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Old November 15th, 2007, 12:38 PM   #301
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Official: United, Delta Mull Combination
15 November 2007

ATLANTA (AP) - United Airlines and Delta Air Lines have been discussing a combination between the nation's second- and third-largest carriers that would keep the United name and the corporate headquarters in Chicago, according to an official with knowledge of the talks.

The reported talks come as all airline executives are wrestling with the implication of oil prices hovering close to $100 a barrel. That has sharply boosted jet fuel expenses -- and accelerated a search for ways to cut costs, which typically are the result of airline takeovers.

Earlier Wednesday, Delta said its board established a special committee to work with management to review and analyze strategic options for the airline. Top executives have said recently they are trying to determine whether consolidation makes sense for Delta.

Delta issued a statement denying "published reports that it had engaged in merger talk with United." CEO Richard Anderson was quoted as saying, "There have been no talks with United regarding any type of consolidation transaction and there are no such ongoing discussions."

United called the report of recent talks "wholly inaccurate."

The Wall Street Journal's online edition, citing unidentified people, reported Wednesday that Anderson has informally talked about consolidation possibilities with counterparts at other airlines, including senior executives at United and Northwest Airlines.

Then-Delta CEO Gerald Grinstein said during a stop in New York on Oct. 12, 2006, that he had previously received "feelers" from United about a possible merger.

There is a sense of urgency in the most recent talks, which have been going on for some time and continued as recently as a week or so ago, the official with knowledge of the talks said Wednesday. The official spoke on condition of anonymity because the person was not authorized to speak publicly. The official stood by the assertions about the talks after learning of the statements by Delta Air Lines Inc. and United, a unit of UAL Corp.

"They want to get something done before a new administration gets in and so they get the clock ticking on" federal regulatory approval, the official said.

Financial details were not clear. But the talks involve United being the name of the combined airlines, the headquarters staying in Chicago and Delta's Atlanta hub being an operational center for the two carriers, the official said. One possible scenario involves Delta's Anderson being the chief of the combined airline, the official said.

Delta also has had talks with other airlines, the official said, without specifying which airline or the status of any such talks.

Shares of Delta rose 77 cents, or 4.1 percent, to $19.52 Wednesday while UAL shares gained 67 cents, or 1.5 percent, to $44.17.

When Anderson was named in August as Delta CEO to replace Grinstein, there was immediate speculation in the investment community that Delta and Northwest might eventually merge. Anderson is a former CEO of Northwest Airlines Corp.

Anderson immediately tried to dispel such speculation, telling Delta employees he wasn't coming to Delta to facilitate a deal with Eagan, Minn.-based Northwest.

Delta's initial statement Wednesday about the establishment of a board committee followed the release of a letter by a hedge fund that owns 7 million Delta shares that called on the airline to consider combining with UAL.

Pardus Capital Management LP said in the letter to Delta's top management that it is "imperative" that the company undertake a merger transaction with another airline in view of soaring fuel prices and what it described as the increased risks of going it alone.

"Consolidation is needed to de-risk the industry and time is of the essence as now is the right regulatory environment," said Karim Samii, president of Pardus, and Shane Larson, a principal.

The hedge fund executives said they had determined since making a similar recommendation in a Sept. 7 letter that "the most attractive and practical combination would be a Delta and United Airlines combination."

It cited figures from a consulting firm estimating that the benefits of such a pairing would be about $585 million and said a combined Delta-United would boast a broader network than any other combination.

Pardus also owned 5.6 million shares of Chicago-based UAL as of Sept. 30.

Pardus executives said a Delta combination with Northwest would produce even bigger benefits of about $1.5 billion, primarily from combining the smallest hubs -- Detroit/Cincinnati and Memphis/Atlanta.

"However, Northwest may not enable Delta to complete the breadth of network that business travelers require, resulting in the need for a potential follow-on transaction at a later date in order to achieve the same breadth of network that UAL would provide out of the box."

Pardus, citing information provided by the air transport consultancy Simat, Helliesen & Eichner Inc., said a third potential combination, with Continental Airlines Inc., would produce no synergies and would raise other challenges.

Robert Mann, an airline consultant in Port Washington, N.Y., said United's broad Pacific network and Delta's huge Atlantic presence would complement each other. However, he said, combining fleet information systems and labor could pose challenges. The biggest problem would be that neither carrier has any recent track record of integration, he said.

"I would see this as a very risky move from the standpoint of the actual implementation," Mann said.

Sen. Byron Dorgan, D-N.D., a member of the Senate Commerce Committee's subcommittee on aviation operations, safety and security, issued a statement saying he was troubled by the hedge fund's push for a merger.

"I hope the hedge funds and the airlines will both understand that there will be substantial resistance here in the U.S. Congress to a merger between two of the largest three airlines in America," Dorgan said.

------

AP Business Writer Dave Carpenter in Chicago contributed to this report.
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Old November 15th, 2007, 03:25 PM   #302
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Utah, home of major Delta hub, keeps eye on merger reports
14 November 2007

SALT LAKE CITY (AP) - Utah officials are worried that a merger between Delta Air Lines and United Airlines could mean the end of Delta's Salt Lake City hub.

United has a regional hub in Denver. So would a combined airline sacrifice one of its Western footholds?

"I can understand why you'd have that question," Dave Williams, deputy director of the Utah Office of Tourism, said Wednesday. "But today's the first we've heard of it, and I'm not prepared to speak on it."

Executives at Salt Lake's airport were in a huddle over news of the possible merger and weren't immediately prepared to speculate on the outcomes, said David Korzep, the airport's operations superintendent.

UAL Corp.'s United Airlines and Delta issued statements denying an Associated Press report that they were discussing a merger.

But an official with knowledge of the talks stood by his account that discussions were in play. The Wall Street Journal's online edition reported that Delta's CEO has held informal talks with a number of possible suitors.

