by the middle of this year as a standalone company worth $9.4 billion to $12 billion.

Based on the Delta's valuation method, US Airways estimated that its increased bid could actually be worth $12.7 billion to $15.4 billion.

Despite the position by Delta management, Delta's unsecured creditors committee in its bankruptcy case will play a key role in deciding the airline's future course. The committee had said prior to Wednesday that it was reviewing both Delta's standalone plan and US Airways' buyout offer.

The Feb. 7 bankruptcy hearing would be to consider approval of Delta's disclosure statement relating to the carrier's standalone reorganization plan.

The disclosure statement includes details on Delta's operations. If the statement is approved, that means Delta can begin soliciting votes on its reorganization plan, which typically takes four to eight weeks.

Parker has said previously that if that hearing were to go forward it could increase the urgency of US Airways' bid because US Airways hopes to consummate its deal to buy Delta before Delta emerges from Chapter 11.

US Airways still has not said where a combined US Airways-Delta would be based. Parker said Wednesday no decision on that has been made.

Delta management has argued that the combination of US Airways and Delta would not receive regulatory approval because of the overlap of the two carriers' routes. US Airways says there wouldn't be any regulatory holdup. A Jan. 24 hearing has been scheduled by the Senate Committee on Commerce, Science and Transportation on the state of the airline industry and the potential impact of airline mergers.

[JimInCal]

Dude, I posted that story first thing this morning. It was long so I just added the link.

[SLC Projects]

Originally Posted by JimInCal

Dude, I posted that story first thing this morning. It was long so I just added the link.

Dude, I posted the story off of KSL. not the same one from Yahoo news.