Realperson
17年前
Steenland: Fuel costs may shrink merged Delta/Northwest
Northwest Airlines Corp. will keep a "vibrant" hub and a substantial number of jobs in Minneapolis-St. Paul after the airline's merger with Delta, Northwest CEO Doug Steenland told business leaders Monday.
But he warned that soaring fuel costs may ultimately mean a smaller company.
Speaking at a meeting of the St. Paul Area Chamber of Commerce, Steenland said the combined carrier will keep its reservation offices, data center and flight-training facility open following the close of the deal.
Overall, he likened the deal's impact on the Twin Cities to the 1998 merger between Minneapolis-based Norwest Corp. and San Francisco-based Wells Fargo & Co. Then, Minneapolis lost Norwest's corporate headquarters but ultimately gained jobs as Wells Fargo kept a big division there.
But with the price of oil soaring, Steenland said it's hard to predict how many workers the carrier will employ in the future.
"This can only go on so long," he said of airlines absorbing high energy prices. "Fuel costs will have to be passed on to consumers. That will mean higher fares, so we'll see demand come down, and the airline will have to shrink."
Northwest (NYSE: NWA) and Delta Air Lines (NYSE: DAL) last week began crafting a plan for integrating the carriers, Steenland said. The companies expect the merger to close by the end of the year. Northwest may operate as a standalone airline for a full year after the deal wraps up, he said.
While the combined airline's headquarters will be based in Atlanta, the merged company will continue to have a big presence in the Twin Cities. "What won't be different is that Minneapolis-St. Paul will continue to be a vibrant, robust hub," Steenland said.
The airline also will continue to support Twin Cities cultural institutions and non-profits, he said.
Based in Eagan, Minn., Northwest operates one of its three U.S. hubs at Memphis International Airport.
Minneapolis / St. Paul Business Journal
drluck
17年前
Short interest jumped in shares of airline companies
AIRTRAN HOLDINGS INC (AAI.N: Quote, Profile, Research)
DELTA AIR LINES INC (DAL.N: Quote, Profile, Research)
SOUTHWEST AIRLINES CO (LUV.N: Quote, Profile, Research)
Short interest jumped in shares of airline companies as the
companies struggled with soaring fuel prices and worries about a
weaker U.S. economy -- problems which have forced several small
airlines into bankruptcy protection and prompted others to merge.
Short interest was up more than 38 percent in AirTran, up
almost 29 percent in Delta and up over 14 percent in shares of
Southwest.
About 24.6 million AirTran shares, 24.9 million Delta shares
and 34.9 million Southwest shares were held short, representing
about 26.6 percent, 8.5 percent and 5 percent, respectively, of
each company's total shares outstanding.
http://www.reuters.com/article/marketsNews/idINN0631773420080506?rpc=44
realest
17年前
Big news IMO!
D.O.T. Proposes Approval of Northwest Airlines Application for Six Way Antitrust Immunity
Last update: 6:08 p.m. EDT April 9, 2008
EAGAN, Minn., Apr 09, 2008 (BUSINESS WIRE) -- Northwest Airlines (NWAnorthwest airls corp com
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NWA) today announced the U.S. Department of Transportation (DOT) has tentatively approved its application for six-way antitrust immunity with its SkyTeam alliance partners: Delta Air Lines, Air France, KLM Royal Dutch Airlines, Alitalia, and CSA Czech Airlines. Final approval is expected to follow after the DOT reviews the final round of comments to its "show cause" order.
Northwest already had antitrust immunity (ATI) with KLM through its 10-year-old joint venture. Delta currently has antitrust immunity with Air France, Alitalia and CSA.
The DOT's decision will enable the carriers to expand their transatlantic networks by coordinating schedules and services with a single, customer-focused objective.
Northwest Airlines President and CEO Doug Steenland said, "Today's decision by DOT is a win for our customers, employees, and the communities we serve. The expanded SkyTeam alliance activities will lead to more convenient service for our customers with shorter travel times, expanded growth opportunities for the airline which equates to more stability and job security for our own employees, and more nonstop transatlantic flight options for the communities we serve."
Today's approval follows the new U.S.-European Union Open Skies agreement that took effect on March 30, 2008, which promotes competition among rival alliances and benefits customers through enhanced service options. The ATI approval is also expected to lead to increased capacity for transatlantic flights.
