Us Airways May Take Off For Investors

[USA320Pilot]

US Airways may take off for investors

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The Charlotte Business Journal posted yesterday, US Airways Group Inc., which not long ago looked like a goner, now looks more like a keeper.

Given US Airways' troubled financial past and the notorious history of airline stocks, that may sound wacky.

Three investor groups -- affiliates of Goldman Sachs & Co., Farallon Capital Management and Oaktree Capital Management -- bought a combined $35 million worth of US Airways' new stock in August through a private placement.

"Ten years from now, I think Alabama's investment in US Airways will be viewed as one of the best investments ever," says Harlan Platt, a finance professor at Northeastern University in Boston. He suspects the three investment firms are also on to something, given their reputation for shrewd investing.

RSA's investment stunned the pension industry because direct investing in companies is perceived as so risky -- particularly for airlines. Others caution against betting on US Airways.

Chip comments: Investing in any airline stock is risky because of current industry external pressures, however, yesterday the US Airways security saw public investing in addition to the private placements. Moreover, there is additional reason to believe Platt's comment above that "he suspects the three investment firms are also on to something, given their reputation for shrewd investing," is true. Expect more positive news about US Airways from a strategic perspective after the Pittsburgh hub negotiations are complete.

Respectfully,

Chip

 

[Severed-N-Happy]

I could not believe the sonofagun price per share almost hit 9 bux on Friday..almost sold my puny li'l vesting.

 

[Dilligas]

1--- <snip>... Given US Airways' troubled financial past and the notorious history of airline stocks, that may sound wacky.
<snip>

2--- <snip> Others caution against betting on US Airways.

3---Chip comments: Expect more positive news about US Airways from a strategic perspective after the Pittsburgh hub negotiations are complete.

1--- Wacky is too generous. Delusional comes to mind.

2--- Remember Warren Buffet's comments on how to end up with a million dollars invested in an airline... "First, start with two million dollars..." (paraphrased slightly perhaps but you get the intent :blink: )

3--- What was/is any positive news regarding US Airways? Perhaps I missed it.

"Dilligas comments":

Chip, thanks for posting several posts with zero mention of the "Elk Grove Village based" business partner. Oops I did it. So sorry. I'm serious though, thank you.

Anyone buying cosmetic company stock? With the amount of lipstick being applied to this oinker, I would think Revlon is through the roof. Rename Crystal City to Spin City. This stock is a turd. Suckers are being set up to buy before the bottom falls out again. Just my opinion, of course

"We are currently on our approach to Chapter 7 airport, passengers on the right hand side of the aircraft will be able to see the tractor trailers backed up to the cathedral, loading employee equity and lost earnings. On the left hand side you can see the billboard for Dewem, Cheatem, and Howe, our bankruptcy attorneys with the huge smiles". Hell, at 600 bucks an hour billing rate, I'd be happy too. Check the filings.

Chip, How do you feel about your aircraft being "maintained" by the lowest possible bidder who will be under a time deadline with financial penalty to rush the work? Will they have the stones to ground an aircraft? Will they have the backing to do the job right or will financial concerns govern their maintenance decisions?

I do not support outsourcing all flying to a non union, lowest possible bidder third party contractor... I want the trained and experienced men and women in our family up front. I want my pilot happy and not worrying about job stress but focusing on the task at hand. That's why I support ALPA and labor in general.

I also want the aircraft I'm aboard maintained with the hightest degree of "checks and balances". There are no shortcuts in proper maintenance. I don't want my brain surgery done by the lowest bidder, nor do I want people working on our equipment that have no stake in our safety, and face a financial penalty in taking too long to "fix" a plane.

How do you feel about the outsourcing of heavy maintenance, Chip?

Do you support the business practices and "ethics" of US management?

I'd love to see some straight answers to those two questions. Thank you.

Respectfully,

Dilligas

 

[ClueByFour]

*sigh*

Chip, how much of your own money would you be willing to dump into US stock. Not the stuff you have received as a part of the restructuring, but how much will you actually buy?

Nobody whose stake is better served by keeping U afloat (as opposed to liquidation) has put any significant amount of money into US. $35 million among three firms is chump change. For a large or medium investment house, it's like playing a loose slot--why not try? The only significant amount of money invested in US Airways came from RSA--who stood to lose a pile on paper backing existing US airframe leases.

BTW--the ACAA does not really care about any of Dave and Dave's FUD. In fact, it furthers the resolve of the PA delegation NOT to pour money into a money-losing venture (which is basically what caving to the US demands at PIT really amounts to).

