US Airways to Delta: Im in UR airport flyin UR planez

US Airways Group Inc.’s unveiled an $8 billion hostile bid for bankrupt Delta Air Lines Inc. this morning. Blah, blah, blah. What you need to know: US Airways CEO Doug Parker announced his intent to buy Delta with a snippy 5-page “Dear Jerry:” letter.

Dear Jerry:

Last Spring we had a conversation about a potential merger of US Airways and Delta. As you know, following that conversation, I sent you a letter on September 29, 2006, outlining our thoughts about a transaction… proposing to meet with you and your team to work together to further consider and develop our proposal. I was disappointed that you declined to meet or even enter into discussions in your letter of October 17, 2006. Because the benefits of a merger of US Airways and Delta are so compelling to both of our companies’ stakeholders, we believe it is important to inform them about our proposal. Therefore, we are simultaneously releasing this letter to the public.

Our translation:

“Dear Jerry:

I have 8 billion dollars; you need to return my calls. I’m taking back my black T-shirt. Go fuck yourself with a packet of airline pretzels that you bought on credit you low-life.

P.S. I’m keeping the dog.”

What does this hostile takeover mean to you? “If the deal is completed, the airline would operate under the Delta name and serve more than 350 destinations across five continents.” The stock market is in favor of the deal, US Airways stock jumped “$2.90, or almost 6 percent, to $53.83 in morning trading on the New York Stock Exchange.”—MEGHANN MARCO

TEXT-Letter from US Air CEO to Delta on takeover [Reuters]
US Airways makes an $8 billion hostile bid for Delta [Boston Globe]

Comments

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  1. What does this hostile takeover mean to you?

    Delta’s service gets (even) worse, our hundreds of thousands of SkyMiles get deep-sixed, and hundreds of Delta flights over the eastern seaboard get axed, meaning that there will be fewer time choices to and from the same destinations.

    Also, U.S. Airways will get a decent economy-minded widebody fleet.

    Gee, I can’t wait for this one; more consolidation, less choice. From what I’ve heard, U.S. Airways has horrible on-time performance and worse service.

  2. schvitzatura says:

    Who’da thunk the bastard child of Allegheny Airlines and Piedmont would have bested their Atlanta-based southern cousins!

    New Rule: He who goes into aviation bankruptcy reorg the most times, wins the game!

  3. Pelagius says:

    Wait a second. Wasn’t US Airways just in (still in) bankruptcy itself?

    Great. Now I can look forward to so many more opportunities for my luggage to be lost.

  4. The Unicorn says:

    Am I the only one who doesn’t get the headline? It seems like it’s a reference to something, but apparently I’m not cool enough to know what it is…

  5. Nancy Sin says:

    US Airways is the WORST. I was a victim of a day-before-thanksgiving sickout two years ago. It was hands-down the most horrendous airline experience I’d ever had.


    Delta, let’s talk about this. US Airways has a bad reputation and is only going to drag you down with it. You deserve better, baby.

  6. The Unicorn: Internet meme. Dumb explanation here

  7. Bluefreak says:

    This just adds to the merger confusion. Today’s US Airways is really America West, which acquired US Airways cheaply because of its bankruptcy but took on the US Airways name (almost all of the current senior executives were from America West, not US Airways). If this manages to go through, they will take on the Delta name, meaning that US Airways, which already went away once except in name, will go away again for good.

    I think your Delta SkyMiles are safe–they would probably end up pooled with US Airways Dividend Miles, the same way that America West and US Airways miles were pooled together during the first merger. I think the only place where you’ll see reductions in service is where there is significant overlap–DCA and LGA immediately come to mind. After all, they have to do something with all of their planes. Less competition probably does mean higher fares, however.

    And everyone’s comments are exactly why the new airline would take on Delta’s name–not that Delta has a sterling reputation, but it is definitely better than the reputation of US Airways. America West may have had a better reputation, but they took on the US Airways name because of the vastly superior name recognition of US Airways–thankfully, it appears that the America West service quality is rubbing off a little bit on the new US Airways, and not the other way around.

  8. Chairman-Meow says:

    Not bad for an airline that went bankrupt not once but twice.

    We won’t even get into the fact that a good percentage of their fleet has way too many miles on the airframes. Buy your competitors and harvest them. Heh.

  9. It looks like Bluefreak is right – Miles are treated somewhat like cash during mergers, and the combined airline would probably take Delta’s name.

    I think that given the glut of 737s and 757s, as well as the many A319/320 jets shared by the combined airline, they’d shut down many routes and probably get rid of more than a few small-to-mid-sized jets and grandfather in a bunch of Delta’s widebodies for less than the original purchase price of those jets. Delta’s got a decent 767/777 trans Atlantic fleet, which US Air doesn’t.

  10. Not only do I want your dog, but I want your name too.

  11. The Unicorn says:

    @Something Amazing –

    I *have* seen those before — I’m just an idiot. I knew it sounded familiar, but I was thinking too hard about the specific phrasing to realize what it was from.

  12. Mr. Gunn says:

    Fascinating intro to CEO speak. He uses the word synergy 14 times!

  13. Triteon says:

    No kidding, Grady. Someone needs to read Don Watson’s book.