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The Honolulu Advertiser
Posted on: Wednesday, November 22, 2006

US Airways appeals to staff over bid to take over Delta

By HARRY R. WEBER
Associated Press

ATLANTA — US Airways Group Inc. yesterday sought to win employee support for its $8.8 billion bid to take over Delta Air Lines Inc. and crush Delta's hopes of emerging from bankruptcy as a stand-alone carrier.

"Our proposal is just better. For everyone," the Tempe, Ariz.-based company said in a bluntly worded newsletter sent to employees.

The newsletter, which resembled a flier, added, "We don't believe that Delta's claim that their stand-alone plan will somehow provide more value holds water."

But US Airways faces skepticism over the deal from some of its own employees. More than 200 of the pilots belonging to the Air Line Pilots Association picketed at Phoenix Sky Harbor International Airport on Thursday, demanding the airline finish contract negotiations with them before it moves to acquire rival Delta.

The publication also comes as Atlanta-based Delta has stepped up its keep-Delta-on-its-own campaign in recent days with a full-page newspaper ad, media interviews granted by its chief financial officer and an e-mail to frequent fliers in which it seemed dismissive of US Airways' unsolicited offer.

No other bids for Delta have been made by other airlines since US Airways' offer, Delta CFO Ed Bastian said Tuesday during a stop in New Orleans.

Bastian also said the reason the US Airways proposal has attracted so much attention "is because it's not been compared with anything, but we feel our plan will be much more satisfying for our community."

Delta, which has been in bankruptcy since September 2005, plans to file its reorganization plan next month.

In an interview with The Associated Press on Friday, Bastian said Delta is telling creditors that it believes its stand-alone plan is "far superior" to US Airways' hostile bid issued last Wednesday to buy the company and create the nation's largest carrier. Delta, which has been in bankruptcy since September 2005, plans to file its reorganization plan next month.

On Monday, Delta ran a full-page ad in its hometown newspaper reiterating its desire to keep flying solo. That night the company sent an e-mail to frequent fliers telling them it is concerned that the US Airways offer "would not be in the best interest of our many stakeholders including our customers, employees, travel partners, and the communities we serve."

US Airways is still trying to set up a formal meeting with Delta's creditors, spokesman Phil Gee said Tuesday. Adding to the uncertainty surrounding the deal, Gee said the airline still has not decided where a combined US Airways-Delta would be based. Regulatory hurdles also would not to be overcome.

US Airways said in its newsletter to employees yesterday that the real question people should be asking is what provides the most value to Delta's creditors.

"Delta's stand-alone plan — no matter how good it may be — cannot possibly offer an expanded route network, more destinations and a better frequent flier program," US Airways said.