Also Wednesday, the Delta pilots union issued a statement saying it would not oppose a combination.

Delta and its partners operate 335 flights from Salt Lake City, and the loss of a hub would be a major blow to the city's prestige and the convenience of travelers.

In August, when Utah awarded Delta $250,000 as an incentive to add direct flights to Paris, Gov. Jon Huntsman called the new route a "huge deal." Those flights are scheduled to start next June.

Utah lawmakers also went to bat for Delta with federal regulators last December. Delta was fighting a hostile takeover bid by US Airways Group Inc. and claiming the Salt Lake City hub would be in jeopardy. But US Airways spokesman Phil Gee said it never intended to shut down the hub.

Huntsman was keeping an eye on reports of a possible merger.

"It's just difficult at this point to speculate," his spokeswoman, Lisa Roskelley, said. "We just don't have any information at this point."

The talks were said to involve United keeping the name of a combined airline and its Chicago headquarters, and Delta's Atlanta hub being an operational center for the two carriers, according to an official who spoke to the AP on condition of anonymity because neither airline authorized the release of information.

Lane Beattie, president of the Salt Lake Area Chamber of Commerce, called a Delta executive Wednesday and was told no merger was in the works but that if any pairing occurs, Delta would hold the dominant position, chamber spokeswoman Natalie Gochnour said.

"The importance of the Delta is very evident to the business community here," Gochnour said. "We have flexibility and access to markets and direct flights in frequencies we otherwise would not have."
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Old November 16th, 2007, 08:59 AM   #303
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Industry analysts believe airline consolidation inevitable as fuel costs pressure bottom lines
15 November 2007

ATLANTA (AP) - Wall Street analysts are still putting stock in Delta and United combining or merging with other carriers, even as the nation's No. 2 and No. 3 airlines deny they have talked about a deal.

"Delta's refutation of current merger talks with any other airline, including United, only means no formal meetings have taken place thus far," Bear Stearns airline analyst Frank Boroch said in a research note. "It doesn't change Delta's recognition of consolidation's benefits nor Delta's board decision to set up a strategic committee and hire advisers in new CEO Richard Anderson's first 10 weeks on the job."

Goldman Sachs analyst Robert Barry wrote Thursday that his firm believes the demands from investors for consolidation will intensify as rising fuel costs and other pressures continue to threaten airline profitability.

Barry said he believes "all airline management teams and boards have been discussing consolidation, ad nauseam, for months if not longer."

On a day when crude oil prices remained above $93 a barrel and stocks were down overall, Delta Air Lines Inc. shares rose 1.6 percent Thursday to $19.84, on the heels of a 4 percent increase a day earlier. But shares of United's parent company, UAL Corp., fell 2.1 percent to $43.26.

An official with knowledge of the situation told The Associated Press on Wednesday that United and Delta have been discussing a combination that would keep the United name and the corporate headquarters in Chicago, with Anderson possibly being the surviving CEO.

The official, who spoke on condition of anonymity, stood by the assertions after Delta and United issued strong denials.

Anderson was in Washington Thursday and Rep. Lynn Westmoreland, R-Ga., told him at a congressional hearing that he felt "blindsided" by reports of a possible Delta-United combination. Noting that he represents more Delta employees than any other member of Congress, Westmoreland asked Anderson to explain.

"I have not talked to (United's Chairman and Chief Executive) Glenn Tilton or any other executive at United Airlines since the last time I was in the industry four years ago," Anderson said, adding that no discussions are ongoing or planned. Anderson, a former Northwest CEO, was named to the top job at Delta in August.

Three Delta directors reached by the AP -- John Brinzo, Paula Rosput Reynolds and Walter Massey -- declined to comment on the possibility of a Delta-United combination. Asked if his position on commenting could change later, Brinzo responded, "Who knows what facts and circumstances will present themselves in the future? But it's inappropriate for me to comment."

Delta's pilots union said in a statement Wednesday that it is not opposed to consolidation, but wants to be an active participant in any discussions Delta has on the subject. "The 'right' merger opportunity could draw our support and result in a successful merger. However, we are not interested in a transaction just for transaction's sake," the union said.

William Greene, an analyst at Morgan Stanley, said an issue the airlines have to consider is that the regulatory window may be closing and that they need to act fast if there are going to be any mergers in the industry.

"We think pressure to 'do a deal' sooner rather than later is growing," Greene said in a research note Thursday.

There are plenty of cost savings to be reaped from a merger of two major airlines, from reducing the number of available seats to downsizing or eliminating overlapping hubs and routes. Delta has a hub in Salt Lake City and United has a hub a few hundred miles away in Denver. Some observers have speculated one of the hubs could be at risk if United and Delta combined.

Delta also has a hub in Cincinnati, while United's main hub is 250 miles away in Chicago.

The greatest obstacles to a Delta-United combination would be dissent from unions, whose members' job assignments typically are based on seniority, and the difficulty getting regulatory approval.

After news of recent talks between Delta and United surfaced Wednesday, Sen. Byron Dorgan, D-N.D., a member of the Senate Commerce Committee's subcommittee on aviation operations, safety and security, issued a statement saying "there will be substantial resistance here in the U.S. Congress to a merger between two of the largest three airlines in America."

Earlier Wednesday, it was disclosed that Pardus Capital Management LP, a hedge fund that owns 7 million Delta shares, had written a letter to Delta that called on the airline to consider combining with United. Pardus also owned 5.6 million shares of UAL as of Sept. 30.

As then-chairman and CEO of Texaco Inc., Tilton was at the helm when his company agreed to be acquired by Chevron Corp. in 2001. Now chief of Chicago-based United Airlines, Tilton has said there are merits to mergers in the airline industry.

