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US Airways eyes $8bn Delta merger | US Airways eyes $8bn Delta merger |
(about 3 hours later) | |
US Airways has made a $8bn (£4.2bn) offer to merge with rival Delta Air Lines, in a deal that would create one of the world's largest airlines. | US Airways has made a $8bn (£4.2bn) offer to merge with rival Delta Air Lines, in a deal that would create one of the world's largest airlines. |
Under the terms of the deal, both airlines would combine once Delta emerged from bankruptcy protection. | Under the terms of the deal, both airlines would combine once Delta emerged from bankruptcy protection. |
The cash and stock offer would give Delta's unsecured creditors $4bn in cash and 78.5 million shares of US Airways stock. | The cash and stock offer would give Delta's unsecured creditors $4bn in cash and 78.5 million shares of US Airways stock. |
If the deal goes ahead, the airline will operate under the Delta name. | If the deal goes ahead, the airline will operate under the Delta name. |
Pay cuts | Pay cuts |
News of the bid led to sharp rises in both companies' share prices. | |
It would serve more than 350 destinations across five continents, and, according to US Airways, be the biggest carrier across the Atlantic. | |
US Airways recently joined forces with American West | US Airways recently joined forces with American West |
US Airways said it hoped the combined airline would generate annual synergies of at least $1.65bn. | US Airways said it hoped the combined airline would generate annual synergies of at least $1.65bn. |
The deal would lead to a 10% cut in the overall capacity of both airlines, and reduce the number of unprofitable flights, US Airways said. | The deal would lead to a 10% cut in the overall capacity of both airlines, and reduce the number of unprofitable flights, US Airways said. |
Delta Air Lines filed for Chapter 11 bankruptcy protection in September last year, amid high fuel prices and cut-throat competition. | Delta Air Lines filed for Chapter 11 bankruptcy protection in September last year, amid high fuel prices and cut-throat competition. |
In December, pilots at Delta voted to approve a 14% pay cut to help keep the firm trading. | In December, pilots at Delta voted to approve a 14% pay cut to help keep the firm trading. |
US Airways was itself formed from the merger last year of the struggling airline of the same name and smaller rival American West. | US Airways was itself formed from the merger last year of the struggling airline of the same name and smaller rival American West. |