Delta eyeing American Airlines in takeover bid

[flightsimfred]

It has been reported that Delta Airlines has a fund equity firm to draw a plan to purchase bankrupt American Airlines. I am sure the regulators will be looking at this if it ever gets off the ground.
Stay tuned for further updates.

[torkermax]

In the end there will be 3 US carriers.

[flightsimfred]

So much for government deregulation. Boy what a joke that was. Breakup AT&T and other local phone companies to further completion and look what we have today. Breakup the large airlines to further competition and look what we have today. Most of the air carrier went out of business. Remember TWA, North Central, Pan Am. So now we can't get from point A to point B any longer without flying. And we we do fly, it's in crowded conditions on fewer flights to fewer destinations. Isn't progress wonderful? Once again, the government doesn't create jobs or boost the economy, it just screws things up with it's often ridiculous rules and regs.

[ReggieF5421]

There is at least one other probable company in the 'hunt' for AA - TPG or Texas Pacific Group - a private equity fund. They've had some airline success in the past and have close ties to members of the AA Board of Directors and top management.

The DAL bid is based on an expectation that AA will shut down American Eagle, keeping only Executive Airlines operating American Eagle turboprop service in the Bahamas and Caribbean. AE jet service will be bid out to companies like Mesa and Skywest.

Also that AA will abandon their Pacific routes and cut back on the Atlantic routes/ gateways.

Estimates are that the bankruptcy will reduce AA by 30 to 40 % in size.

What a reduced AA would give DAL is a hub presence at Chicago O'Hare, a major presence in South America and DFW as a hub.

They would probably have to sell off/ divest the JFK and La Guardia traffic/ slots.

The DAL interest is for a possible post-bankruptcy merger, buyout.

The TPG interest is a revision of the bankruptcy - to takeover the airline as debtor in possession, arguing that the airline does not have sufficient cash to complete the Chapter 11 on their own. Also I've seen reports in Dallas that TPG has apparently acquired a lot of AMR stock for pennies and will promote returning some small equity to the stockholders of AMR. Though that might not be possible. Some analysts say the TPG plan is the backup plan setup by the AMR board and senior management to preserve their positions at the helm of the airline.

Because we all know that the AA senior management would be show the door even more quickly than the NWA senior management.

[davidjones]

So much for government deregulation. Boy what a joke that was. Breakup AT&T and other local phone companies to further completion and look what we have today. Breakup the large airlines to further competition and look what we have today. Most of the air carrier went out of business. Remember TWA, North Central, Pan Am. So now we can't get from point A to point B any longer without flying. And we we do fly, it's in crowded conditions on fewer flights to fewer destinations. Isn't progress wonderful? Once again, the government doesn't create jobs or boost the economy, it just screws things up with it's often ridiculous rules and regs.

Actually the carriers lobbied strongly to be deregulated - then the big ones ate the little ones... don't blame the government for this one. Same thing with the communications boys - they wanted to get into the computer business and the only way they could avoid anti-trust laws was to break up.

DJ

[Raptor22]

I would've thought that American would buy Delta, How the Mighty have fallen!

[flightsimfred]

To davidjones: true the big boys did push for deregulation but after the idea was placed in their corporate heads by both lobbyists and members of the commerce committee in their public statements. Maybe it was both parties involved, you know how that goes: Congress has to play nice with the large campaign contributors who just happened to be large corporations and other players. The bottom line is that we are progressing back to the pre-regulation days just look at the airline industry; the cell phone communication industry--AT&T wanted to absorb T-Mobile--the cable television industry. Don't misunderstand me, I am not opposed to capitalism and large corporations. They have made America great, but the folly of deregulation and the return to "bigness" The begs the question: Are we better off in 2012 than we were in 1984 at the start of government deregulation of various industries?

[davidjones]

To davidjones: true the big boys did push for deregulation but after the idea was placed in their corporate heads by both lobbyists and members of the commerce committee in their public statements. Maybe it was both parties involved, you know how that goes: Congress has to play nice with the large campaign contributors who just happened to be large corporations and other players. The bottom line is that we are progressing back to the pre-regulation days just look at the airline industry; the cell phone communication industry--AT&T wanted to absorb T-Mobile--the cable television industry. Don't misunderstand me, I am not opposed to capitalism and large corporations. They have made America great, but the folly of deregulation and the return to "bigness" The begs the question: Are we better off in 2012 than we were in 1984 at the start of government deregulation of various industries?

I'm a denizen of the Washington area and I do know how it goes - been there, done that. Actually, I was not a fan of deregulation; having read the history of the airlines it was pretty obvious what would happen after deregulation and it did. I've never understood why anyone with any economic sense would start an airline unless they had a sugar daddy with limitless funds. Maybe just the joy of having all those airplanes? One thing that should be considered when comparing unregulated, laissez faire, capitalism vs. our more regulated version is that history has given us a set of good reasons for the various rules we have today.

DJ