After presenting a five-year plan last month to UAL's board of directors, he said the plan "contemplates the eventual consolidation of the industry and United's role in that process."

The board at Atlanta-based Delta, meanwhile, said Wednesday it has established a special committee to work with management to review and analyze strategic options for the airline.

When Anderson was named to replace Gerald Grinstein as Delta's CEO, there was immediate speculation that Delta and Northwest might eventually combine since Anderson used to head Northwest and there would be obvious synergies. Anderson tried to dispel such speculation, telling employees that he hadn't come to Delta to facilitate a deal with Northwest.

But with all airlines struggling with sky-high fuel costs, "as far as consolidation goes, it has to happen, it's going to happen," said Terry Trippler, an airline industry expert in Minneapolis.

------

AP Business Writers Dave Carpenter in Chicago and Dan Caterinicchia in Washington contributed to this report.
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Old November 17th, 2007, 05:51 AM   #304
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Quote:
Originally Posted by hkskyline View Post
Official: United, Delta Mull Combination
15 November 2007

ATLANTA (AP) - United Airlines and Delta Air Lines have been discussing a combination between the nation's second- and third-largest carriers that would keep the United name and the corporate headquarters in Chicago, according to an official with knowledge of the talks.

The reported talks come as all airline executives are wrestling with the implication of oil prices hovering close to $100 a barrel. That has sharply boosted jet fuel expenses -- and accelerated a search for ways to cut costs, which typically are the result of airline takeovers.

Earlier Wednesday, Delta said its board established a special committee to work with management to review and analyze strategic options for the airline. Top executives have said recently they are trying to determine whether consolidation makes sense for Delta.

Delta issued a statement denying "published reports that it had engaged in merger talk with United." CEO Richard Anderson was quoted as saying, "There have been no talks with United regarding any type of consolidation transaction and there are no such ongoing discussions."

United called the report of recent talks "wholly inaccurate."

The Wall Street Journal's online edition, citing unidentified people, reported Wednesday that Anderson has informally talked about consolidation possibilities with counterparts at other airlines, including senior executives at United and Northwest Airlines.

Then-Delta CEO Gerald Grinstein said during a stop in New York on Oct. 12, 2006, that he had previously received "feelers" from United about a possible merger.

There is a sense of urgency in the most recent talks, which have been going on for some time and continued as recently as a week or so ago, the official with knowledge of the talks said Wednesday. The official spoke on condition of anonymity because the person was not authorized to speak publicly. The official stood by the assertions about the talks after learning of the statements by Delta Air Lines Inc. and United, a unit of UAL Corp.

"They want to get something done before a new administration gets in and so they get the clock ticking on" federal regulatory approval, the official said.

Financial details were not clear. But the talks involve United being the name of the combined airlines, the headquarters staying in Chicago and Delta's Atlanta hub being an operational center for the two carriers, the official said. One possible scenario involves Delta's Anderson being the chief of the combined airline, the official said.

Delta also has had talks with other airlines, the official said, without specifying which airline or the status of any such talks.

Shares of Delta rose 77 cents, or 4.1 percent, to $19.52 Wednesday while UAL shares gained 67 cents, or 1.5 percent, to $44.17.

When Anderson was named in August as Delta CEO to replace Grinstein, there was immediate speculation in the investment community that Delta and Northwest might eventually merge. Anderson is a former CEO of Northwest Airlines Corp.

Anderson immediately tried to dispel such speculation, telling Delta employees he wasn't coming to Delta to facilitate a deal with Eagan, Minn.-based Northwest.

Delta's initial statement Wednesday about the establishment of a board committee followed the release of a letter by a hedge fund that owns 7 million Delta shares that called on the airline to consider combining with UAL.

Pardus Capital Management LP said in the letter to Delta's top management that it is "imperative" that the company undertake a merger transaction with another airline in view of soaring fuel prices and what it described as the increased risks of going it alone.

"Consolidation is needed to de-risk the industry and time is of the essence as now is the right regulatory environment," said Karim Samii, president of Pardus, and Shane Larson, a principal.

The hedge fund executives said they had determined since making a similar recommendation in a Sept. 7 letter that "the most attractive and practical combination would be a Delta and United Airlines combination."

It cited figures from a consulting firm estimating that the benefits of such a pairing would be about $585 million and said a combined Delta-United would boast a broader network than any other combination.

Pardus also owned 5.6 million shares of Chicago-based UAL as of Sept. 30.

Pardus executives said a Delta combination with Northwest would produce even bigger benefits of about $1.5 billion, primarily from combining the smallest hubs -- Detroit/Cincinnati and Memphis/Atlanta.

"However, Northwest may not enable Delta to complete the breadth of network that business travelers require, resulting in the need for a potential follow-on transaction at a later date in order to achieve the same breadth of network that UAL would provide out of the box."

Pardus, citing information provided by the air transport consultancy Simat, Helliesen & Eichner Inc., said a third potential combination, with Continental Airlines Inc., would produce no synergies and would raise other challenges.

Robert Mann, an airline consultant in Port Washington, N.Y., said United's broad Pacific network and Delta's huge Atlantic presence would complement each other. However, he said, combining fleet information systems and labor could pose challenges. The biggest problem would be that neither carrier has any recent track record of integration, he said.

"I would see this as a very risky move from the standpoint of the actual implementation," Mann said.

Sen. Byron Dorgan, D-N.D., a member of the Senate Commerce Committee's subcommittee on aviation operations, safety and security, issued a statement saying he was troubled by the hedge fund's push for a merger.

"I hope the hedge funds and the airlines will both understand that there will be substantial resistance here in the U.S. Congress to a merger between two of the largest three airlines in America," Dorgan said.

