Proposed Delta/U.S. Airways Merger

PROPOSED DELTA/U.S. AIRWAYS MERGER -- (House of Representatives - December 07, 2006)

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Mr. BISHOP of Georgia. Madam Speaker, I thank my colleague for yielding.

I rise tonight to discuss Delta Airline's tremendous progress since it entered bankruptcy in September 2005 toward its long-planned goal toward emerging in the first part of next year as a financially strong, stand-alone, independent airline.

This is a very positive story that has involved difficult decisions by Delta's management, sacrifices from its employees and strong support from its creditors, from the home State of Georgia and other communities it serves.

This is also an important story to tell tonight because U.S. Airways' unsolicited merger proposal would jeopardize the progress and saddle Delta with a huge debt that would put it at a competitive disadvantage.

On November 15, when U.S. Airways went public with this unsolicited merger proposal, Delta's CEO Gerald Grinstein wrote to Delta's 45,000 employees and said, Delta people have participated in the hard work and tough choices driving our company's already remarkable restructuring progress. I know you care deeply about what this means for our airline.

Less than a week later, Mr. Grinstein wrote again to Delta's employees to share how the outpouring of support for Delta's future as a profitable, strong, stand-alone airline and for you, the people who have been fighting hard to reach that goal, has been overwhelming.

So what is the story behind this remarkable restructuring progress since Delta entered bankruptcy in September 2005? In short, Delta has reduced costs, increased revenue, improved customer service, launched new domestic and international air services and achieved tangible progress on other major fronts.

As Business Week recently put it, Delta's senior management has worked around-the-clock renegotiating thousands of contracts, bucking up demoralized employees, imploring bankers to provide financing and wrangling with creditors to keep them from picking all the meat off Delta's bones.

To give just a few examples of Delta's tremendous progress over the last year, Delta has overhauled its vast domestic and international network, shifting as much as 20 percent of its domestic capacity and its largest aircraft to international service, all while expanding to all 50 States and serving 70 new international cities.

Delta recently announced the recall in the coming months of hundreds of furloughed employees, pilots, flight attendants, mechanics, and others. Most recently, Delta announced that it will recall another 200 pilots beyond the 130 pilots already recalled this year. Similarly, Delta recently brought back 1,250 flight attendants and 900 mechanics and maintenance workers. This brings to nearly 2,500 the number of employees recalled in just the recent months.

This week, in a move critical to its ability to emerge from bankruptcy, Delta agreed with the Pension Benefit Guaranty Corporation to terminate Delta's pension plan for its pilots. Retired Delta pilots will receive more than $800 million in allowed claims. A group representing most of Delta's retired pilots agreed not to fight this agreement. Further, and perhaps of greatest significance, at the time of this announcement Delta also reconfirmed that it will preserve its non-pilot retirement plan for 90,000 active and retired ground employees and flight attendants.

Based on this tremendous progress, Delta plans to file a plan of reorganization with the bankruptcy court in the coming weeks, and expects to emerge as a strong, competitive, stand-alone airline during the first part of next year. Such a result will be good for competition, good for the flying public in Georgia and throughout the U.S., and good for Delta employees, for their customers, and for their creditors.

In contrast, Mr. Speaker, US Airways' proposal would be bad for competition because of the monopoly it would create, bad for the flying public in Georgia and throughout the U.S. because of its potential rate increases, and terrible for Delta's employees, customers, and creditors because of the jobs that would be lost.

In short, US Airways' proposal would jeopardize all that Delta, with strong support from its employees, creditors, and local communities and others, has worked towards for more than a year now. We sincerely hope that it will be soundly rejected.

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