Delta not keen on US Airways' merger proposal
16 Nov 2006
Delta Air Lines has responded to the rival US Airways proposed $8-billion merger proposal, saying that it planned to come out of the bankruptcy protection next year as a "strong, stand-alone carrier." Under the terms of the proposed deal, both airlines would combine once Delta emerged from bankruptcy protection in February.
The cash and stock offer would give Delta's unsecured creditors $4bn in cash and 78.5 million shares of US Airways stock.
However, Delta's chief executive Gerald Grinstein, "We received a letter from US Airways this morning and will, of course, review it." Delta has said it would study the details of the proposal before responding.
The 'New' Delta, as proposed by US Airways' CEO W Douglas Parker would serve more than 350 destinations across five continents and be the biggest carrier across the Atlantic.
"The combined company would be the number one airline at 155 airports. The New Delta would also be uniquely positioned to compete with low cost and legacy carriers," Parker argued persuasively to convince his counterpart at Delta.
US Airways said it hoped the combined airline would generate annual synergies of at least $1.65 billion.
In December 2005, Delta's pilots voted a 14 per cent pay cut to help the beleaguered airline stay afloat