------

AP Business Writer Dave Carpenter in Chicago contributed to this report.
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Old November 21st, 2007, 05:23 AM   #305
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DOT fines Delta $115,000 for failing to provide customers with requested flight arrival data
19 November 2007

WASHINGTON (AP) - Federal regulators Monday fined Delta Air Lines Inc. $115,000 for failing to respond to customer requests for on-time arrival data of its flights.

The Transportation Department ordered Delta to cease and desist from further offenses and assessed it the civil fine for violations by several Delta Connection carriers, including Comair, Atlantic Southeast Airlines and SkyWest Airlines.

The 20 largest passenger carriers report on-time performance to the government and must provide on-time arrival statistics when requested by passengers. Through September, more than 24 percent of flights have arrived late -- the industry's worst on-time performance since comparable data began being collected in 1995.

After receiving information that some carriers are failing to respond to consumer requests, the agency launched an investigation that involved several hundred test calls to the carriers.

As a result of the government probe, Delta is requiring reservation agents to achieve a perfect score on a test that includes accurately quoting on-time flight performance if they want to stay employed, spokeswoman Betsy Talton wrote in an e-mail Monday. Any problems observed in quality-monitoring sessions the company conducts would be discussed with individual employees, she added.

Before receiving the government's notice, the Atlanta-based airline corrected problems in reservations systems' software that did not properly display information for certain Delta Connection flights, Talton said. But that error did not affect the global distribution system or Delta's Web site accessible to the public, where more than 80 percent of Delta's tickets are issued.

"We believe these actions have worked, and the department's enforcement office said the positive impact is reflected in the results of the its most recent test calls," Talton said.

The Transportation Department said its enforcement office is continuing to investigate other carriers after imposing fines last month for similar violations of $50,000 on Hawaiian Holdings Inc.'s Hawaiian Airlines and $30,000 on JetBlue Airways Corp.

The agency in May began investigating flights that are at least 15 minutes late more than 70 percent of the time, and last month said it had identified 26 that met those criteria.

If any of those flights also were delayed in the most recent quarter under review, the responsible airlines will face "significant financial penalties," a government spokesman said last month. Results of the investigation are expected shortly.

Shares of Delta fell 96 cents, or 4.8 percent, to $19.01 Monday. The company's stock has traded between $14.94 and $21.95 in the past year.
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Old November 23rd, 2007, 03:55 PM   #306
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Delta will start code-sharing with KLM on the following routes:

Amsterdam - Glasgow - Amsterdam
Amsterdam - Stockholm - Amsterdam
Amsterdam - Warsaw - Amsterdam
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Old November 24th, 2007, 04:12 PM   #307
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Delta pilots call merger proposal 'poisonous vision'

WASHINGTON, Nov 20 (Reuters) - Pilots at Delta Air Lines Inc on Tuesday called an overture by a private equity shareholder for the carrier to merge with United Airlines a "poisonous vision" and warned that any attempt at consolidation would fail without the union's support.

Hedge fund Pardus Capital Management LP urged Delta management last week to seek an all-stock merger with United Airlines parent UAL Corp . Pardus holds about 2.5 percent of Delta's outstanding shares and about 4.8 percent of UAL.

"Pardus' demand for a merger between Delta and United is a poisonous vision built upon an artificial timeline and focused primarily on a financial transaction," said Lee Moak, chairman of the Delta pilot's union.

Moak said in a letter to members that consolidation involving Delta may be inevitable and could be supported by the union, "given the right set of circumstances."

But, he said, pressure by Pardus for a Delta-United deal is tantamount to a hostile takeover.

Representatives for Pardus and Delta had no immediate comment on Moak's letter.

Airline shares sagged on Tuesday as oil prices creeped closer to $100 per barrel. Delta closed down $1.56, or 8.2 percent, to $17.45 on the New York Stock Exchange, while UAL lost $2.57, or 6.3 percent, at $38.19 on Nasdaq.

The pilots are the only unionized work group at Delta and were instrumental in helping to fend off a merger bid earlier this year by US Airways Group Inc .

"As we demonstrated in the case of the US Airways assault on our company, we can stop a consolidating event that is not in our best interests, and we will treat the demands by Pardus no less seriously than those presented by US Airways last year," Moak said.

Delta and United pilots are represented by the Air Line Pilots Association.

In an interview, Moak stopped short of saying the union would try to block the attempt by Pardus, but he questioned its analysis. He was also skeptical of Pardus' wish for a relatively quick deal to blunt the impact of soaring fuel prices on operating costs.

"I don't like Pardus' tactics. This is a very complex, difficult strategic decision that will have effects for many years," Moak said.

He said any consolidation attempt should be carefully handled "or else we'll all end up in bankruptcy again."

Delta emerged from bankruptcy last spring after 18 months in Chapter 11 protection. Prior to its exit, the company fended off the US Airways bid.

Delta and United have said they are interested in industry consolidation, but have denied they are in talks with each other. Delta has formed a committee to explore merger options.

Industry analysts say shrinking the number of big players would reduce excess airline seating capacity, cut operating costs, and increase profits.

The most recent major airline merger, which involved US Airways and America West in 2005, was deemed successful by Wall Street and the industry in general at the time.

But US Airways has yet to resolve key contract differences with pilots.
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Old November 24th, 2007, 07:35 PM   #308
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Old December 6th, 2007, 09:59 AM   #309
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Delta traffic up 5 percent in November on capacity expansion and international growth
5 December 2007

ATLANTA (AP) - Delta Air Lines Inc. said Wednesday overall traffic rose 5 percent in November on rise in capacity and strength in international markets.

The carrier said revenue passenger miles increased to 9.36 billion in the month, compared with 8.91 billion revenue passenger miles in November 2006. A revenue passenger mile is an industry unit measuring one paying passenger flown one mile.

Delta's U.S. traffic rose 0.2 percent to 6.46 billion revenue passenger miles in November, while international traffic surged 19 percent to 2.91 billion revenue passenger miles.

