UAL777flyer:
Since the merger termination the two carrier's have completed most of the planned post merger heavy restructuring. The airlines have:
1. Aligned their fleets to be identical by type, except for nine A-330s, which can easily be returned to the owners per the bankruptcy code. Each company operates B-737s, A-320 family, B-757, and B-767 aircraft. No other major airlines have virtually identical fleet types.
2. Adjusted their route networks and downsized their operations reducing over lap and antitrust issues.
3. Signed a code share agreement, which was ratified by both ALPA MEC's.
4. Reached an agreement where US have received a formal invitation to join the Star Alliance.
5. Both have filed for the ATSB loan guarantee, where specific language states the funds can be used for M&A activity. The OMB rules state, "If loan funds are to be used to purchase an existing firm (or the substantial assets of an existing firm), the business plan of the combined entity shall contain a discussion of the way in which any required regulatory or judicial approvals will be obtained, including antitrust approval for any proposed acquisition." (By the way, I understand the combined airline loan guarantee funds can be used for M&A activity).
6. The airlines have asked that their code share and loan guarantee applications be keep confidential by the DOT, DOJ, and ATSB. Why? Per DOT Docket OST-02-12986, the ACAA request co-sponsored by DL & AA formally asked the regulators to suspend the proceedings and to open the docket for a public review; however, the DOT declined the request. With over 100 code share agreements in the U.S. and the DOT never opposing one, why did the DOT not grant the ACAA and DL-AA request? If there is nothing going on, why not let the review be made public knowledge per established protocol?
7. Greg Taylor, former US senior vice president of planning, who held the same position with UA in the 90s, recently left US and went back to UA in the same capacity. If the two airlines were going to see some type of corporate combination, who would be better than Taylor, with his in-depth knowledge of both airlines, to advise the parties on how to proceed?
8. UA's restructuring plan seems to copy the program implemented by Siegel. Is there collusion and has US advised UA on the ATSB process, or are the similarities coincidental?
9. On Wednesday, August 27, US changed its ticketing policies, domestic consolidators, corporate discount programs, paper ticket charge, and pricing changes. Less than 24 hours later, UA announced similar plans. Could UA have known about the changes, to be the first airline to match the US program, or was it coincidental the partners implemented their changes within 24 hours of one another?
Again, I understand the parties have held discussions on a deeper relationship, but with each airline having multiple problems, it's unclear whether or not any further integration could occur. However, dependent on individual restructurings, if the carriers try to integrate, I'm not sure UA would be the survivor. It could be US under Siegel's leadership. In bankruptcy, all bets are off, not to mention there is ATSB language to force consolidation, or the Board could decide to withohold funds to any opposition.
Will the Board elect this option? I do not know, but they have the power to force a merger or withold loan guarantees until their demands are met.
By the way, if the UA pilot group did not believe a corporate combination was possible, why would ALPA have included pre-nuptial seniority language in the ERP?
Chip