If It Was Civil Before, It Ain't Anymore
One day after Delta Air Lines
submitted its reorganization plan to the US Bankruptcy Court -- and
let it be known, in no uncertain terms, that it feels a merger with
US Airways is a bad idea -- US Airways CEO Doug Parker
says he refuses to back down on the hostile takeover bid.
"We remain a disciplined and determined bidder for Delta,"
Parker's response came after Delta CEO Gerald Grinstein told
investors via a conference call that, for the moment, Delta has no
intentions to merge its airline with anyone... least of all, US
Airways Group (USAG).
"A prescription for disaster," is how Grinstein put it. "US
Airways is the worst of all potential merger partners," adding
USAG's bid was based on "flawed economic assumptions."
Grinstein also said a merger of the nation's
third-and-fifth-largest airlines would never clear anti-trust
hurdles, it would leave the combined carrier with too much debt,
and with too many unsolved labor issues -- especially, Grinstein
implied, from the US Airways side.
Delta's board of directors also rejected the merger proposal
USAG presented two weeks ago.
As Aero-News reported
Tuesday, Delta's reorganization plan says the
airline's value is between $9.4 billion and $12 billion. Even if
the latter valuation is a tad optimistic -- as some analysts have
suggested -- that's still at least a billion higher than USAG's
It is up to Delta's creditors to decide which offer is best for
their interests -- Delta's plan, or USAG's offer. And now that
Delta has showed its hand by stating a value, it's entirely
possible US Airways will up its bid.
"...[W]e have always expected that Delta would submit a
stand-alone plan," Parker told the Pittsburgh Post-Gazette, adding
Delta's creditors now have a "benchmark against which to evaluate
the competing proposals and we welcome that comparison. This is an
important step in a process that we believe will result in the
merger of US Airways and Delta."
In any case, the unfolding drama over US Airways' takeover bid
for Delta, filed November 15, is proving
the ancient adage -- some say curse -- "may you live in interesting
It "is quite exciting," said airline consultant Darryl Jenkins.
"Certainly, Parker is not going to give up. Parker is a very driven
young man" and "not one that shirks from a fight."
As for Grinstein, Jenkins says he is "a tough old bird. ... He
is not going to let some young snot-nose tell him what to do with
We've got ourselves a dogfight, folks...