Total system capacity rose 5.6 percent to 12.15 billion available seat miles, from 11.51 available seat miles in the same period last year.

So far this year, traffic has risen 5.3 percent to 112.35 billion revenue passenger miles, from 106.7 billion revenue passenger miles in the comparable period in 2006.

Year-to-date capacity has increased 2.5 percent to 139.26 billion available seat miles, compared with 135.87 billion available seat miles in the same period in 2006.

Delta shares rose 6 cents to $18.36 in aftermarket trading. They lost 31 cents to close at $18.30 in the regular session.
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Old January 8th, 2008, 08:26 AM   #310
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Delta says no decision imminent on Comair sale

NEW YORK, Jan 7 (Reuters) - Delta Air Lines Inc said on Monday that it did not expect an "imminent" announcement on the sale of regional jet service unit Comair.

"We continue to evaluate our options to sell Comair," said Delta spokeswoman Betsy Talton. "No decision is imminent."

Delta, the No. 3 U.S. carrier, has been considering the sale of Comair since exiting bankruptcy at the end of April 2007, but has yet to close a deal.

The Financial Times reported on Sunday that Delta has put the sale of Comair on hold as it explores its strategic options, including mergers.

Buyers may also be scarce.

Regional carriers face a tough market, with U.S. airlines looking to cut costs as oil hovers near a record high and the U.S. economy softens. Also, if major U.S. carriers do merge, regional feeder service would likely be reduced.

AMR Corp , the parent of American Airlines, is also seeking to shed its regional carrier American Eagle. It plans to divest American Eagle sometime this year and has said it could sell it or spin it off.
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Old January 10th, 2008, 05:37 AM   #311
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Delta Air pilots meet to weigh merger possibility

WASHINGTON, Jan 9 (Reuters) - Leaders of the Delta Air Lines pilots' union are meeting this week to address merger possibilities involving the carrier, the labor group said late on Wednesday.

"Consolidation may indeed be at our door," Lee Moak, chairman of the pilots' union, said in a letter to members. "How we face its challenges will have a significant impact on our careers and profession for decades to come."

Merger speculation has engulfed Delta since the autumn. The carrier set up a special board committee to review potential consolidation but management has not set a timetable for the panel to reach any conclusions.

A Delta spokeswoman on Wednesday night had no direct comment on the pilots' meeting but said the carrier would not provide updates on the board committee's work.

Delta shares rose $1.75, or 14 percent, to close at $13.52 on Wednesday after UBS raised ratings and increased price targets on several U.S. airlines, including Delta.

Analyst Kevin Crissey wrote in a note to clients that UBS believes a major merger "is more likely than not" in the next six months with a Delta/Northwest Airlines Corp combination the "most likely" possibility.

Delta shares rose to $14.20 in after-hours trading on the New York Stock Exchange.

Delta executives have said the company does not have to merge to be successful but soaring fuel prices and softening travel demand have spurred questions about the industry's overall financial health in 2008 and intensified merger speculation around a handful of big carriers.

The union reiterated that Delta pilots do not oppose consolidation under the right circumstances, but will not stand idly by if a deal is proposed they do not favor.

"Any attempt at consolidation will fail without the active involvement and support of the pilots from the earliest formative stages of the effort," Moak said.

The pilots have retained legal and financial advisers to address potential mergers. The group has also reactivated its strike-preparedness committee in the event that it wants to increase its leverage over the process. The strike committee also supports picketing and lobbying efforts and played an important role in Delta's successful effort to fend off an merger bid last year by US Airways Group Inc.
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Old January 15th, 2008, 06:45 AM   #312
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ANALYSIS-A Delta merger would face tough antitrust review

WASHINGTON, Jan 14 (Reuters) - Delta Air Lines would face an unprecedented airline antitrust review if it decides to propose a merger with either Northwest Airlines or United Airlines parent UAL Corp .

Industry consultants, lawyers, and former government officials agree either merger would present the U.S. Justice Department with its toughest airline test. And with a crucial election year underway, Congress would certainly weigh in.

"None of this is going to be easy," said Darryl Jenkins, a Virginia-based airline consultant. "This is an awfully big merger. No matter who does it, it will be looked at very carefully."

A Delta merger review would include serious scrutiny of large international route networks. It would also test a popular assumption that the merger parties would get more favorable treatment from the Bush administration compared with a possible Democratic one in 2009.

Antitrust lawyers polled by Reuters said none of the leading presidential candidates was considered an antitrust maverick, although Democrats have had a reputation for being more aggressive than Republicans in challenging mergers.

James Burnley, a former U.S. transportation secretary under President Ronald Reagan, said there is merit in rolling out something soon to ensure scrutiny by Republicans, but "that doesn't mean anyone gets a free pass."

Delta management wants to begin formal merger talks with Northwest and United, the Wall Street Journal reported last week. The airlines have not commented.

For sheer size and reach, No. 3 Delta hooking up with either No.2 United or No. 5 Northwest is only comparable to an earlier bid by United to swallow US Airways. That attempt collapsed in 2001 after an lengthy antitrust review, completed by the Bush Justice Department, raised serious competition concerns.

All experts agreed Congress would seek to have influence. Lawmakers -- worrying about the impact on airline service to their districts, jobs, and ticket prices -- could not halt a merger outright. However, they could pressure the White House and antitrust enforcers.

Delta appealed to lawmakers in its successful effort to turn back a hostile merger bid from US Airways Group Inc last year.

Two aviation heavyweights in the Democratic-run House of Representatives, Reps. James Oberstar of Minnesota, where Northwest is headquartered, and Jerry Costello of United's home base of Illinois, are both skeptical of big mergers. They have signaled in recent months at hearings and in interviews that the industry should proceed carefully.

