US Airways' Parker Says Delta Bid, Deadline Are Firm
After a nightmarish ride through bankruptcy and the threats of corporate murder-suicide, Delta Air Lines is poised to emerge from Chapter 11 limbo. And that, says CNBC's Phil LeBeau, may spell "the last stand of Doug Parker."
Parker, the CEO of US Airways Group, has been pushing for a merger with Delta, taking his case directly to shareholders of the beleaguered Atlanta-based carrier. US Airways itself is a hybrid borne of two other once-bankrupt airlines,America West Holdings and the original US Airways -- and former AmWest leader Parker sees his future in terms of consolidation.
Delta CEO Gerald Grinstein rebuffed Parker's $8 billion November bid, and the 20% sweeter offer made on Jan. 10. Maybe Delta CFO Ed Bastian didn't like the fundamentals; maybe there was a culture clash -- after all, Delta is almost as much an Atlanta icon as Coca-Cola. (Grinstein also nixed rumors of a hookup with Northwest Airtlines.) But perhaps it's about having survived the journey that pitted Grinstein and his team against the most white-collar of union members -- pilots -- as executives desperately sought deeper cost savings, and the fliers fought against even more sacrifices after having agreed to $1 billion in wage and benefit cuts.
Thus, LeBeau notes, Grinstein "galvanized employees" when he warned them that a hostile takeover could mean massive job losses. He took his campaign to the Georgia statehouse in December, hoping to raise awareness of the stakes involved. GOP legislators, traditionally taking a hands-off stance when it comes to business and labor, vowed to help by supporting a cap on fuel taxes. And both Grinstein and Bastian appealed to creditors, attempting to convince them of the superior value of Delta's hard-fought exit plan.
And now the decision "is in [the creditor committee's] court," Parker declared. US Airways' bid is carved in stone -- and so is the Feb. 1 deadline for Delta's creditors to respond, the US Airways CEO said on Tuesday. But as the deadline approaches, will bidding fever take hold -- and spur Parker to up the ante? On a conference call with analysts and the press, Parker commented that, "There's been speculation from an agitated group of [Delta] bond-holders. We are not commenting on that speculation."