Wed, Feb 27, 2008
Delay Leads To Lower Share Prices
We're now seeing one reason Delta
and Northwest felt some urgency to get a merger done once the
rumors started. Both airlines have seen their stock prices hit this
week after unions have hinted they'll balk at combining the
workforces.
"People are getting a little nervous about a potential merger,"
Calyon Securities analyst Ray Neidl told Reuters. "The longer this
thing drags out the less likely it's going to happen this
year."
The economic factors driving the merger include the perceived
need within the US airline industry to eliminate duplication in
routes and services to counter rising fuel prices. The way to save
money in a merger is to consolidate lightly-traveled routes, and
eliminate job positions, and there's no getting around it -- that
means fewer employees.
Reuters says Delta and Northwest have told employees they want
to grow the airline, not cut jobs. The unions aren't buying it.
Early reports that both groups of pilots had agreed to a new
seniority system for combining workforces proved premature... and
David Stempler, president of the Air Travelers Association, isn't
surprised. "Whoever thought that airline pilots would agree on
something as important as seniority integration in a short period
of time was quite mistaken," he said.
Now, the International Association of Machinists, which
represents over 12,000 bag handlers, customer service
representatives and reservation agents at Northwest, said a merger
will mean substantial job losses and service cuts. The union says
it will oppose any big airline mergers, including Northwest and
Delta.
Analysts say a merger needs to start soon, or it may not happen
at all this year.
More News
Aero Linx: International Flying Farmers IFF is a not-for-profit organization started in 1944 by farmers who were also private pilots. We have members all across the United States a>[...]
From 2017 (YouTube Version): Remembrances Of An Israeli Air Force Test Pilot Early in 2016, ANN contributor Maxine Scheer traveled to Israel, where she had the opportunity to sit d>[...]
"We renegotiated what our debt restructuring is on a lot of our debts, mostly with the family. Those debts are going to be converted into equity..." Source: Excerpts from a short v>[...]
Also: B-29 Superfortress Reunion, FAA Wants Controllers, Spirit Airlines Pulls Back, Gogo Galileo Van's Aircraft posted a short video recapping the goings-on around their reorganiz>[...]
Chart Supplement US A flight information publication designed for use with appropriate IFR or VFR charts which contains data on all airports, seaplane bases, and heliports open to >[...]