Airline Finance News - North America

AirGuide Business, May 5, 2008

Continental Airlines, United Airlines

Continental is also in advanced talks with United Airlines for a full merger, the sources said. Continental will choose either the merger or the alliance, not both, sources said. Meanwhile, United Airlines is also in serious merger talks with US Airways, and will choose to merge with either Continental or US Airways soon, the people said. Apr 28, 2008

Delta Air Lines, Northwest Airlines

Experts point to different ways to value Delta-Northwest deal. There are several ways to estimate the value of the proposed merger of Delta Air Lines and Northwest Airlines, experts say. Some calculate the deal's market capitalization at $6.2 billion, based on current share prices. Others judge the value of the combination at $17.7 billion based on the deal's enterprise value, which is based on the theory that the acquiring company assumes debt and keeps cash accounts. Investment bankers use yet another method to place value on such transactions. May 2, 2008

Delta Air Lines, Northwest Airlines

Experts point to different ways to value Delta-Northwest deal. There are several ways to estimate the value of the proposed merger of Delta Air Lines and Northwest Airlines, experts say. The deal's market capitalization is $6.2 billion, based on current share prices. The value of the combined company is $17.7 billion based on the deal's enterprise value, which is based on the theory that the acquiring company assumes debt and keeps cash accounts. May 2, 2008

Delta Air Lines, Northwest Airlines

Delta pilots start voting on contract Delta Air Lines will start voting today on a contract that would give management more flexibility to complete a merger with Northwest Airlines. The pilots would get pay raises and an equity stake under the contract. Meanwhile, some industry observers say unions could be ousted if the two airlines merge. May 1, 2008

Delta Air Lines, Northwest Airlines

One benefit of the proposed merger of Delta Air Lines and Northwest Airlines may be the opportunity to cut costs by combining their 1,000 or so planes into one fleet and retiring the oldest aircraft. The airlines' executives contend that this mammoth fleet will be able to deliver on the promise of a single U.S. carrier capable of connecting the world. But all those 1,097 aircraft could be a mammoth headache to manage, as well. May 1, 2008

Delta Air Lines, Northwest Airlines

Renewed interest in airline mergers may benefit air carriers but increase short-term risk to their ratings, Moody's Investors Service said on Thursday. The recently announced merger between Delta Air Lines and Northwest Airlines is the first combination between two legacy airlines with large, complex route networks and substantial union work forces, Moody's said in a report. "Airline consolidation has proven to be challenging, even under favorable economic conditions," Moody's senior analyst George Godlin said in the report. While consolidation holds the potential for many benefits, such as pricing power and a larger combined route network, consolidation "could adversely affect ratings in the near term," Moody's said. Challenging labor relations and difficulties in combining fleets and route networks could make it difficult for airlines to reap benefits of consolidation, Moody's said. Meanwhile, high fuel prices, a weak economy and consumer resistance to fare increases will contribute to industry losses in 2008, Moody's said. May 1, 2008