Delta meets US Air, but plans no merger

Source: Economic Times

Saturday, December 2nd

NEW YORK: Delta Air Lines said it listened to a presentation by US Airways Group on US Airways’ $8.5 billion takeover offer for Delta, but repeated earlier statements that it intends to emerge from bankruptcy as a stand-alone carrier. US Airways, which pitched its plan to Delta’s senior management and creditor committee representatives on Thursday, said in a separate statement that it was pleased to have had the chance to discuss its proposal. It was US Airways’ first opportunity to speak directly to Delta’s official committee of unsecured creditors since launching its offer on November 15. It was not clear whether the parties would meet again to take US Airways’ unsolicited bid for its larger rival further. Delta was legally obliged to review the bid. “While we will fulfil this obligation, we will, as we have stated, continue to progress toward filing our stand-alone plan by the end of the year, which would have us emerge from bankruptcy as a highly competitive, independent and financially sound airline by mid-2007,”

Delta said after the meeting. Atlanta-based Delta has been recalling pilots and flight attendants to work this year as it expands internationally and restructures operations. Its monthly loss in October narrowed year-over-year, helped by lower costs. Delta’s pilots’ union, represented on the creditor committee, has expressed concerns about the offer. US Airways has argued that a combined airline would have more benefits than a stand-alone Delta. “We are confident that our proposal for a ‘new’ Delta will create more value than a stand-alone plan,” said US Airways CEO Doug Parker, in a statement after the meeting. US Airways has won some backing for its plan from Delta bondholders. An ad hoc group of bondholders, organised last week, aims to put pressure on Delta to fully consider the US Airways bid, a person familiar with the matter has said. The group, which was not present at Thursday’s meeting, is planning separate meetings with Delta and US Airways, Alan Kornberg of law firm Paul, Weiss, Rifkind, Wharton & Garrison, said. The firm represents the bondholder group. Meanwhile, US airline AirTran Holdings chairman and CEO Joe Leonard said he is interested in acquiring airport gates sold by US Airways or Delta Air Lines if those carriers merge, The Wall Street Journal reported. Mr Leonard said discount carrier Air-Tran, would consider buying jettisoned shuttle operations as a way to gain access to gates at New York’s LaGuardia International Airport and Washington's Reagan National Airport.

Grass Roots Effort Off and Running

The grass roots effort to fend off US Air's hostile bid for Delta Air Lines is off and running. Thousands of Delta Employees worldwide can be seen wearing their "Keep Delta My Delta" buttons and wrist bands, but it doesn't stop there. Soon busses in Atlanta that serve as transportation from Hartsfield International Airport will also express the company's desire to remain a stand alone carrier as they emerge from bankruptcy early next year. While morale at Delta has been up and down since filing for Chapter 11 in September of 2005, it's clear from the overwhelming support from employee groups that the pride of Delta Air Lines is alive and well. One employee said "I will not sit by and let US Air reap the benefits for my hard work and sacrifice - not on my watch. That kind of passion has united Delta emplyoees across the board. Even Delta's pilots have been vocal in support of the company's stand alone plan.

The two sides were at odds earlier this year over Delta's effort to implement a second round of pay cuts but US Airways' $8.9 billion bid to buy Delta has put Delta management and its pilots union on the same side again in opposing the unsolicited offer. "We have a common threat from outside Delta Air Lines," the chairman of the pilots union's executive committee, Lee Moak, said Wednesday. Moak told fellow pilots in a memo Tuesday that "should this merger be as misguided and as poor an idea as I currently believe it to be, then I will deploy every available resource to stop it."

Today Delta reported that it narrowed its loss in October to $88 million which equates to 45 cents a share in the 31-day period and was smaller than its loss of $301 million for the same month last year. Excluding reorganization items, Delta said its latest loss was $64 million and shows further evidence that their plan is working.

Source: Delta Air Lines, Inc.

Statement on Behalf of Delta Air Lines Following Presentation by US Airways
ATLANTA, Nov. 30, 2006 (PRIME NEWSWIRE) (PRIMEZONE) -- Delta Air Lines today issued the following statement:


"Consistent with our obligation to review US Airways' unsolicited proposal, today we, along with representatives of our Creditors' Committee, met to listen to US Airways' presentation concerning US Airways' proposal to merge with Delta.
"While we will fulfill this obligation, we will, as we have stated, continue to progress toward filing our stand-alone plan by the end of the year, which would have us emerge from bankruptcy as a highly competitive, independent and financially sound airline by mid-2007. Our plan is working and we have tremendous, hard-won confidence in it."

Delta Air Lines (Other OTC:DALRQ) offers customers service to more destinations than any global airline with Delta and Delta Connection carrier service to 290 destinations in 46 countries. With more than 50 new international routes added in the last year, Delta is America's fastest growing international airline and is a leader across the Atlantic with flights to 28 trans-Atlantic destinations. To Latin America and the Caribbean, Delta offers more than 400 weekly flights to 49 destinations. Delta's marketing alliances also allow customers to earn and redeem SkyMiles on more than 14,000 flights offered by SkyTeam and other partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Including its SkyTeam and worldwide codeshare partners, Delta offers flights to 445 worldwide destinations in 92 countries. Customers can check in for flights, print boarding passes and check flight status at delta.com.