In the unlikely event that UA abandons ORD, you can rest assured that airlines in better fiscal shape (DL and CAL) will handily outbid US for those gates and assets.

I wonder what will happen to U's balance sheet once they cannot abuse the hub monopoly at PIT anymore. Hmmm.....

 

[AOG-N-IT]

*sigh*

Chip, how much of your own money would you be willing to dump into US stock. Not the stuff you have received as a part of the restructuring, but how much will you actually buy?

Nobody whose stake is better served by keeping U afloat (as opposed to liquidation) has put any significant amount of money into US. $35 million among three firms is chump change. For a large or medium investment house, it's like playing a loose slot--why not try? The only significant amount of money invested in US Airways came from RSA--who stood to lose a pile on paper backing existing US airframe leases.

BTW--the ACAA does not really care about any of Dave and Dave's FUD. In fact, it furthers the resolve of the PA delegation NOT to pour money into a money-losing venture (which is basically what caving to the US demands at PIT really amounts to).

In the unlikely event that UA abandons ORD, you can rest assured that airlines in better fiscal shape (DL and CAL) will handily outbid US for those gates and assets.

I wonder what will happen to U's balance sheet once they cannot abuse the hub monopoly at PIT anymore. Hmmm.....

CluebyFour,

Man O man was that dead balls accurate.!!!

When the PIT thing ends as you speculated....don't worry , They will then shift blame to PHL and CLT....heck , maybe DCA will get a dose too ?

It's obvious...people are playing with money that they considerd all but gone to begin with. ...even the RSA was going to be saddled with a bunch of turds that come from a bankrupt European maker.

I see your observations....as a Clue X Six on this one !!!!

 

[PITbull]

Clue comments:

"BTW--the ACAA does not really care about any of Dave and Dave's FUD. In fact, it furthers the resolve of the PA delegation NOT to pour money into a money-losing venture (which is basically what caving to the US demands at PIT really amounts to).

In the unlikely event that UA abandons ORD, you can rest assured that airlines in better fiscal shape (DL and CAL) will handily outbid US for those gates and assets.

I wonder what will happen to U's balance sheet once they cannot abuse the hub monopoly at PIT anymore. Hmmm....."


You are correct there Clue, that is what's brewing with the PA delegation. This just may "back fire" on U's negotiations. Who wants to invest in a company who can't see any kind of positive forseeable future?

Well, I think its all part of U strategy to muscle negotiations, but it may have a backfiring effect on U.

 

[pitguy]

A co worker's neighbor deals with Gov. Rendells office. He says that the AFA Local 40 President is very well liked by Rendell and that they are 'very close'. Whatever the heck that is supposed to mean. Any how he uses Teddy Xidas for allot of input on this local PIT airport issue and other airline issues. I am told he takes her calls immediately. Hopefully this will help us all out here.

 

[USA320Pilot]

ALPA's jobs have been and continue to be farmed out to RJ's and alliances. Do I like it? Nope.

In regard to owning US Airways' security, no I do not. I have a diversified portfolio with a shifting towards hard assets as I move towards retirement.

Respectfully,

Chip

 

[ClueByFour]

In regard to owning US Airways' security, no I do not. I have a diversified portfolio with a shifting towards hard assets as I move towards retirement.

Siegel can FUD until the cows come home. The state of PA and the ACAA are not in the business of speculative or high-risk investments at this point, and no amount of FUD is going to change that.

Exactly.

The folks who have put money into U in relatively small numbers got huge stakes, and, with the exception of Goldman Sachs, are very speculative investors. These guys are in the business of making risky investments in the hopes of huge returns. I will not be suprised if Goldman Sachs underwrites the NASDAQ IPO--and there you have their motive.

RSA, GECAS, and the like all stood to lose money anyway if U did not exit bankruptcy. It's minimizing loss.

It strikes me that the total dollar value invested (as opposed to loaned) to U at this point is south of $500 million--you can own an airline for less than the cost of three new widebodies. If I had that scratch and was bored at the blackjack table, I might throw a few bucks in, but if I'm an investor in charge of other folks money I'm not going to throw any significant amount of money into U, or any other cartel airline.

 

[PITbull]

Clue,

You are a wise man!

 

[deltawatch]

Could Goldman Sachs & Co., Farallon Capital Management and Oaktree Capital Management be anticipating airline globalization..... big mergers and buy outs down the road????


BA would look at American again after any KLM deal......

http://biz.yahoo.com/rc/031005/airlines_ba_1.html