The most comparable period for consolidation, experts say, was the mid 1980s when a flurry of merger activity involving healthy or relatively healthy companies.

A merger between Delta and Northwest, or with United, would be unprecedented, because of their size and the fact that all three carriers are financially stable.

The Bush administration has approved two big airline mergers: American Airlines acquisition of TWA in 2001 and the merger of US Airways and America West in 2005. Both involved financially distressed companies, US Airways and TWA, a situation that generally gets a more sympathetic government review.

The paramount concern for the government would be the market share of a United-Delta or Northwest-Delta combination.

Delta and United together comprise nearly a quarter of domestic service based on passenger traffic. Delta and Northwest account for about 18 percent, the latest Transportation Department figures show.

Dominance on specific routes and at key airports would also be carefully scrutinized. Delta commands 53 percent of business at its Atlanta hub and a third of flights at Salt Lake City and Cincinnati.

United's share at Chicago's O'Hare airport is 40 percent; 42 percent at Denver and San Francisco, and 21 percent at Washington Dulles. Northwest has 66 percent of the business at Minneapolis, 60 percent at Detroit, and half of all flights at Memphis.

Antitrust officials characteristically would seek divestment at certain airports, depending on the merger combination, and target overlapping routes.

One insider, who did not want to speak for attribution because he consults for major airlines, said he did not "see any show stoppers" in airports or routes for either Delta combination.

It is unclear, however, how the Justice Department would view the potential combination of international routes as well as the carriers' deep alliances with foreign carriers. Both Delta and Northwest have close ties to Air France-KLM , while Delta and United are members of competing global alliances.
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Old January 19th, 2008, 05:47 PM   #313
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What I'd like to see is Northwest Airlines buyout Delta, under the provision of spinning off Comair.

If NW bought Delta outright, the Cincinnati airport would end up like the Pittsburgh airport did with its U.S. Airways hub because Cincinnati is only 200 miles from Detroit. Cincinnati also has the dubious distinction of being one of the most expensive airports to operate at in the country, which would likely force NW to shift even more routes to Detroit.

With Comair spun off though, they would be free to seek their own alliance with someone else, and Cincinnati could maintain and grow its hub.

NW would also gain Delta's crown jewel of its Atlanta hub, and also its up and coming JFK hub. They would be the king of the East Coast/Midwest.
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Old January 24th, 2008, 04:54 AM   #314
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Delta Air Lines reports narrower 4Q loss on higher sales
23 January 2008

ATLANTA (AP) - Delta Air Lines Inc., the nation's No. 3 carrier, reported Wednesday it was hampered by high fuel prices in the fourth quarter but was able to post a narrower loss on a solid increase in sales.

For the three months ending Dec. 31, Atlanta-based Delta said it lost $70 million, or 18 cents a share, compared to a loss of $1.98 billion for the same period a year earlier. The airline did not provide a per share figure for the prior year, when it was in bankruptcy.

Excluding reorganization items, Delta said it lost $105 million in the fourth quarter. It did not provide a comparable per-share figure.

Analysts surveyed by Thomson Financial were expecting a Delta loss of 18 cents a share. Analyst estimates generally exclude one-time items.

Revenue in the fourth quarter rose 10 percent to $4.68 billion, compared to $4.25 billion recorded a year earlier.

A statement issued with the company's earnings release did not update investors on the status of talks between Delta and Northwest Airlines and United Airlines. Delta has said previously that its board is considering strategic options, including a possible consolidation transaction. The airline has not elaborated.

Chief Executive Richard Anderson told analysts during a conference call that the company's strategic review continues.

"But out of respect for that process, we will not comment on any specifics," Anderson said.

Delta executives were asked during the call how the airline would be affected if Houston-based Continental Airlines Inc. were to merge with another airline and possibly leave the SkyTeam marketing alliance of which Delta is a part.

"We want to keep all of our partners in SkyTeam, including Continental," Anderson said. He didn't say how Delta might do that under various merger scenarios being discussed in the media.

As of Dec. 31, Delta had $3.3 billion in cash, cash equivalents and short-term investments, of which $2.8 billion was unrestricted. Delta said it has an additional $1 billion available under a revolving credit facility, resulting in a total of $3.8 billion in unrestricted liquidity.

In the fourth quarter, Delta hedged 21 percent of its fuel consumption, resulting in an average fuel price of $2.61 per gallon. Delta said it realized roughly $40 million in cash gains on fuel hedge contracts settled during the quarter.

Even so, it said it spent $1.36 billion on aircraft fuel and related taxes in the quarter, compared to $1.06 billion a year earlier.

For all of 2007, Delta said it earned $1.61 billion, compared to a loss of $6.2 billion for all of 2006. It did not provide per-share figures. Full-year revenue rose to $19.15 billion, compared to $17.53 billion recorded a year earlier.

Delta said it expects operating margins of minus 2 percent to minus 4 percent in the first quarter of this year. For all of 2008, it expects operating margins of 4 percent to 6 percent. It expects to see its domestic capacity drop 2 percent to 3 percent in the first quarter, while its international capacity is expected to increase 10 percent to 12 percent in the first quarter compared to a year earlier.

President and Chief Financial Officer Ed Bastian said Wednesday that Delta is targeting 2008 earnings that are flat compared to its 2007 pretax earnings of $625 million.

Fuel prices will impact Delta going forward, but the airline believes cuts in domestic capacity and other cost controls will help offset the impact from higher fuel prices, Bastian said.

Domestic capacity cuts would likely impact Delta's hubs in Salt Lake City and Cincinnati, said Glen Hauenstein, Delta's chief of network and revenue management.

As for Delta's regional carrier, Comair, Bastian said Delta has slowed the process of deciding whether to shed the subsidiary. That's because of Delta's ongoing merger review, Bastian said.

He said Comair will always be an important part of the Delta family "however that contract gets structured."

