Airline Industry Focuses On Us Airways

[jB-Rocks]

See Story

 

[700UW]

Even with major cost cutting that has come largely through job cuts and labor concessions, the Arlington, Va.-based company continues to struggle and has acknowledged it does not expect to turn a substantial profit until at least 2008.

 

[usair_begins_with_u]

Hmmm sounds like a great investment opportunity..

No one except for current creditors would ever give U air a pot to piss in... every one knows the rules about sunk costs... or do they??

 

[us0004us]

"While US Airways and America West have
confirmed that they are in talks,
no specifics of the potential deal
have been released.
Such a marriage could potentially create a
stronger,
bigger
airline
that has presence nationwide,
with US Airways' East Coast routes linked
with America West's network in the West.
But the combined company could also scale back
capacity on some routes where the
airlines' businesses overlap."

 

[USA320Pilot]

It is my understanding that a few weeks ago US Airways and United were in discussions regarding a corporate transaction. At their last meeting United executives flew to Washington and met with US Airways officials at the Arlington-based carrier’s corporate headquarters. Reports indicate US Airways “spurnedâ€￾ United’s offer for another attempt at a corporate transaction and instead US Airways' chairman of the board David Bronner and CEO Bruce Lakefield have turned their attention to America West.

In regard to RSA, a key to understanding their reluctance up to this point to provide any public assurance of financing for US Airways’ exit from bankruptcy is that RSA was legally prohibited from further investment in US Airways, but that now seems to have changed. The "prudent man" rules governing their administration of the RSA pension fund would not allow this on penalty of a surcharge.

Meanwhile, people with knowledge of the situation indicated that RSA has shopped a number of prestigious law firms in recent days for a written opinion that such additional investment would not contravene these fiduciary restrictions provided that US Airways’ situation is materially different, another words, that their risk profile of the investment is reduced. There have been indications
that RSA has such an opinion in hand, contingent on the America West deal being successfully negotiated.

Also noteworthy, today Mesa’s board authorized a stock repurchase, which could be used to fund a transaction with stock, such as an equity investment or purchase of a regional airline.

Regards,

USA320Pilot

 

[UnitedChicago]

At their last meeting United executives flew to Washington and met with US Airways officials at the Arlington-based carrier’s corporate headquarters. Reports indicate US Airways “spurnedâ€￾ United’s offer for another attempt at a corporate transaction and instead US Airways' chairman of the board David Bronner and CEO Bruce Lakefield have turned their attention to America West.

[post="264800"][/post]​

How ever you need to spin that your obsessive, constant predictions of a corporate transaction with UA isn't going to happen. Keep justifying for your own good.

I - like you - are not privy to any conversation within the halls at UA WHQ. However - my bet is that resolving the pension issue, labor contract with the IAM and AMFA, and final a/c lease deals would have to be done and done before any serious merger talk could occur. And if you haven't noticed - it seems that Tilton wants to hitch his wagon to a foreign carrier - not US.

But then again you seem to love to distort logic so I'm sure you'll have some interesting response about some unique, rather oblique corporate transaction, rather infraction.

By the way - it's very impressive that several US management teams seek you out to share confidential corporate transaction obsessions. Are you on speed dial in the CEO office? You know - they should just make you a member of the board. In fact, they should make you secretary since you type so well.

I actually just made myself giggle.

 

[BoeingBoy]

Also noteworthy, today Mesa’ board authorized a stock repurchase, which could be used to fund a transaction with stock, such as an equity investment or purchase of a regional airline.

Regards,

USA320Pilot

[post="264800"][/post]​

I wouldn't read too much into this. Mesa's board first authorized a stock repurchase program in 1999 and have expanded it several times since (2001, 2002, & 2004 IIRC). So far all stock repurchased under the program (6.6 million shares IIRC) have been retired.

Besides, Mesa has plenty of authorized stock that hasn't been issued (2 million shares of preferred and about 45 million shares of common) if they want to do a stock swap deal, although about 30 million additional shares of common would be issued if all convertible note holders elected to convert their holdings to common stock.