Steenland praised several elected officials who helped secure the approval on behalf of the constituents they serve. "We thank U.S. Senator Norm Coleman and his colleagues Senators Klobuchar, Alexander and Corker, Governor Pawlenty, and Congressman Oberstar, for their continuous support throughout this application process. The success of these efforts will promote the availability of high quality international air service, as well as more stable employment and growth opportunities at Northwest's hubs in Minnesota, Tennessee and Michigan," said Steenland.
Steenland also thanked the labor groups who filed pleadings in support of the antitrust immunity application with the DOT, including the Northwest chapters of the Air Line Pilots Association, the Association of Flight Attendants, the International Association of Machinists and Aerospace Workers and the Transport Workers Union.
Gaining ATI approval was a critical component for Northwest's current international service offerings, including the new nonstop service launched yesterday between Minneapolis/St. Paul and Paris. ATI will now allow for closer cooperation with Air France/KLM for the Paris service. Northwest's new service to London's Heathrow airport from Minneapolis/St. Paul, Detroit and Seattle was also dependent on its cooperative arrangement with KLM, which the expanded alliance will further strengthen.
Northwest Airlines is one of the world's largest airlines with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1,000 cities in excess of 160 countries on six continents.
SOURCE: Northwest Airlines
Northwest Airlines
Copyright Business Wire 2008
stokednvegas
18年前
I think they'll need a parachute.
I'ld buy in at 9.99 a share only, and sell at 12 if it could hold it during the " busy holiday season".
------->This just in:
MINNEAPOLIS (AP) - The lead lawyers in the Northwest Airlines bankruptcy case are asking for a $3.5 million bonus for shepherding the airline through Chapter 11.
The firm of Cadwalader, Wickersham & Taft LLP in New York called the bonus a "fee enhancement" in a court filing this week, saying it deserves the extra money because unsecured creditors will get back an average of 74 percent of their claims, more than in other recent airline bankruptcies.
The firm, "as the leader of the Northwest bankruptcy legal team, was a critical player in the achievement of these extraordinary results," it wrote in its filing.
The requested bonus works out to about 10 percent of the $35.4 million Cadwalader has billed for Northwest's Chapter 11 case.
Lead attorney Bruce Zirinsky alone charged from $800 to $850 per hour, for more than $3.3 million over almost 4,100 hours, according to the filing.
Northwest filed for bankruptcy protection on Sept. 14, 2005, and emerged on May 31. Some of the final attorney's bills have been filed in recent days.
One of them came from attorneys for the Air Line Pilots Association, which waged a monthslong fight with Northwest over the pay cuts and other concessions. It asked for $1.6 million in fees and expenses, including $859,822 for the union's lead attorneys, Cohen, Weiss and Simon LLP, with the rest going to consultants.
In a court filing, union attorney Richard M. Seltzer said the recent Delta Air Lines Inc. bankruptcy supports his request. In that case, Delta agreed to reimburse the union with cash and credit for pay losses up to $8 million, in addition to paying the union's financial advisers, according to the filing.
It also pointed out that an Ad Hoc Committee of Equity Holders was awarded almost $4 million for professional fees after it fought with Northwest in the courtroom over whether shareholders should receive anything in the reorganization.
Ultimately, any money paid to attorneys reduces what's left for creditors.
Lynn LoPucki, a law professor at UCLA and an expert on bankruptcy fees, said judges generally approve 99 percent of requested payments for attorneys and experts hired by bankrupt publicly traded companies. He said that's because attorneys steer their companies toward filing bankruptcy cases in jurisdictions where judges have a reputation for not raising too many questions about fees.
"Within the range of reason, the courts are under tremendous pressure to say 'Yes,"' he said. "If they don't, they and their colleagues don't get any more big cases." And that would mean a loss of prestige for the courts and less bankruptcy business for local attorneys, he said.
"The court can't afford to have a reputation for not being a good place to go for these lawyers," he said.
However, he said requests for legal fees by third parties, such as the pilot's union, are paid only about half of the time because those attorneys don't control where the case is filed.
Douglas Baird, bankruptcy expert at University of Chicago law school, said extra payments for attorneys aren't so bad if they're disclosed at the start of the process.
"On the other hand, it shouldn't be a tip," he said. "It's other people's money."
In the Enron bankruptcy, turnaround expert Stephen Cooper was awarded a $12.5 million "success fee" for leading the remnants of the company after it imploded. Cooper originally asked for $25 million but reduced the request after some parties objected.
Copyright 2007 The Associated Press
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