Delta shares rose 10 cents to $14.95 in late morning trading.
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Old January 30th, 2008, 07:42 AM   #315
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Delta considers charging to check in curbside
29 January 2008

ATLANTA (AP) - Customers checking their bags curbside for flights on Delta Air Lines could soon be charged $2 per bag as part of an effort to cut costs.

Airline spokesman Kent Landers says the airline is considering such a fee but says no decision has been made.

The airline said Monday it is handing off its skycap jobs at airports in Atlanta and Los Angeles to a lower-paying subsidiary, Delta Global Services.

Delta is one of the few major airlines that doesn't charge extra for curbside check-ins.

Landers says Delta is not considering such fees for check-ins inside the airport.

He says Delta plans to eliminate the jobs of about 65 skycaps in Atlanta and 10 in Los Angeles on March 1st. The employees will be offered other airport customer service jobs or could transfer to Delta Global Services.

Skycaps rely on tips made during the curbside check-ins to boost their salary.
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Old January 31st, 2008, 09:34 PM   #316
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House chairman gives 'hell no' vote to Delta merger

By MARILYN GEEWAX
Cox News Service
Published on: 01/29/08

WASHINGTON - "Hell no!"

So said House Transportation Committee Chairman James Oberstar on Tuesday as he bluntly stated he would vigorously oppose Delta Air Lines if it tries a merger with either Northwest or United airlines.

The Minnesota Democrat said he will fight "any merger," even if Delta promised to move the merged carrier's headquarters to his home state, where Northwest is based. "Mergers do not serve the best public interest," he said.

Oberstar, the longtime, powerful chairman of the House committee with jurisdiction over civil aviation, said greater industry consolidation would result in higher fares and less service for many communities.

Mergers provide top executives with "golden parachutes," but do nothing to improve aviation, he said.

Ever since rumors began earlier this month that Delta was seeking a merger partner, Oberstar has been making it clear he would oppose such a move. On Tuesday, at a press conference laying out his committee's agenda for 2008, he said he would make fighting mergers a top priority.

He said he has not heard any new information about the status of the proposed merger, but knows what he would do if it were announced.

First, he would try to influence the Justice Department to block it on antitrust grounds. Then he would "vigorously" pressure the Transportation Department to recommend that the Justice Department stop the deal.

And finally, he would hold hearings to drum up enough political opposition to pressure the Bush administration to have its Justice Department to kill the deal.

He said will refuse to see smaller communities "left out and left behind" by mergers.
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Old February 7th, 2008, 07:07 AM   #317
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Delta, Northwest reported closer to deal
6 February 2008

ATLANTA (AP) - Delta Air Lines and Northwest Airlines are inching closer to a combination that would create the nation's largest carrier, and if a deal is reached it could be announced next week, a person briefed on the discussions told The Associated Press on Wednesday.

Delta's board of directors is expected to meet over the next several days, the person said without elaborating on the topic of the meeting.

The person, who was not authorized to talk as the negotiations entered a sensitive stage and asked not to be named, said one point of contention has been what Northwest Chief Executive Doug Steenland's role would be at the combined company.

Delta has a growing presence across the Atlantic and a strong hub in Atlanta, home to the world's busiest airport. Northwest has strong routes across the Pacific and its main hub is in Minneapolis.

It wasn't clear if other issues like the combined company's name, its headquarters location and labor issues had been fully resolved, but management structure with few exceptions had, the person said.

Atlanta-based Delta Air Lines Inc. has said repeatedly that if it were to combine with another carrier it would want to be in control, which could mean its CEO, Richard Anderson, remaining in his post and Delta's chairman, Daniel Carp, remaining in his.

Anderson, who was CEO of Eagan, Minn.-based Northwest Airlines Corp. when it began a drive to cut labor costs before he left in the fall of 2004, was replaced by Steenland. But Steenland actually carried out the cuts, leading to a mechanic's strike in 2005 and deep concessions forced on the other unions, which took effect last year while Northwest was in bankruptcy.

The person briefed on the discussions cautioned that things could change since Delta also has been talking to Chicago-based UAL Corp.'s United Airlines about a combination, and there have been reports that other carriers have been talking among themselves about possible deals.

A Delta spokeswoman said she could not comment beyond the airline's past statements that it its reviewing its strategic options, including a possible combination transaction. A spokeswoman for Northwest declined to comment. A United spokeswoman declined to comment.

Minnesota Gov. Tim Pawlenty has pointed out that Northwest has made financial commitments to keep its headquarters and a hub in Minnesota. Northwest would give up $215 million in financial incentives at the airport between now and 2020 if it moves its headquarters out of Minnesota. Meanwhile, U.S. Rep. Jim Oberstar, D-Minn., has made clear his opposition to airline consolidation, saying last month, "We did not deregulate aviation in 1978 to create consolidation of the industry, but rather to expand competition."

One of the biggest factors driving renewed talk of consolidation has been the sharp increase in fuel prices, among the industry's biggest costs. Jet fuel costs have surged along with the price of oil.

The clock is ticking to get any deals accomplished quickly, some observers say. That's because industry observers believe a combination has a better chance of surmounting the considerable political and regulatory hurdles under the current administration than under President Bush's successor.

United CEO Glenn Tilton told analysts at the company's annual investors day in Chicago on Tuesday that he wouldn't predict the timing of any consolidation but "it's important that it happens for the industry to be successful."

United and Houston-based Continental Airlines Inc. are widely viewed as possible partners if consolidation goes ahead, and Tilton is believed to have made overtures about a combination long ago.

Their route networks are seen as complementary, with Chicago-based United strong in the Pacific and internationally but lacking the presence in the Atlantic and Central America of Continental, which has a hub in Newark, N.J., and multiple connections out of its home hub in Houston to Mexico and Latin America.