Jim

 

[USA320Pilot]

UnitedChicago:

Thanks for your participation on the US Airways board. US Airways' management did not provide me with the information for my previous post in this topic.

In regard to United, I agree that Glenn Tilton would like foreign investment in United because it may not be available from other sources, now that RSA is apparently looking elsewhere. The problem with a foreign business entity investing in United or any other U.S. carrier is current federal law.

By the way, this thread has nothing to do with United except that recently US Airways reportedly "spurned" the Chicago-based carrier's desire for another corporate transaction.

Regards,

USA320PILOT


edited by mod

 

[Hope777]

Back to using your NAME CAPTAIN ?????

Guess I can quote you again using your name?

 

[delldude]

industry focuses on UAIR..... 😛 😀 🙂

 

[funguy2]

In regard to RSA, a key to understanding their reluctance up to this point to provide any public assurance of financing for US Airways’ exit from bankruptcy is that RSA was legally prohibited from further investment in US Airways, but that now seems to have changed. The "prudent man" rules governing their administration of the RSA pension fund would not allow this on penalty of a surcharge.

What law?

Also noteworthy, today Mesa’ board authorized a stock repurchase, which could be used to fund a transaction with stock, such as an equity investment or purchase of a regional airline.

Umm... Mesa Airlines repurchasing their own stock, in order to retire the stock and boost the value of the stock, might actually be an indication that Mesa is not involved in the deal. Afterall, what this US-HP transaction is sorely missing is CASH. If Mesa is using its cash to repurchase its stock, it is not saving it to help finance a US-HP merger.

I agree with Boeing Boy, however, too early to tell YV's involvement. Somebody should listen to their conference call.

 

[whlinder]

By the way, this thread has nothing to do with United except that recently US Airways reportedly "spurned" the Chicago-based carrier's desire for another corporate transaction.

[post="264810"][/post]​

You were the poster who introduced UA to this thread. I don't why it is ok for you to add them to the thread but not for others to mention them.

IMHO UA should not be trying to get involved with US for a 'corporate transaction' at this point. They should be trying to strengthen ties with US through the codeshare and Star, but not through a corporate transaction.

 

[BoeingBoy]

I wouldn't read too much into this. Mesa's board first authorized a stock repurchase program in 1999 and have expanded it several times since (2001, 2002, & 2004 IIRC). So far all stock repurchased under the program (6.6 million shares IIRC) have been retired.

Besides, Mesa has plenty of authorized stock that hasn't been issued (2 million shares of preferred and about 45 million shares of common) if they want to do a stock swap deal, although about 30 million additional shares of common would be issued if all convertible note holders elected to convert their holdings to common stock.

Jim

[post="264809"][/post]​

That's what I get for going by their annual report (fiscal year ends Sept 30) - out of date info....

From their latest quarterly report:

Separately, the company announced its board authorized the repurchase of up to 1 million outstanding common shares. Mesa has bought 7.7 million shares under a previous repurchase programs.

"As a result of the current difficult operating environment it is our belief that our stock price does not reflect the underlying long-term value of the company," said Chairman and CEO Jonathan Ornstein in a statement. "The company will monitor its stock price and purchase shares if and when market conditions create what we believe to be a buying opportunity."

Jim

 

[USA320Pilot]

Speaking of United and their view of M&A activity including US Airways, today Reuters reported Tilton reiterated his opinion that the major air carriers are poised for a round of consolidation. He said recent news that America West Holdings Corp. and bankrupt US Airways Group Inc. are in merger talks reinforces that view.

"I think their decision to pursue that work is illustrative of the points that I've been making — that at a point, a company is really able to only do so much in restructuring on its own," Tilton said. "And then you need a larger platform on which to subsequently do the work of restructuring."

He declined to elaborate on United's possible role in further industry consolidation.

"I want to make certain that United has the opportunity to constructively participate in that eventuality were it to take place," Tilton said.

See Story

USA320Pilot comments: It might be prudent to have a partner "to constructively participate in that eventuality were it to take place." Could that change? Absolutely. Will it? I do not know.

Regards,

USA320Pilot

 

[Bear96]

I thought this thread had "nothing to do with UA"...