This story attracted my attention because I am getting ready to flow from East Coast to West on US Airways next Monday. US Airways is looking to purchase Delta Airlines, which is bankrupt, for $8 billion in cash and stock. Any merger won’t affect my flight, although it would be nice if the airline lift the requirement of purchasing a meal if I want to eat on a six-hour flight. I guess I’ve been spoiled with free food in the past.
For me, an airline merger might make it more difficult to find inexpensive flights. I generally fly only twice a year, but New York or Philadelphia to California seems to be one of the more expensive routes.
Here’s the full announcement about the possible merger, sent to USAir Dividend Miles members, in addition to some links. They’re very friendly.
* US Airways Press Release
* Article from New York Times DealBook
* Article from Bloomberg News
The letter I received follows.
Dear Dividend Miles Member,
By now you may have heard that US Airways has made a proposal to merge with Delta Air Lines. Over the coming days there will certainly be much discussion in the media about this proposal, and in advance of that I’d like to make clear our company’s motivation for initiating this process and explain how we believe it would provide enormous benefits for you, one of our frequent flyers.
The merger of America West and US Airways has provided us with a sound platform to grow our business and provide additional opportunities for our customers. We believe a merger with Delta is the right type of opportunity that can positively benefit all of our stakeholders – customers, employees, and investors. The combination will provide an even stronger base from which the merged airline can compete with other domestic and international airlines.
For you, our customer, there will be benefits similar to what you’ve already experienced with the new US Airways:
* A much larger network of routes and frequencies to simplify your travel
* A history of reducing fares and eliminating unfriendly fare rules like Saturday-night stays
* A global frequent flyer program that would combine your Dividend Miles and Delta SkyMiles balances
* Participation in one of the world’s largest airline alliances, opening up even more of the world for your travel
* Peace of mind that you are building a travel rewards investment in a company that will be here for the long term, and that your miles will be here when you’re ready to redeem them
Of course, we don’t overlook the operational challenges inherent with this kind of transaction. Using our experience with the America West/US Airways merger we will work hard to mitigate transition difficulties, particularly with technology online and at the airports. In the short term we know there will be challenges, but in the long run you will be the beneficiary of one of the largest, most convenient airline networks in the United States, designed to make travel as efficient, economical, reliable and comfortable as possible.
This process will undoubtedly take some time to reach its conclusion, but please be assured that in the meantime our current integration processes are moving full speed ahead, including moving to one reservations system scheduled for early second quarter 2007. In addition, should this transaction fail to materialize, please be assured that the new US Airways is in a very good position, competitively and financially, to continue to build the best full-service, low-fare airline in the world.
Thank you again for your support of US Airways. We look forward to the opportunity to serve you again soon.
Sincerely,
Scott Kirby
President
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Is it just me, or does $8 billion dollars sound like nothing in relation to the industry they’re in? Isn’t that, like, the cost of 20 planes, 100 employees and and 312 lawyers to handle the sexual harassment suits from stewardesses and F.W.I. charges against drunken pilots?
$8 billion is barely more than what Rupert Murdoch thinks MySpace is worth.