------

AP Business Writers Joshua Freed in Minneapolis and Dave Carpenter in Chicago contributed to this report.
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Old February 7th, 2008, 10:54 PM   #318
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Quote:
Originally Posted by hkskyline View Post
Delta, Northwest reported closer to deal
6 February 2008

ATLANTA (AP) - Delta Air Lines and Northwest Airlines are inching closer to a combination that would create the nation's largest carrier, and if a deal is reached it could be announced next week, a person briefed on the discussions told The Associated Press on Wednesday.

Delta's board of directors is expected to meet over the next several days, the person said without elaborating on the topic of the meeting.

The person, who was not authorized to talk as the negotiations entered a sensitive stage and asked not to be named, said one point of contention has been what Northwest Chief Executive Doug Steenland's role would be at the combined company.

Delta has a growing presence across the Atlantic and a strong hub in Atlanta, home to the world's busiest airport. Northwest has strong routes across the Pacific and its main hub is in Minneapolis.

It wasn't clear if other issues like the combined company's name, its headquarters location and labor issues had been fully resolved, but management structure with few exceptions had, the person said.

Atlanta-based Delta Air Lines Inc. has said repeatedly that if it were to combine with another carrier it would want to be in control, which could mean its CEO, Richard Anderson, remaining in his post and Delta's chairman, Daniel Carp, remaining in his.

Anderson, who was CEO of Eagan, Minn.-based Northwest Airlines Corp. when it began a drive to cut labor costs before he left in the fall of 2004, was replaced by Steenland. But Steenland actually carried out the cuts, leading to a mechanic's strike in 2005 and deep concessions forced on the other unions, which took effect last year while Northwest was in bankruptcy.

The person briefed on the discussions cautioned that things could change since Delta also has been talking to Chicago-based UAL Corp.'s United Airlines about a combination, and there have been reports that other carriers have been talking among themselves about possible deals.

A Delta spokeswoman said she could not comment beyond the airline's past statements that it its reviewing its strategic options, including a possible combination transaction. A spokeswoman for Northwest declined to comment. A United spokeswoman declined to comment.

Minnesota Gov. Tim Pawlenty has pointed out that Northwest has made financial commitments to keep its headquarters and a hub in Minnesota. Northwest would give up $215 million in financial incentives at the airport between now and 2020 if it moves its headquarters out of Minnesota. Meanwhile, U.S. Rep. Jim Oberstar, D-Minn., has made clear his opposition to airline consolidation, saying last month, "We did not deregulate aviation in 1978 to create consolidation of the industry, but rather to expand competition."

One of the biggest factors driving renewed talk of consolidation has been the sharp increase in fuel prices, among the industry's biggest costs. Jet fuel costs have surged along with the price of oil.

The clock is ticking to get any deals accomplished quickly, some observers say. That's because industry observers believe a combination has a better chance of surmounting the considerable political and regulatory hurdles under the current administration than under President Bush's successor.

United CEO Glenn Tilton told analysts at the company's annual investors day in Chicago on Tuesday that he wouldn't predict the timing of any consolidation but "it's important that it happens for the industry to be successful."

United and Houston-based Continental Airlines Inc. are widely viewed as possible partners if consolidation goes ahead, and Tilton is believed to have made overtures about a combination long ago.

Their route networks are seen as complementary, with Chicago-based United strong in the Pacific and internationally but lacking the presence in the Atlantic and Central America of Continental, which has a hub in Newark, N.J., and multiple connections out of its home hub in Houston to Mexico and Latin America.

------

AP Business Writers Joshua Freed in Minneapolis and Dave Carpenter in Chicago contributed to this report.
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Old February 8th, 2008, 05:46 AM   #319
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Why some question Steenland's role if Delta and Northwest join
7 February 2008

MINNEAPOLIS (AP) - Doug Steenland led Northwest Airlines through wrenching changes including a strike and bankruptcy, some of the toughest years in the airline's 82-year history. That may be one reason his role in a joined Delta and Northwest has been reported as a hang-up in talks between the two airlines.

To understand why, go back to Oct. 1, 2004.

Northwest CEO Richard Anderson had been pressuring workers for pay cuts during the airline downturn that began after Sept. 11, 2001. But on Oct. 1, Anderson left Northwest to take an executive job at UnitedHealth Group, bailing out of a struggling airline for a health insurance giant and Wall Street darling. He later got the CEO's job at Delta Air Lines Inc.

While Anderson was moving up at UnitedHealth, 2005 was getting uglier for Northwest. With fuel prices continuing to rise, Steenland ratcheted up the labor concessions he said were needed to avoid bankruptcy. Instead, mechanics struck in August. Northwest went into Chapter 11 in September 2005 when fuel prices spiked after Hurricane Katrina. Its three other unions took it to the brink of strikes in 2006 before agreeing to pay cuts that Northwest could demand in bankruptcy court.

Thousands of the striking mechanics lost their jobs when Northwest hired permanent replacements. Pilots started holding rallies with an inflatable rat clutching two bags of money to protest corporate greed.
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Old February 8th, 2008, 02:45 PM   #320
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Detroit News says it's almost a done deal with Northwest's CEO taking over, the HQ being moved to Atlanta, and the Northwest name being scrapped for Delta. They also had the comment from the Minnesota House Democrat, but said that Congress protests would be meaningless if GWB's regulators likely approved the merger. They predicted Detroit's hub would be stable or possibly gain through the merger, but didn't comment on the other hubs.

I think Cincinnati will likely be a big loser. If you draw a triangle from Memphis to Detroit to Atlanta, Cincinnati sits inside it, and none of those cities are more than a thousand miles apart. Once you add all the cost concerns, Cincinnati's hub is likely to lose flights, though they're not going to admit to that right away. People also suspect Memphis will lose out as well.
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